Cameron Huddleston wrote her new book “Mom and Dad, We Need to Talk. How to Have Essential Conversations With Your Parents About Their Finances” when she found herself confronted with huge issues after not talking to her mom about her money- which she shares on the podcast. The book hits on a huge issue impacting all generations and all income levels. 

Cameron's money story:

Cameron Huddleston:
Yes. I had moved from Washington DC where I was working for Kiplingers Personal Finance magazine. I had moved to my home state of Kentucky, actually across the street from my mom. I said to her, "Mom, I think you need to look into long-term care insurance." She and my father had divorced years before that, and she was living on her own. I knew that if she had any long-term care needs, it would be helpful to have long-term care insurance to help cover those costs. She took my advice-

Bobbi Rebell:
Wait, for people that don't know long-term care insurance is specifically to cover things like a nursing home that you would live in. That kind of thing.

“A big benefit of having a third party involved with these conversations is because your parents might be reluctant to talk to you but they are going to listen to the advice of someone else.”

Cameron Huddleston:
Yes, assisted living, memory care, and in case you don't know this, Medicare does not cover those costs.

Bobbi Rebell:
What's a typical cost of that if somebody or their parents end up having to pay that out of pocket?

Cameron Huddleston:
The average cost of assisted living is about $4,500 a month. That's average. A nursing home is 80-$90,000 a year.

Bobbi Rebell:
Okay, so you moved back home to across the street from your mom, and you're learning about her situation?

Cameron Huddleston:
Yes. I asked her to check in a long-term care insurance. She took my advice. She met with an insurance agent. Unfortunately, she did not qualify for coverage, because she had another preexisting condition that made her too high risk. At that point I should have said, "Okay mom, you can't get long-term care insurance coverage. Let's look at your financial assets, figure out where you stand, and figure out how we would pay for this care if you needed it."

I can look back and say, that's what I should've said, but I didn't. I didn't even think about it at all. Say being what it is, a few years later, she started having trouble with her memory. At that point, I knew I needed to act quickly and talk to her, but because I was already facing a crisis, if I wanted to start talking to her about money, I would have to explain to her why, "Mom, we need to talk about your finances, because I can see you're having trouble with your memory."

I didn't want to have to be the one to tell her that. I didn't care about talking to her about money. That didn't feel like a taboo topic to me. I didn't want to tell her that I thought she was losing her memory. Eventually, with the help of a doctor actually, I got her doctor to suggest that she get tested for dementia, and he did.

During that process I said, "Mom, I think we need to go meet with your attorney and get all your legal documents updated. Because the thing is you have to be competent, mentally competent to sign a will or a living trust, a power of attorney document, and an advanced healthcare directive. If you are no longer competent, you cannot sign those documents."

Then if you get into a situation like my mother did where she is no longer able to make financial and healthcare decisions on her own, if she had not named me power of attorney and healthcare power of attorney, I would have had to go to court, basically put her on trial to prove that she was no longer competent, spent thousands of dollars to get conservatorship for her. I act too quickly. I knew I had to do this. She was still competent enough. I dodged a bullet, but then I had to figure out her finances while she was already forgetting things, and it was so difficult.

Bobbi Rebell:
Right. So how did that work? What did you find?

Cameron Huddleston:
I had to approach it very carefully. I didn't want to look like I was going in and taking over, especially in the early stages of her dementia. I didn't want her to feel like she was losing all of her independence. So I just did things little by little.

One of the benefits of meeting with the attorney was that she suggested that we go to the bank, and put me on her account as her representative payee. That's certainly a big benefit of having a third-party involved with these conversations is because your parents might be reluctant to talk to you, but they're going to listen to the advice of someone else. So the attorney said go to the bank. We took her advice, and then that sort of opened the door to having some more conversations about what role I was going to have to play going forward.

She had all this cash just sitting in her bank account. Fortunately, she had not opened an online account. She was so old fashioned, she never used debit card. She used checks. So I was able to go online and set-up online banking for her and monitor her bank account, because one of the issues that she was having was writing checks to every organization that would send her something in the mail, like organization she had no ties to.

So, I had to make sure she wasn't just spending all her money writing these charitable contribution checks.

Bobbi Rebell:
Which is something that happens to a lot of seniors.

Cameron Huddleston:
Oh yeah, it's a big problem. Then you've got to worry about scammers and stuff. I decided to take that money and put it into an annuity. Not that you or I would necessarily recommend that everyone get an annuity, but I knew that it would be a safe place to put her money. It would earn some interest, hands off for several years, and then use it down the road when I needed it to pay for her care.

Cameron’s money lesson:

Cameron Huddleston:
The lesson is please don't wait to have these conversations with your parents. A lot of people I talk to and hear from say, "Well, I don't need to have this conversation yet. We're not there yet. Mom and dad are still healthy." That is exactly the time you need to have it. You need to have the conversations when your parents are healthy. There's not a financial crisis, there's not a health crisis, because then everyone is entirely competent. Your parents know what assets they have, what they don't have, what legal documents they have.

“You need to have the conversations when your parents are healthy. There is not a financial crisis. There is not a health crisis. Because then everyone is entirely competent.”

You have time to get those legal documents if they don't have them. Emotions are not running high. There's so many more options available to you. If a crisis does arise, you can make a plan for how they are going to age comfortably. You can't do that if there's already a crisis.

Cameron's everyday money tip:

Cameron Huddleston:
I think I have a pretty good tip. It's something that I have done myself. I set-up alerts with my credit card account. It's so easy. You just log onto your account online. There's usually most credit card companies will have a place where you can click on alerts and notifications. I set it up to get alerts every time my credit card is used. The benefit of this is that it alerts you to fraud, which has happened to me.

“If your parents are counting on your to be their caregiver.. wouldn’t you rather know this now .. because you might have to prepare your own finances”

It was really an unfortunate situation. I was at a visitation for a family member who had died, and my phone, it was like a little ding from the message. I looked at it and it said my credit card had been used. Then I got another ding that it was used again and I was like, "Wait a second, I did not make these charges." I got on the phone, called my credit card company and I said, "I think my credit card number has been stolen. I want you to flag these transactions as fraud and I want to cancel my card." Thank goodness for the alerts. I mean, I knew right away that there was something fishy.

In My Take you will learn:

Financial Grownup tip number one:

Make sure proactive decisions are being made about insurance, not just for yourself and your immediate family, but also for anyone who is what I would call stakeholders in your family financial ecosystem. So everyone whose finances could impact yours, only you can decide if you need and at what amount you may need. For example, life insurance, long-term care insurance, healthcare insurance and so on.

Make sure those decisions are being made for everyone that is tied to you financially, because the decisions made or not made can and in many cases, will impact your life. So make sure that the people you care about have the information and that they're making decisions. Because obviously as we always say, not making a decision is actually making a decision. It's just not one that you are aware of all the time.

Financial Grownup tip number two:

If you don't feel comfortable having these conversations now, this is what you need to do. Go through in your mind and play out how things could go if you don't get this done, if you don't have the conversations, what happens? It may give you some motivation.

Bobbi Rebell:
Read Cameron's book for example of the reality of how this goes. For her, it was not perfect but she dodged a bullet as she says, but she gives some examples that will certainly motivate you because things can go very bad, very fast, very unexpectedly and with a very high price tag. Even what seems like the most basic things can be huge stresses at the worst time. As an example, a relative of mine recently passed, and when we visited her husband a few days later, rather than focusing on his own emotional healing, he was actually stressed out just trying to figure out her passwords. I mean, that's terrible.

Episode Links:

Blinkist - The app I’m loving right now. Please use our link to support the show and get a free trial.

Cameron’s website - www.CameronHuddleston.com

Cameron’s Book - Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances

Follow Cameron!

• Facebook - @CameronHuddlestonMoneyExpert

• Twitter - @CHLebedinsky

• LinkedIn

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Chad Parks, founder of Ubiquity Retirement and Savings, and the producer of the Broken Eggs documentary shares a money story of a chance encounter with a waiter who seemed indifferent to his own eventual retirement crisis, and the “aha" moment that followed. 

Chad’s Money Story:

Chad Parks:
So, when we were on the road trip making the documentary, one of our stops was in New Orleans. The way we got the stories was we literally would just stop and talk to anybody, and sometimes it'd be on-camera, sometimes it'd be off-camera. We were at dinner one night with the film crew and he's asking, "What are y'all doing here?" And we told him we're making a documentary about retirement. That got him talking about his own life, and that he's been a career waiter, and that he has not been able to save substantially, and that he thought that he just... Retirement was a foreign object to him and he just thinks that he's never going to be able to retire.

Bobbi Rebell:
About how old was he, would you say?

Chad Parks:
In his late 40s.

Bobbi Rebell:
Late 40s, so this is a time when it's starting to get real. You're no longer a kid who can kind of say, "Well, I maybe am paying down student debt or I just had a baby. At 40-something, you are definitely an adult.

Chad Parks:
Yeah. I think what was really also stood out a lot was that he didn't really seem too concerned about not having savings or a plan. And his attitude was that he just figured that the government or social services would be there to help him and that he'd figure it out. That was a little bit disheartening to hear because if so many people do believe that, then we're really going to be in for some serious problems in the future if everybody has got that attitude.

Bobbi Rebell:
And also, he was a waiter and that is the job that is typically not one that has maybe all of the programs and the retirement plans that some other jobs have. So that could also be a factor as we move towards more of a gig economy, right?

Chad Parks:
Oh, for sure. The statistics are frightening. More than half of the U.S. working population don't have the ability to save at work. The point of the business is, they're small. They don't think they can afford a small business retirement plan and they don't do it. And so, half of us in this population don't have a vehicle to save easily and efficiently for their future.

Bobbi Rebell:
As you had this conversation with the waiter, what were your colleagues and friends at the table, what was their reaction? And was there conversation afterwards about it?

Chad Parks:
Well, it definitely proved the point of why we're on the road, right? To kind of understand what the reality of people's understanding of retirement is, what their attitudes are. And I think what we all walked away from, not only with this talking to this gentleman but for most of the people we talked to, was that there's a big awareness that there's a problem, but not many people are doing much about it nor do they know what to do about it. So we likened it to this whole thing of like, we all know we need to go to the gym and work out, but not many of us do.

Bobbi Rebell:
What else did the waiter say to you?

Chad Parks:
That dependency on social services, it didn't sound like he had much of a plan. And he literally was living paycheck to paycheck. He just kind of shrugged his shoulders and it was like, "I don't know what to do about it."

Bobbi Rebell:
Did he ask you?

Chad Parks:
Well, I mean, I could preach all day about it, but...

Bobbi Rebell:
I mean, I'm saying, did he ask you though?

Chad Parks:
No, he did not.

Bobbi Rebell:
I say that because part of the problem is that many of us don't ask. So of course, we should get more information, but he, like many people maybe in your film, didn't ask.

Chad Parks:
This is a very good observation. Yeah, that's true. I had to stop and think about that and no, he did not ask and had he asked, I might've been able to share some good information with him.

Chad’s Money Lesson:

Chad Parks:
So, this concept of retirement is relatively new in our country. Pretty much if you think about after World War II, when the GIs were coming home and the modern corporation went back to building cars and doing what they did, there was this promise of the three-legged stool of retirement which is, you would get a pension plan from your employer, social security was going to be there for you in your older age. And then in the '70s and '80s, we introduced the additional savings vehicle of a 401k. That sounds great, right? You got a guaranteed income, you've got a safety net with social security, and you can augment your retirement savings with a 401k or IRA. Unfortunately, we know today, especially in 2019, that most businesses don't offer pensions anymore. Good example was General Electric having just frozen the pension for their 20,000 employees.

Chad Parks:
Social security was never meant to be the primary source of income in your retirement, but unfortunately for a lot of people, that is becoming the primary source. And social security itself may actually end up having some reduction in benefits in 2034, 15 years from now, by about 25% if they don't make any changes to it today. Then that puts the onus back on personal savings, and just as I shared before, half of our country doesn't have the ability to even save at work, and that's where we are.

Bobbi Rebell:
That's where we are. And what scares me here is not only, as I mentioned, that people aren't asking and being their own advocates, but our expectations of people realistic in terms of what people earn, what people can realistically save in our world, and our lifestyle expectations. If we're being honest, we have an expectation that everybody has a cellphone and everybody lives a certain lifestyle and it's partially the media, but we also have to own it ourselves. We choose to purchase things or live lifestyles that maybe are not sustainable.

Chad Parks:
No, you're so right. And that, I call it, nicknamed this the microwave society, right? Everybody wants everything instantly and want instant gratification. We are marketed to and sold to, we are rewarded with spending. Unfortunately, our attitudes are not the same about long-term savings. It's not really exciting nor fun to see your paycheck go down and to see money accumulate over a long period of time, in this idea that you're visualizing yourself in the future. And this whole concept of asking the average individual to become a savings expert and investment expert, a budgeting expert, to be able to say, this is your magic number, this is when you retire, this is how much money you're going to have, that's really putting a lot on people.

Chad Parks:
I was formerly a certified financial planner. I went to grad school for finance and it was, I said, it's a shame I had to go to grad school to learn the basics of personal finance. And so it's really, as much as we try to get people to say, listen, this is your responsibility. Don't forget that the way the world has been set up today is that it's not up to the government, it's not up to your employer. Unfortunately, it is up to you to take your future in your own hands. But at the same time, we haven't equipped you with the tools to do so. So, that's where we kind of have this big chasm as a society that we really need to figure out.

Chad’s Money Tip:

Chad Parks:
Yeah. So, as I was saying there, it's hard for people to visualize themselves in the future. None of us want to acknowledge that we're going to get old. It happens to other people. And so, one of the ways that I've found to really help people to drive that point home is to volunteer at a retirement home. These are the people who have lived their careers. These are people who've had the life lessons and the experiences that they're happy to share with you. And when you sit down and you just listen to people tell their stories, you can absolutely relate to them. You can learn, you will be emotionally moved. And hopefully, after some time doing that, you'll go home and you'll start to rethink your priorities and say, "All right, this person seemed to be okay and have it pretty good." Or "this person over here, wow. I really don't want to end up like them. So, what can I do differently today?" And then it's also just being kind and sharing some of your time with people who are in the last stages of their lives and could use a little camaraderie.

Bobbi’s Financial grownup tips:

Financial grownup tip number one:

I am generally against the whole trophy for everything, but when it comes to retirement, making an effort can solve a lot of problems. Just trying. The truth is, you guys are a self-selecting audience. You are interested in money stuff. The waiter probably not listening to this or any podcast related to money that's going to actually help him do something other than quote, figure it out when the time comes. The waiter isn't even asking our guest, Mr. Parks, for solutions. He's not even looking, he's not trying. But you guys are. So pat yourself on the back and definitely an A-plus for effort, because you guys are at least interested and I bet you are in better shape than you realize.

Financial grownup tip number two:

One thing we can all learn from our waiter is that, our waiter friend in the story I should say, is that to some degree, we will all figure it out along the way. Redefine what retirement will mean for you and set your goals, but also live your present life. For example, you could see ads for older couples blissfully traveling the world, on luxury cruises or whatever, but honestly, that may not be for you. You might not suddenly wake up at a certain age and suddenly have this burning desire to go on a riverboat cruise. Maybe you will but maybe not. Your retirement bliss could be totally different and at a different price point, higher or lower.

Episode Links:

• Blinkist - The app I’m loving right now. Please use our link to support the show and get a free trial.

• Chad’s website - www.myubiquity.com

Follow Chad!

• Instagram - @myubiquity

• Facebook - @ubiquitysavings

• Twitter - @ubiquitysavings

• LinkedIn

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Cameron Huddleston wrote her new book “Mom and Dad, We Need to Talk. How to Have Essential Conversations With Your Parents About Their Finances” when she found herself confronted with huge issues after not talking to her mom about her money- which she shares on the podcast. The book hits on a huge issue impacting all generations and all income levels. 

Cameron's money story:

Cameron Huddleston:
Yes. I had moved from Washington DC where I was working for Kiplingers Personal Finance magazine. I had moved to my home state of Kentucky, actually across the street from my mom. I said to her, "Mom, I think you need to look into long-term care insurance." She and my father had divorced years before that, and she was living on her own. I knew that if she had any long-term care needs, it would be helpful to have long-term care insurance to help cover those costs. She took my advice-

Bobbi Rebell:
Wait, for people that don't know long-term care insurance is specifically to cover things like a nursing home that you would live in. That kind of thing.

“A big benefit of having a third party involved with these conversations is because your parents might be reluctant to talk to you but they are going to listen to the advice of someone else.”

Cameron Huddleston:
Yes, assisted living, memory care, and in case you don't know this, Medicare does not cover those costs.

Bobbi Rebell:
What's a typical cost of that if somebody or their parents end up having to pay that out of pocket?

Cameron Huddleston:
The average cost of assisted living is about $4,500 a month. That's average. A nursing home is 80-$90,000 a year.

Bobbi Rebell:
Okay, so you moved back home to across the street from your mom, and you're learning about her situation?

Cameron Huddleston:
Yes. I asked her to check in a long-term care insurance. She took my advice. She met with an insurance agent. Unfortunately, she did not qualify for coverage, because she had another preexisting condition that made her too high risk. At that point I should have said, "Okay mom, you can't get long-term care insurance coverage. Let's look at your financial assets, figure out where you stand, and figure out how we would pay for this care if you needed it."

I can look back and say, that's what I should've said, but I didn't. I didn't even think about it at all. Say being what it is, a few years later, she started having trouble with her memory. At that point, I knew I needed to act quickly and talk to her, but because I was already facing a crisis, if I wanted to start talking to her about money, I would have to explain to her why, "Mom, we need to talk about your finances, because I can see you're having trouble with your memory."

I didn't want to have to be the one to tell her that. I didn't care about talking to her about money. That didn't feel like a taboo topic to me. I didn't want to tell her that I thought she was losing her memory. Eventually, with the help of a doctor actually, I got her doctor to suggest that she get tested for dementia, and he did.

During that process I said, "Mom, I think we need to go meet with your attorney and get all your legal documents updated. Because the thing is you have to be competent, mentally competent to sign a will or a living trust, a power of attorney document, and an advanced healthcare directive. If you are no longer competent, you cannot sign those documents."

Then if you get into a situation like my mother did where she is no longer able to make financial and healthcare decisions on her own, if she had not named me power of attorney and healthcare power of attorney, I would have had to go to court, basically put her on trial to prove that she was no longer competent, spent thousands of dollars to get conservatorship for her. I act too quickly. I knew I had to do this. She was still competent enough. I dodged a bullet, but then I had to figure out her finances while she was already forgetting things, and it was so difficult.

Bobbi Rebell:
Right. So how did that work? What did you find?

Cameron Huddleston:
I had to approach it very carefully. I didn't want to look like I was going in and taking over, especially in the early stages of her dementia. I didn't want her to feel like she was losing all of her independence. So I just did things little by little.

One of the benefits of meeting with the attorney was that she suggested that we go to the bank, and put me on her account as her representative payee. That's certainly a big benefit of having a third-party involved with these conversations is because your parents might be reluctant to talk to you, but they're going to listen to the advice of someone else. So the attorney said go to the bank. We took her advice, and then that sort of opened the door to having some more conversations about what role I was going to have to play going forward.

She had all this cash just sitting in her bank account. Fortunately, she had not opened an online account. She was so old fashioned, she never used debit card. She used checks. So I was able to go online and set-up online banking for her and monitor her bank account, because one of the issues that she was having was writing checks to every organization that would send her something in the mail, like organization she had no ties to.

So, I had to make sure she wasn't just spending all her money writing these charitable contribution checks.

Bobbi Rebell:
Which is something that happens to a lot of seniors.

Cameron Huddleston:
Oh yeah, it's a big problem. Then you've got to worry about scammers and stuff. I decided to take that money and put it into an annuity. Not that you or I would necessarily recommend that everyone get an annuity, but I knew that it would be a safe place to put her money. It would earn some interest, hands off for several years, and then use it down the road when I needed it to pay for her care.

Cameron’s money lesson:

Cameron Huddleston:
The lesson is please don't wait to have these conversations with your parents. A lot of people I talk to and hear from say, "Well, I don't need to have this conversation yet. We're not there yet. Mom and dad are still healthy." That is exactly the time you need to have it. You need to have the conversations when your parents are healthy. There's not a financial crisis, there's not a health crisis, because then everyone is entirely competent. Your parents know what assets they have, what they don't have, what legal documents they have.

“You need to have the conversations when your parents are healthy. There is not a financial crisis. There is not a health crisis. Because then everyone is entirely competent.”

You have time to get those legal documents if they don't have them. Emotions are not running high. There's so many more options available to you. If a crisis does arise, you can make a plan for how they are going to age comfortably. You can't do that if there's already a crisis.

Cameron's everyday money tip:

Cameron Huddleston:
I think I have a pretty good tip. It's something that I have done myself. I set-up alerts with my credit card account. It's so easy. You just log onto your account online. There's usually most credit card companies will have a place where you can click on alerts and notifications. I set it up to get alerts every time my credit card is used. The benefit of this is that it alerts you to fraud, which has happened to me.

“If your parents are counting on your to be their caregiver.. wouldn’t you rather know this now .. because you might have to prepare your own finances”

It was really an unfortunate situation. I was at a visitation for a family member who had died, and my phone, it was like a little ding from the message. I looked at it and it said my credit card had been used. Then I got another ding that it was used again and I was like, "Wait a second, I did not make these charges." I got on the phone, called my credit card company and I said, "I think my credit card number has been stolen. I want you to flag these transactions as fraud and I want to cancel my card." Thank goodness for the alerts. I mean, I knew right away that there was something fishy.

In My Take you will learn:

Financial Grownup tip number one:

Make sure proactive decisions are being made about insurance, not just for yourself and your immediate family, but also for anyone who is what I would call stakeholders in your family financial ecosystem. So everyone whose finances could impact yours, only you can decide if you need and at what amount you may need. For example, life insurance, long-term care insurance, healthcare insurance and so on.

Make sure those decisions are being made for everyone that is tied to you financially, because the decisions made or not made can and in many cases, will impact your life. So make sure that the people you care about have the information and that they're making decisions. Because obviously as we always say, not making a decision is actually making a decision. It's just not one that you are aware of all the time.

Financial Grownup tip number two:

If you don't feel comfortable having these conversations now, this is what you need to do. Go through in your mind and play out how things could go if you don't get this done, if you don't have the conversations, what happens? It may give you some motivation.

Bobbi Rebell:
Read Cameron's book for example of the reality of how this goes. For her, it was not perfect but she dodged a bullet as she says, but she gives some examples that will certainly motivate you because things can go very bad, very fast, very unexpectedly and with a very high price tag. Even what seems like the most basic things can be huge stresses at the worst time. As an example, a relative of mine recently passed, and when we visited her husband a few days later, rather than focusing on his own emotional healing, he was actually stressed out just trying to figure out her passwords. I mean, that's terrible.

Episode Links:

Blinkist - The app I’m loving right now. Please use our link to support the show and get a free trial.

Cameron’s website - www.CameronHuddleston.com

Cameron’s Book - Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances

Follow Cameron!

• Facebook - @CameronHuddlestonMoneyExpert

• Twitter - @CHLebedinsky

• LinkedIn

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Taxes are never fun but millions of Americans may pay less for 2018. David Rae CFP® joins Bobbi for a breakdown of what changes matter and specific things Financial Grownups can do to make sure they are on track for when it is time to turn in their returns this spring. 

Here are 5 tips for year end tax planning

• Max out your retirement accounts

• Set up the Right Retirement Plan for your business

• Strategically Bunch your Tax Deductions

• Consider Doner-Advised Funds

• Tax-Loss Harvesting

HSA's, aka Health Savings Accounts are getting a lot of buzz - because they can be awesome. Here is the Financial Grownup Guide to 10 things you need to know to find out if HSA’s are right for you. 

Here are the 10 things you must know about them and why you need to find out asap if they are right for you.

1. What are they. Health savings accounts are tax advantaged savings accounts- that means you put in pre-tax money- that can be used to pay for medical related expenses. 

2. Love paying no taxes- how much can I put in? That changes every year. For 2019 you can put in up to $3500- and families can put in up to $7000. If you are over 50 you can do a catch up of an additional $1000. 

3. What kinds of things can I use it for? Generally the things you would get re-imbursed for by insurance once you use up the deductible- so NOT the bi-weekly premiums you are paying but YES to doctor visit you went to or a medication that wasn’t reimbursed because, you have a high deductible that you haven’t met yet.  

4. Am I eligible? You have to have - another acronym here- an HDHP- that is a High Deductible Health Plan. That is defined by the IRS as a deductible of $1350 for an individual and $2700 for a family. You also have to have some hefty out of picket amounts: $6,750 for individuals and $13,500 for families. You also can’t have another medical plan. You can’t be enrolled in Medicare. And you can’t be a dependent on someone else’s tax return. 

5. How do I actually set it up- this can be done through your employer- right along with the health care plan- which is usually a good idea because some companies will also put money into the account for you- and we all love ‘free’ money. According to Mercer the average company contributes almost $700. That money is not included in your gross income.  it can also be set up at some financial institutions. 

6. What does it cost: Many financial institutions do charge fees but they are often waived if you can maintain a minimum balance. I will leave some links in the show notes of great articles that rank financial institutions by things like fee structure from places like Morningstar and the College Investor- which is run by financial grownup Robert Farrington- you guys should make sure to check out his great episode. Also with financial institutions you can put in after tax money - and then deduct it from your income.

7. What if I don’t use it all?  This is my # favorite fact about HSA’s - you get to keep the money. it’s your money. So it rolls over until forever. Even if you later GO on medicare and can’t contribute, you can use it to pay premiums there. So good. BY the way- FSA- flexible spending- it is use it or lose it at the end of the year - big difference here. 

8. What if I leave my job? No worries- HSA’s are portable.

9. Explain the investing thing. The money is invested and the earnings, assuming they are used for eligible medical expenses, remain tax free. 

10. What’s the catch? The big catch is that if you think you are going to have big medical expenses, or you won’t have the cash to actually save and fund the HSA- you might want to consider a lower deduct-able health plan- it’s safer and you won’t get hit so hard with high medical bills. You can still do the flexible spending account.. 

EPISODE LINKS

Here are some resources to find out more about fees associated with HSA’s

https://www.morningstar.com/blog/2018/11/27/hsa-spending-account.html

https://www.morningstar.com/blog/2018/11/12/top-hsa-providers.html

https://thecollegeinvestor.com/22222/best-hsa/

https://www.nytimes.com/2017/07/07/your-money/health-savings-accounts-morningstar.html

https://www.doughroller.net/insurance/health/the-best-hsa-accounts/

Check out The College Investors’ Robert Farrington’s episode

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Carrie Schwab-Pomerantz may be a Financial Grownup but that doesn’t mean all her friends have been able to grow up. Listen to how she works to get them on track. Plus- the president of the Charles Schwab foundation also shares an everyday money tip about making it easier to give to causes you care about. 

In Carrie's money story you will learn:

-How talking about money with your friend can keep you both on track

-The 3 craziest ways someone has tried to make quick cash

-What Carrie's number one priority is when it comes to saving, and how she follows through with it

-Hear why Carrie believes participating in the market is the key to saving for retirement

In Carrie’s money lesson you will learn:

-The one thing every financial professional does to save money and keep themselves on track. 

-The easiest way to be a good financial friend - and a successful financial grownup

In Carrie's everyday money tip you will learn:

-The ultimate tax smart way give to charity this holiday season 

In My Take you will learn:

-Carrie's friend from her money story was making some crazy financial decisions, here's how you can be the best financial friend possible without damaging your relationship

-Suggesting financial help to your friends could be the best gift you give this holiday season

Bobbi and Carrie also talk about:

-Carrie helped her friend's daughter pick out a broad-based index funds retirement plan, check out if that could also be right savings plan for you

-Mutual funds, index funds, and retirement plans are something to start thinking about as early as in your twenties. 

EPISODE LINKS

For all of your financial planning questions check out Ask Carrie Columns on Schwabmoneywise.com

Follow Carrie!

Twitter: @CarrieSchwab

Facebook: @CarrieSchwabPomerantz

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Transcription

CARRIE SCHWAB:
Her daughter's about to go off to college, she panics, so what does she do? She signs up to drive for Instacart in her red, snazzy car, dropping off groceries at people's homes.

BOBBI REBELL:
You're listening to Financial Grownup, with me, certified Financial Planner, Bobbi Rebell. Author of How to Be a Financial Grownup, and you know what? Being a grownup is really hard, especially when it comes to money, but it's okay. We're going to get there together.

BOBBI REBELL:
I'm going to bring you one money store from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.

BOBBI REBELL:
Hey, friends. Let's talk about being friends. Are you on track with your goals, but see a train wreck coming with someone you care about? What do you? Carrie Schwab-Pomerantz knows all about it, and has solutions.

BOBBI REBELL:
First, a quick welcome to everyone. If you are just joining us, you are new to the show, so glad you are here. We keep the shows short because you're busy, but if you are commuting or have a little more time, we fully encourage the binge listen.

BOBBI REBELL:
Got a question? We are putting together some upcoming episodes to answer them, so DM us at bobbirebell1 on Instagram, bobbirebell on Twitter, or email us, hello@financialgrownup.com. That is hello@financialgrownup.com.

BOBBI REBELL:
All right, let's get to Carrie Schwab-Pomerantz. I feel like she is the friend we all need in our back pocket. Yes, she is the daughter of Charles Schwab, and she grew up watching her dad build the business through ups and downs; but she is also, as you'll hear, a fantastic role model and financial expert in her own right.

BOBBI REBELL:
And, her story is one that we'll all be able to relate to. Here is Carrie Schwab-Pomerantz.

BOBBI REBELL:
Hey, Carrie Schwab-Pomerantz. You're a financial grownup. Welcome to the podcast.

CARRIE SCHWAB:
Thanks, Bobbi, so glad to be here.

BOBBI REBELL:
I am so honored to have you, because you are so accomplished in your own right, even though you get talked about a lot as the daughter of Charles Schwab. We're not going to talk about him.

CARRIE SCHWAB:
No.

BOBBI REBELL:
We're only going to talk about you. You are President of the Charles Schwab Foundation, and this is what really we bonded over, is that we are both certified Financial Planners, so you know your stuff.

BOBBI REBELL:
You got a lot of other letters after your name, but that's the one that is most special to me, so-

CARRIE SCHWAB:
I think so, too. We worked hard, didn't we, Bobbi?

BOBBI REBELL:
We did. That is one hard test, so-

CARRIE SCHWAB:
Yeah, yeah.

BOBBI REBELL:
Big pats on the back to us, and kudos to all the CFPs out there who are doing a lot to support people's financial goals, and to act as fiduciaries, which is a really important thing, as well.

CARRIE SCHWAB:
Yeah, and you know, Bobbi, this is how, again, you bring it up. Here we are, two women, and we need so many more women in our field, and I don't think people realize that this is not a field of match, or stem, or whatever.

CARRIE SCHWAB:
It's about helping people achieve financial security, and I think that we absolutely need more women in the industry to help people achieve that.

BOBBI REBELL:
Absolutely, and it's also important to be helping our friends, but that's not always an easy thing to do, which brings us to the money story that you're going to share.

BOBBI REBELL:
This is one of the most compelling stories that I have heard yet, because it really goes to the heart of what challenges us when it comes to money, and that is the human side.

BOBBI REBELL:
Tell us your money story, Carrie.

CARRIE SCHWAB:
Well, this one's a hard one to share. One of my oldest childhood friends, who I love, she's like a sister to me. She's always struggled with money, always worked, and so forth; so I really respect her financial independence, but she didn't always make good decisions.

CARRIE SCHWAB:
You know? She's not always prioritizing how to spend her earnings. She's a lawyer, by the way, and the one story that just confused me a little bit is ... She has a daughter that went on to college, and she was ... She had been saving for her daughter's college education, but I guess she didn't quite have enough money, and she panicked.

CARRIE SCHWAB:
My girlfriend had been driving a Tesla, much to my chagrin.

BOBBI REBELL:
For those that don't know, what do Teslas go for about? Are they over $100000?

CARRIE SCHWAB:
I think they're about $90000. Yeah, I imagine ... Definitely not in my budget. And so, she's driving these $90000, her daughter's about to go off to college, she panics, so what does she do? She signs up to drive for Instacart in her red, snazzy car, dropping off groceries at people's homes.

CARRIE SCHWAB:
I had to think to myself, “What's with this?” You know? “Tesla and driving for Instacart? Where are our priorities?”

BOBBI REBELL:
What do you do as a friend when you see a friend making what in your mind are irrational money decisions?

CARRIE SCHWAB:
You know, that's a hard conversation to have, I have to tell you. And, she has had this tendency ... I'll tell you another little story about her. She would buy tickets, like the Rolling Stones would come to town, buy expensive tickets in hopes that she could sell them for a profit.

CARRIE SCHWAB:
And, guess what? She can't sell them, so she comes to me and my sister in hopes we'll buy them.

BOBBI REBELL:
Oh, my goodness.

CARRIE SCHWAB:
Yeah, so I just finally ... I had to have some words and some tough love conversations with her, but, you know, the Tesla one, the most recent one ... she kind of knows how I feel. I just have to smile, and grin, and bear it.

CARRIE SCHWAB:
You know, “Why didn't you just get a Prius?” Because she wanted to go across the bridge, I guess you couldn't go through the fast lane, and so forth; but I would not say there's an easy conversation.

CARRIE SCHWAB:
I would say I have little conversations along the way, about the importance of having your priorities straight, and really making number one priority, saving and investing for your retirement.

BOBBI REBELL:
I'm curious, do people come to you, your friends, informally for advice all the time? Kind of like the doctor that goes to parties and everyone says, “Oh, I've got this little bark here, can you tell me what it is?” Do you get that a lot?

CARRIE SCHWAB:
I get it a lot, and to be honest with you, I so appreciate it. A girlfriend of mine, her daughter just got her first job in an investment bank, and I asked right away ... Specially for a young woman, I would say, “Have you started saving in your 401k?” And she said, “No, just because I don't know what to do.”

CARRIE SCHWAB:
She's in New York, and I'm in San Francisco, and I said, “Email me your options at your 401k,” so I took a look at them. I even consulted with one of our Financial Consultants who looks at this stuff every day, and we both agreed that she should be invested in a broad-based index fund that was offered within her plan.

CARRIE SCHWAB:
To me, it's all about participating in the market, specially for young people. When you're talking about retirement, you're talking about up to 40 years, potentially.

BOBBI REBELL:
Yes, we live a long time now.

CARRIE SCHWAB:
We live a long time, and put even more than 40 years, so it's so important to invest in a diversified portfolio of stocks, like a mutual fund, or an index fund. It's about participating in the market, it's not about picking the hot stock, or the hot mutual fund.

BOBBI REBELL:
Totally agree, so what is your advice, your takeaway in terms of being a financial friend? Admit it, you've had mixed success at. What is your advice for our listeners when they do see friends doing things that they know are not in their best financial interest?

CARRIE SCHWAB:
Steer your friends towards professional help; and I would also say there's no shame in getting help. I tell people all the time that even I have a registered Investment Advisor, and even the professionals get help, because it takes the emotion out of it, it makes you accountable. Right?

CARRIE SCHWAB:
Because, you know, you're showing up, you're meeting with your representative, and you learn, and you get better results. Give them somebody you totally trust, and then you can take it out and not sort of saturate yourself from the situation.

BOBBI REBELL:
So, Carrie, for your everyday money tip, it is almost holiday season, time to be thinking ... Hopefully we think about it all year-round, but time to be thinking, maybe a little more focused on giving to charity; and there is a way to do this where you often get more bang for your buck, as does the charity. Tell us more.

CARRIE SCHWAB:
The secret is a donor-advised fund. Most financial institutions have them. Schwab has one, I'm Chair of the Board, and basically you can open one up for as little as $5000. The way to make it tax smart is donate appreciated stock, that way you're not paying taxes, and you have more money going to the charity, and then ...

CARRIE SCHWAB:
Whatever amount it is, let's just say $10000, you get to deduct that from your taxes for that particular year. Then, you can take your time on what charities you want to choose from.

CARRIE SCHWAB:
Basically there's a search button. We probably have almost all of the non-profits in the system, you point and click, put how much money you want, press “Send,” and we do all the leg work to get that check out to charity.

CARRIE SCHWAB:
And, what we find, is that 90% of our users say they give more to charity, because of the donor advise fund.

BOBBI REBELL:
Wonderful. Tell us more about how people can learn more about you, your work at Schwab. I love your personal Twitter feed, it's awesome. You really have great, inspiring-

CARRIE SCHWAB:
Oh, thank you.

BOBBI REBELL:
Messages on there. Where can people find out more?

CARRIE SCHWAB:
Well, you can follow me @carrieschwab, and you can also follow on Carrie Schwab-Pomerantz on Facebook, and I have a lot of my content, my Ask Carrie columns, personal finance columns.

CARRIE SCHWAB:
Or, if you want an educational site, I highly recommend schwabmoneywise.com. It does have my Ask Carrie columns, but it has lots of tools, and calculators, and information about every aspect about personal finance; and it's for all levels of knowledge around finance.

BOBBI REBELL:
Yes. I have been on the site many times. It is very well done, highly recommend, and highly recommend listening to you more. Thank you so much, Carrie, this has been wonderful.

CARRIE SCHWAB:
Oh, so much fun working with you, Bobbi.

BOBBI REBELL:
Hey, everyone. Love how much you can tell that despite her frustration, Carrie really cares about her friends. Let's get to my tips.

BOBBI REBELL:
Financial grownup tip number one. Carrie held back from saying what I would have said to her friend, which is, “Sell the car already!” I know that cars depreciate in value, and so it's hard because you kind of feel like you're losing money, but really, if she needed the cash, why not just downgrade to that less expensive electric car right now?

BOBBI REBELL:
And, while her friend was at it, maybe there are other things that she can sell that she truly isn't using to pay for her daughter's tuition, rather than be delivering groceries in fancy, red, sports cars.

BOBBI REBELL:
Financial grownup tip number two. Adding to Carrie's advice, to bring in a third party for financial advice. Very often, the best way to help a friend is often to only be a friend. Bring in professionals to help with, maybe not only the financial stuff, but also when it comes to relationship issues or other major life crises.

BOBBI REBELL:
Not that you can't listen and be supportive. Of course you should, as a friend, but pushing them to make a decision that is obvious to you, and usually the world, could also backfire on your friendship and have long-term ramifications; because the truth is, as much as I think Carrie should have been even more blunt with her friend, and tell her to sell that Tesla already, every time the friend missed her Tesla she could potentially resent Carrie.

BOBBI REBELL:
And, it would take a big toll on their friendship, so it's really a delicate thing. I think Carrie had great advice.

BOBBI REBELL:
Thanks to all of you for supporting the show. One way to do that is to leave a review on Apple Podcasts, aka iTunes, or wherever you listen to Financial Grownup. I read every one, and they are truly appreciated.

BOBBI REBELL:
Also appreciated, Carrie Schwab-Pomerantz, whose great story of friendship and money really helped bring us all one step closer to being financial grownups.

BOBBI REBELL:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart, and is a BRK Media production.

Growing up with dad Tony Robbins taught Josh Robbins the value of the intentional and unapologetic splurge.  Josh Robbins shares the no-regrets story of his 11-year old self blowing a huge sum of money on one of the most memorable days of his life. 

In Josh’s money story you will learn:

-The lessons Josh learned being behind the scenes at his dad, Tony Robbins events

-How at age 11 Josh started his own business 

-Josh’s sales strategy

-The unexpected way Josh spent his profits

In Josh’s lesson you will learn:

-Josh’s philosophy on material goods vs. experiences

-His thoughts on whether he should have invested his profits in the market

-Josh’s take on side-hustles

-Josh’s advice on how to find more time to accomplish your goals

-Josh’s warning about social media and Netflix

In Josh’s Money Tip you will learn:

-How to find out what fees your are paying in your 401(k)

-How the law concerning 401(k) fee disclosure has changed

-What level of fees is considered too high

-What to do if your plan is costing you too much

-The financial consequences of even a 1 percent increase in fees

In my take you will learn:

-Why I at first disagreed with Josh’s financial decision, and how he changed my perspective

-The value of shared experiences and the memories from them 

-The financial impact of how you choose to spend you time, not just your money

-Strategies to invest in yourself

Episode links:

To check what you are paying in your 40 (k) go to showmethefees.com

To learn more about Josh Robbins and America’s Best 401 (k)

AB401k.com

Tony Robbins donates all of his book proceeds to Feeding America. 

To learn more about Tony Robbins Feeding America: http://www.feedingamerica.org/

Follow Josh Jenkins-Robbins

Twitter @jenkinsrobbins

Facebook: Josh Jenkins-Robbins

 

Growing up with dad Tony Robbins taught Josh Robbins the value of the intentional and unapologetic splurge. Josh Robbins shares the no-regrets story of his 11-year old self blowing a huge sum of money on one of the most memorable days of his life. In this Financial Grownup podcast episode you'll learn how even a 1% increase in fees can have consequences and the ways you can invest in yourself. #InvestInYourself #Money

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Transcription

Josh Robbins:
I would love to say I was really smart, and I saved it, and I stuck it in the market, and today, it's worth a million bucks. But I actually took it home, got about 10 of my friends, rounded them up, and we all went to the local fair that happened to be in town during that time in the summer. We had the most fun time ever. We spent all thousand dollars, walked in there with nothing.

Bobbi Rebell:
You're listening to Financial Grownup, with me, Certified Financial Planner Bobbi Rebell, author of How to Be a Financial Grownup. And you know what? Being a grownup is really hard, especially when it comes to money, but it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hey friends. Today's story is about living your life, not your bank account. I'm not talking about being irresponsible like blowing your child's college fund or not saving for retirement. I'm just saying it is okay to give yourself permission to enjoy what you earned. Create memories with your friends and family. Josh Robbins is the Chief Strategy Officer at America's Best 401K, which is a major disruptor in the retirement business, one that I actually talk about in my book, How to Be a Financial Grownup. Josh is also the proud son of Tony Robbins, whom I have had the pleasure of interviewing a number of times and who contributed both a story and the foreword to my book as well.

Bobbi Rebell:
Josh, of course, as you can imagine, had an unconventional childhood to say the least, and as an adult, he is truly living by his father's life philosophies. This was a great conversation for me, because it reminded me that we have to live our lives and create great experiences with those we love. I hope you enjoy it as much as I did. Here is Josh Robbins. Josh Robbins, you are at Financial Grownup. Welcome to the podcast.

Josh Robbins:
It's great to be here. Thanks for having me.

Bobbi Rebell:
I can't believe it's been almost a year since we met. We met at the Nasdaq. Your family was being honored because of your dad's charity, Feeding America, and how many millions of meals has that been?

Josh Robbins:
Gosh. You know what? It's already ... He donated the profits from both of his financial books Money: Master the Game and Unshakable. And so, now, it's over 300 million meals.

Bobbi Rebell:
Oh my gosh.

Josh Robbins:
And now, they're on track to do a hundred million meals a year for the next seven years. So they'll have done a billion meals just through the profits and through also, just through matching. So, at Feeding America, if anybody's listening, wants to make a donation, Tony will match it. I think it's feedingamerica.com/tonyrobbins. Really simple. So he's committed to making a difference.

Bobbi Rebell:
It's interesting because you grew up in a very interesting environment, where you would be backstage at your father's events. Tell me your money story. You were a little entrepreneur, at what age? 11?

Josh Robbins:
Yeah. I was always trying to figure out how to hustle and run around and make money. And so, Tony has these big seminars. And back then, they'd be like these marathon events like 10 days long. There was one, that I remember in particular, where there's about 5,000 people there. So every lunch and dinner, they'd go out to these big giant tents, these meal tents, where people were sitting down eating, and I pounced on that opportunity to work on my sales skills.

Bobbi Rebell:
What did you do, Josh?

Josh Robbins:
I ended up buying these key chains that were really inexpensive.

Bobbi Rebell:
Do you remember what your cost was?

Josh Robbins:
I think my cost was a buck, and I was selling them for like three to four.

Bobbi Rebell:
Nice. Big profit.

Josh Robbins:
Yeah. So, big profit margin, and everybody loved it, because I'd come to the table. I think everybody just loved the idea that an 11-year-old was kind of selling [crosstalk 00:03:29]-

Bobbi Rebell:
You were probably milking that cuteness, you know?

Josh Robbins:
Yeah, well, it's like girl scout cookies, like what? Are you going to say no? So, anyway, it was fun. I ended up raking in about a thousand bucks over the course of this event.

Bobbi Rebell:
Oh my gosh. Wait, so, $1,000, like, what's the math on that? $3 each. Oh my gosh. You were selling a lot of key chains.

Josh Robbins:
A lot of key chains. I think everybody in that event had those key chains at the end, and I'm sure they all felt super obligated to buy one too. So, it was great.

Bobbi Rebell:
But it was a high quality key chain, I'm sure.

Josh Robbins:
Oh it was incredible. I'm sure they're still around today.

Bobbi Rebell:
All right, so you walk away with a thousand bucks. So that, first of all, that's a great, great story because that's your entrepreneurial venture and you're learning. But then what happened to the money? You go home, then what?

Josh Robbins:
I would love to say I was really smart, and I saved it, and I stuck it in the market, and today, it's worth a million bucks. But I actually took it home, got about 10 of my friends, rounded them up, and we all went to the local fair that happened to be in town during that time in the summer, and we had the most fun time ever. We spent all thousand dollars, walked in there with nothing.

Bobbi Rebell:
In one day?

Josh Robbins:
In one day, played every game, wrote every ride, and just did every possible thing you could want to do at the fair, and my friends were ecstatic, and I was ecstatic. It was beautiful because I learned a really valuable lesson, in the sense that, money is just a tool, right?

Bobbi Rebell:
Right.

Josh Robbins:
And money can be used to create incredible experiences. Stuff is fun for a little while, but experiences are really what life's about. And so, that was such a beautiful lesson for me. Obviously, saving, you know, I learned how to do ... learned that later, but that was a really, really beautiful lesson for me to have.

Bobbi Rebell:
Yeah, so, what is the takeaway then for our listeners? And by the way, where were the parents when this was going on?

Josh Robbins:
Great question. It's like a little bit of the Lord of the Flies stuff going on there.

Bobbi Rebell:
I know. I mean, I don't know. I feel like this is a different era that there are all these 11-year olds running around, spending hundreds and hundreds of dollars each at this day. It's interesting, because millennials now, at least as a stereotype, are into experiences. So is that the lesson for our listeners? There's a line though, there's a fine line, because as you said, if you had invested that $1,000, we could be having a different discussion.

Josh Robbins:
You're absolutely right. Yeah, I think look, for me, I think the takeaway is twofold. One, we're living in the day and age of the side hustle. You know, as Gary Vee would say, I think everybody needs to figure out how to create that additional money that they're going to be able to sock away. So, if they can have it from their job, great. But if they just say, "Hey, you know what? I can't make ends meet," there's always time. What's the average amount of time people watch TV these days? It's crazy.

Bobbi Rebell:
And not to mention social media.

Josh Robbins:
Oh social media. I mean, everything's time drain. So when people say they have no time, I just don't buy it. So, to me, I think creating that opportunity for yourself, to have financial freedom is incredible. So that's got to become a priority, because they can't afford it, right? But you got to pay yourself first. So in other words, let's just say tomorrow, the government raise taxes 10%. We'd all whine and moan, but we'd all end up paying, right?

Bobbi Rebell:
Mm-hmm (affirmative).

Josh Robbins:
And you got to think about your future the same way. You got to pay your future self in the same way. So, you know, I'm going to tax my current self 10% no matter what or more, but I'm going to do it for my future self. And yeah, it might create some cutbacks in the short term, but if you don't have the cutbacks, go out and get a side hustle. Make it happen.

Bobbi Rebell:
I know one thing you love to focus on, and it's something that we all need to focus on more, is fees.

Josh Robbins:
Yeah, I think one of the most interesting things is ... Tony went out and interviewed 52 top financial minds in the world, and it kept coming back to fees as one of the main themes, if you will. What I mean by that is most people have no idea. In fact, I just read a study recently that said 96% of people know exactly how much they spend for their Netflix account, but 71% of Americans think they pay no 401k fees whatsoever. That obviously is a financial literacy challenge, right? And by the way, that's not unusual. So if you don't know how much you paying in 401k fees, it's purposeful, right? It's opaque at best.

Bobbi Rebell:
Yes.

Josh Robbins:
For the first 30 years of the 401k's existence — it started in 1983 — up until 2012, they didn't have to tell you how much they were charging, how much they were extracting from your accounts. It's crazy. There's no disclosure.

Bobbi Rebell:
Right, but now they do. So, how specifically can people find out what the fees are? And how do you know if it's the right amount? Because it's okay to pay a little bit. I mean, people that are running it should get paid, but how do you find it out, and how do you know if you are paying too much?

Josh Robbins:
Great question. So now, they issue this thing called fee disclosures. So the challenge is they're very long and kind of opaque. But you as a participant, if you're on a 401k plan, you should request a copy of your fee disclosure, from whoever your current provider is, and they have to provide it to you. And then I'd start to do a little bit of archeology and take a look at that and uncover those fees. Now, we do that as a free service, which we can talk about later. But the point here is that you've got to uncover the fees, and I would say that 0.75% or less as the all-in fee, okay?

Josh Robbins:
I'm talking about the cost of the funds, the cost of the administration, the cost of what they call record-keeping, all of those should be 0.75% or less, and unfortunately, they're more like one and a half or two and a half particularly for small business. Bobbi, you know this. You know the impact of these fees. People say, "Oh it's only 1% or a small percent." Let me give you an example. If you have two people, two neighbors, both contributing to the 401k the same amount, both get the exact same returns in the market. Okay, and both take out the exact same amount at retirement, all things being equal.

Josh Robbins:
If one has 1% in fees while the other has 2% in fees, the person with 2% in annual fees will run out of money 10 years sooner than the person with 1% fees.

Bobbi Rebell:
Oh my gosh.

Josh Robbins:
10 years. A full decade, they're going to run out of money.

Bobbi Rebell:
And we're living longer, which is a good thing, but we need our money that we worked so hard for. So you are the Chief Strategy Officer at America's Best 401k, which I also by the way talk about in my book, How to Be a Financial Grownup, and how you are disrupting the industry. So tell us specifically what you offer and how people could use that to get this information and maybe make the right decision for them.

Josh Robbins:
We just say, "Hey, look, we're going to eliminate all the middlemen, all the brokers, all the unnecessary middlemen. We're going to offer low-cost index funds only, and then we're going to add a very one transparent advisory fee." So our typical plan is like 0.6% or less, all-in for everything. So, that's what we do, and we have a website for people that don't want to go through that whole financial archeology on their own. Whether you're a business owner, or you're an employee, or you're an employee that wants the business owner to pay attention, you can go to showmethefees.com.

Josh Robbins:
Showmethefees.com is a fee checker, where we allow ... We kind of give you like a ... I'm going to call it an initial estimate, kind of like Zillow does its estimate. So we're going to do the same thing. We're going to give you an estimate in the ballpark. And then if you want to take it one step further, all you have to do is just send us that fee disclosure that you can just get from, you know, call the toll-free number of your current provider and just ask them to send it to you and then upload it to us, and we'll help you uncover those fees. What you have to understand is if you're an employee, your employer's on the hook with the Department of Labor with legal liability to make sure that the plan is set up for the sole benefit of the employee.

Josh Robbins:
So they need to look at fee savings and cost savings opportunities. Employers want to know this stuff. And you as the employee can look like the hero, if you bring them a great opportunity to save a significant amount of money, because with just like the 1% and 2% example, when you compound it out over time, these 401ks can be firing on all cylinders, and right now, most of them are kind of limping along in mud. So, there's a lot of work to be done out there. We've got a long road to climb.

Bobbi Rebell:
All right. Well good stuff, Josh Robbins. Where could people find you if they want to follow you? Social media, all that stuff.

Josh Robbins:
Yeah, I'm at jenkinsrobbins.com. J-E-N-K-I-N-S-R-O-B-B-I-N-S. And then our company is at AB401k. A-B-4-0-1-K.

Bobbi Rebell:
Awesome. Thank you so much for joining us.

Josh Robbins:
Yeah, thanks for having me. I appreciate it.

Bobbi Rebell:
Hey friends. Here's my take on the story that Josh shared with us. Financial Grownup tip number one. Josh gave me a great reminder. A responsible splurge can be a good thing. So when he first told me that he spent all of his earnings on one fantastic day with his friends, at first, I thought the lesson, from his perspective, would be one of regret, wishing he had saved and invested the money. But in fact, decades later, he still has such incredible memories of that day. He really doesn't have any regrets, so I realized my gut was wrong. Now, if you're an adult, you have financial responsibilities. You can't necessarily go blow money from your kid's college fund on a great day with your buddies.

Bobbi Rebell:
But let's put this in context. It was one day's earnings, and he was a kid. He was 11. No one was depending on him. Here it is decades later. The memories of the shared experiences are priceless. Financial Grownup tip number two. Josh talks about making time for opportunity. He has some great reminders to create time for yourself and set yourself up for financial freedom. He points out that he and his dad, Tony Robbins, often hear people say they just don't have the time. Well to Josh's point, maybe watch a little less TV. Spend less time on social media. Find the time to invest in yourself, if that's a priority.

Bobbi Rebell:
Thanks to everyone for your support. If you have not already, please subscribe. If you have a free moment, reviews, totally appreciated. I know you guys are super busy. That's one of the reasons I keep the shows short. Be in touch. I am on Twitter, @bobbirebell and on instagram, @bobbirebell1. And for sneak peeks into upcoming episodes and some behind-the-scenes info about the podcast and my guests, get my newsletter. Just sign up at bobbirebell.com. I hope you enjoyed Josh Robbins' story and that we all got a little bit closer to being financial grownups.

Bobbi Rebell:
Financial Grownup, with Bobbi Rebell, is edited and produced by Steve Stewart and is a BRK Media production.