Danielle Strumbeta

Making Your Dream of Long-term Travel a Reality

by Danielle Strumbeta | Nov 15, 2022 | Danielle Strumbeta, Family Talk, Goal Planning, Living Fully, Wealth Enhancement

When I was a kid, my parents took us on a five-week trip to Europe and it completely changed my view of the world and traveling. Up until then, I had thought that people didn’t travel before retirement or didn’t travel with kids because they couldn’t walk away from their everyday activities and responsibilities. That experience helped me see that it is possible to get out there and go on your dream vacation before age 65 with some intentional planning.

Now, I love having the chance to help others plan and encourage them to travel and take their dream vacations. It’s so rewarding to watch others live out their dreams of bike touring the Pacific Coast from Canada to Mexico, traveling the country in their Tofino van, and backpacking through Europe after missing the chance to do so in college.

With fall in full swing, many families are finding their kids back at school, and some families are experiencing an empty nest for the first time in 18 years or more. If that’s the moment you’ve been waiting for to finally take that trip you’ve been dreaming about, there might still be some items you’re unsure of or haven’t yet thought about.

Let’s say your job offers an unpaid sabbatical, but you’re not sure if taking a few months off is going to push back your retirement timeline substantially. You know you need to make your travel plans and determine your trip route, but you’re not sure what else you need to consider.

As financial advisors, we help provide clarity around these unknowns. We can certainly answer your questions about how your trip might impact your retirement timeline so you’re comfortable making the decision to take time away now that you finally can! In helping answer what else you should be keeping in mind, we’ve compiled a list of some important planning items for long-term trips:

Financials. Consider setting all your bills to autopay if you haven’t already done so. You can also set up automatic transfers for any bank or retirement accounts that you add funds to on a regular basis. Be sure to notify your financial advisor that you’ll be gone, especially if you might be unreachable for some period of time. It’s also important to notify your bank if you’re traveling so that they don’t flag your purchases as fraudulent and deny your purchases in other countries or states.

Documents. Organize your important documents and know where they are in case you need to direct someone to access them. Consider making copies of your passports, medical cards, and other documents you may need to access while traveling in case you misplace any actual documents. If you don’t already have Wills, Powers of Attorney, or Health Care Directives in place, we’d highly recommend creating those estate planning documents in case something happens while you’re traveling.

Home. Consider having someone check on your home while you’re away. You can leave them instructions for caring for your home such as watering the plants, checking that appliances are working properly, and starting up your sedentary cars every so often. Consider setting up automatic timers for lights in your home and an alarm system for security purposes if someone won’t be at your home regularly while you’re away. You can have your mail forwarded or held by the post office while you’re away as well if that’s needed. Also consider turning on auto-replies for email and tailoring your voicemail to let others know if your usual response timing may change.

Pets. If you have pets and aren’t planning on taking them with you, you’ll need to find someone to care for them while you’re away. Whether that’s family, a pet sitter through a platform like Rover, or a boarding company, it’s great to leave them with detailed instructions about your pet’s food, routine, and behavior.

Health Care. Not all medical insurance plans offer coverage outside of your home state or country. If your coverage doesn’t extend to where you’re traveling, consider putting travel medical insurance in place in case something happens. If you have any regular prescription medications, you’ll also need to work with your pharmacist to be sure you have a plan for refilling your prescriptions.

Travel Insurance. Travel insurance can help provide emergency medical coverage as well as coverage for cancelations, delays, and/or accidents while you’re traveling. Consider working with an agent to determine what the right coverage is for your travel plans.

Contingency Plan. In case something goes awry, it’s important to have a contingency plan in place. Be sure you have an emergency contact back home and have equipped them properly for anything that could come up while you’re away. For example, be sure they know who’s watching your pets or caring for your home. Consider creating a “just-in-case” bag with additional items you might need sent to you should plans change.

Conversations about planning for dream vacations is one of the best parts of my job. I’m grateful to be able to work with people to help uncover their dreams and figure out a plan to make them happen now—not only in retirement. If you’ve got ideas about what’s important for you and your future, let’s connect! I’d love to help you get there!

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

Financial Planning Items to Consider When Your Child Turns 18

by Danielle Strumbeta | Jun 28, 2022 | Advisors, Caring for Dependents, Danielle Strumbeta, Family Talk, Tech Focus, Wealth Transfer

Turning 18 is a big milestone! At 18, we become legal adults (and we like to think that means we’re real adults), although kids who turn 18 now are often still heavily supported by their families. There are some financial planning items you should be thinking about when supporting your now adult child to set you both up for success.

Health Care Directive

When your child turns 18, you’ll no longer be able to make medical decisions for them. Given this, we highly recommend your child puts a health care directive in place (also called a living will or health care power of attorney) so you’re able to make their medical decisions should something happen and they’re unable to do so themselves. In this directive, your child can spell out certain medical wishes and name agents, such as parents, who can make their medical decisions or access their medical information if they become incapacitated. Your child can create an à la carte directive through an estate planning attorney or an online estate planning platform such as Legal Zoom. Of note, once your child begins a family of their own, they may want to update their directive so their significant other is their primary agent for making those medical decisions.

Durable Financial Power of Attorney

When your child turns 18, you’ll no longer be able to legally access their financial accounts unless you’re a co-owner. Similar to the health care directive, we highly recommend your child puts a durable financial power of attorney in place so you’re able to help pay their bills if something happens and they’re unable to do so themselves. Your child can name agents, such as parents, who can make certain financial decisions for them should they become incapacitated. As with the health care directive, your child can create an à la carte durable power of attorney document through an estate planning attorney or an online estate planning platform such as Legal Zoom. Your child may also want to update their power of attorney document once they have a significant other so that person is their primary agent.

Roth IRA Contributions

As soon as your child has earned income, they can begin contributing to an individual retirement account such as an IRA or Roth IRA. Usually, your child’s first years of earnings through part-time work or minimum wage jobs will be much less than in future years when they have a career job, which is a great time for them to contribute to a Roth IRA and benefit from compound interest. While they won’t receive a current tax benefit for their contribution (which they probably don’t need if they have very little income), they instead have the opportunity to invest and then withdraw those funds tax-free in retirement. Kids who work a part-time job may want to spend those dollars on entertainment or personal items, so they may not have extra dollars to save towards retirement; however, you can help kickstart their retirement savings by contributing to their Roth IRA if you’d like to support them in this way. Your child can contribute the lesser either of the total of their earned income or $6,000 for tax year 2022, and they don’t have to contribute the exact dollars they made. Thus, as a parent (or even a grandparent), you can gift them that amount of funds either directly to their Roth IRA or to their bank account for them to contribute the funds themselves.

Bank Accounts

If your child doesn’t already have a bank account, we recommend they open one and begin getting comfortable using it. Bank accounts and debit cards are tools they’ll need to use in today’s e-commerce environment. If your child is interested in going to school outside of their hometown, they may want to consider signing up for a bank account with a larger bank that may have branches or ATMs available in other areas. Of note, different types of bank accounts have various fees to be aware of, so it might be a good exercise for your child to read the fine print before opening an account to have an understanding of those possible fees so they can proactively avoid incurring them.

Building Credit

If your child doesn’t have an auto loan, student loan, or a credit card by the time they turn 18, we recommend beginning that conversation, as these forms of debt are tools that can help your child build their credit. Sometimes a bank or lender may not approve a credit card or loan for your child with no credit history, but they may be willing to do so with a secured or student card, you co-signing on a card with your child, or you adding them as an authorized user on one of your cards. The longer your child’s credit history, the higher their score might be, which may help them receive better interest rates or terms for auto or home loans in the future. Due to this, it can be advantageous for your child to open a credit card as early as possible and keep that card open for as long as possible. While credit cards with high interest rates and limits can be troublesome if they’re misused, you can certainly teach your child to treat their credit card like a debit card, meaning they should only spend money they already have in their bank account, which they then pay off each billing cycle or sooner to avoid late payments and interest penalties.

Tracking Credit

If they haven’t already done so, we also recommend your child creates logins for all three credit bureau websites—Equifax, Experian, and TransUnion—and regularly tracks their credit score to ensure there are no errors or fraudulent activity. Your child (and you, too!) may also want to consider freezing or locking their credit with each bureau to prevent fraud if they are not expecting a bank, lender, or landlord to check their credit at that time. If a bank, lender, or landlord is going to check their credit in the future, then your child would simply need to unfreeze or unlock their credit with each bureau beforehand.

Budgeting

Help your child learn to track their expenses and create a budget so they learn how to save for items they want and better understand what it costs for them to live or participate in activities with their friends. Even with supporting your child, you may consider having them use a credit card and bank account for all their expenses and pre-paying them or reimbursing them for expenses so that they have some accountability to a budget and learn to manage that. Mint.com by Intuit is a great tool for help with tracking spending, budgeting, and savings goals.

Aid and Loans for College

College is a major life decision for many 18-year-olds. Hopefully you’ve already been talking with your child about college well before they turn 18 and have had a chance to discuss their options for schools and how much you are willing or able to contribute toward their education costs. If you’re not able to fully support their college costs, it’s important to talk with them about their financing options. Please review our Demystifying College Financial Aid article for details they should know and consider with financing.

We’ve seen these financial planning items be invaluable for the families we work with and their kids, and we hope they’re helpful for you and your family as well. We’re always happy to help talk through specific situations and questions, so please don’t hesitate to reach out about yours!

Spring Document Cleaning

by Danielle Strumbeta | May 3, 2022 | Danielle Strumbeta, Tech Focus, Wealth Protection

It’s spring, which means it’s time for some spring cleaning—and this spring’s focus is paperwork. I don’t know about you, but I don’t love paperwork. I’ve spent years working toward zero paper, and I’m now finally down to a handful of documents. I’ll share some tips below so you can minimize your paperwork, too!

Document delivery

If you’re tired of getting statements for your accounts or bills in the mail, try signing up for e-delivery instead. This will help save time and energy opening and sorting mail and having to dispose of it as well. Don’t forget to proactively visit the proper websites to check those statements and pay those bills.

Document retention

We all know we need to hang onto certain tax, asset, and legal documentation, but sometimes the specifics can be tough to remember. Here’s a quick list of the most common situations where you’ll need to keep documentation. Please see this checklist for a detailed list.

Income tax returns

Keep at least three years of state and federal tax returns and supporting documentation on file. Supporting documentation includes records that prove any income, deductions (including medical expenses), or credits claimed (W-2, 1099, end-of-year statements from banks and investment accounts). Depending on the state (like CA), you may need to keep tax returns for longer than three years. If you think you forgot to report income and it’s more than 25% of your gross income, keep six years of tax returns. If you are claiming a loss for worthless securities or bad debt deduction, keep records for seven years.

Investment accounts or bank accounts

Consider keeping the most current statements on file and the end-of-year statement until you complete your tax return.

Retirement accounts

Consider keeping documentation on any contributions, withdrawals, and conversions. If you made non-deductible traditional IRA contributions, keep Form 8606 until the account is fully withdrawn to track cost basis.

Debt (student loans, mortgage)

Keep the loan documents until the loan is paid off. Once the loan is paid off, keep documentation proving that the loan has been paid in full.
Property (automobiles, real estate). Consider keeping any deeds, titles, settlement statements, or bills of sale until you sell the property. Keep documentation showing purchase-related fees that were capitalized until you sell the property.

Home improvements

Keep any receipts related to home improvements as they may be used to substantiate any adjustments to the cost basis for your property.
Insurance policies. Keep the most current policies on file.

Estate plan

Keep a copy of your Will, Trust(s), Powers of Attorney (General and Healthcare), Living Will or Healthcare Directive, and beneficiary designations on file, and store the originals in a safe place.

Document storage

To reduce your paperwork, try storing these must-keep documents on your secure personal computer. Of course, with this storage method, it’s important to back up your electronic files and have firewall protection.

Document disposal

Please remember to shred any documentation that contains sensitive personal information, such as your Social Security numbers or account numbers. A personal shredder should do the trick and will be less expensive in the long run if you’re disposing of documents each year.

Password organization

How are you currently storing and keeping track of your passwords? I recommend using a cloud-based password manager like LastPass where you can store all your passwords in one place and only need to remember the “master” password to access them. LastPass has a random password generator to help you create complex passwords that are more difficult to hack. LastPass also offers two-factor authentication and doesn’t allow your “master” password to be reset to keep your account secure.

Digitize your photos

Does your paperwork include old family photos you’ve been meaning to digitize? Try sending them to a digitizing service like Legacy Box where they’ll scan and save them to a thumb drive, DVD, or the cloud. Legacy Box works with tapes and films, too. While this service may seem pricey, it might be worth paying someone to digitize those photos as they are priceless memories and should be backed up sooner rather than later in case something happens to the physical copies.

Inform your family

Make sure your family knows where you keep your documents and what your “master” password is in case something happens to you. This is especially important for estate planning documents. Having these conversations ahead of time will help alleviate the stress on your loved ones of not knowing what to do or where to find things.

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

Let’s Talk About Passwords and Password Managers

by Danielle Strumbeta | Dec 7, 2021 | Advisors, Danielle Strumbeta, Tech Focus, Wealth Protection

In today’s world, password security is part of our financial security. As financial advisors, we’re very aware of this and take measures to protect our clients every day. However, we also want our clients to take measures to protect themselves. One of the ways you can protect yourself is by getting a handle on your system for passwords and how you store them.

Use Complex Passwords

Let’s first review what a complex, secure password looks like. Passwords should be:

At least 16 characters long if possible
A variety of numbers, symbols, and upper- and lower-case letters
Nonsensical if you’re using words, i.e., they shouldn’t be phrases or guessable based on your personal information
Unique, i.e., you shouldn’t use the same password for multiple sites

Add Additional Security Layers

On top of creating a complex and secure password, we also encourage clients to add additional layers of security with financial logins. Here are some of the additional layers you can add:

Security Questions. When filling these out, use answers that are nonsensical so hackers can’t look up your information such as where you went to elementary school or what your mother’s maiden name was.

Two-Factor Authentication. Sign up for two-factor or multi-factor authentication if offered, which requires you to enter a code from a text, call, or email, or from an authentication app on your phone every time you log in. This helps prevent someone from accessing your online platform by guessing your password or running a password cracker.

Verbal Password. You can add a verbal password or pin at most banks for an added layer of security in case someone tries to call in as you. Each time you call in, you’ll be asked for the verbal password or pin to confirm your identity before any data is shared or any transactions are placed. Many financial advisors will also allow you to use a verbal password. Of note, your verbal password or pin shouldn’t be personal information that a hacker could look up and guess.

Review Financial Statements. We highly recommend reviewing financial statements for your accounts and credit cards to be sure there aren’t any strange transactions as hackers now process “test” transactions for normal looking purchases. For example, someone ran a $17.99 transaction for Netflix on my credit card; however, I’m not the one in my family that pays for Netflix, so I notified my credit card company of this strange transaction after reviewing my statement.

It can be hard to get started with making these changes to our current password system—until we are forced into doing so. A few years ago, I had someone hack the non-complex and unsecure password that I used for many of my logins, so I ended up spending hours tracking down logins and changing passwords. It was a painful process, and I wouldn’t want anyone else to have to go through the same. I encourage you to get started before this happens to you; at a minimum, work on these changes for your financial accounts now and then perhaps do the same on a rolling basis for your other logins.

Use a Password Manager

Part of why it’s hard to get started on these changes is not having a secure, organized storage solution for your passwords. Historically I’ve seen people use a Word document or Excel spreadsheet to catalog these; however, cloud-based password managers have been available for a while now. There are several advantages to using a cloud-based password manager. Password managers:

Allow you to store all your passwords in one organized and easy-to-search place
Only require you to remember one password
Are encrypted, so they keep your information secure
Are cloud-based, so your data won’t be lost if you lose a device
Can auto-generate complex, secure passwords for you
Allow you to store nonsensical security question answers
Are accessible from multiple devices, such as your phone and computer
Can auto-fill your passwords for websites on your phone and computer like your browser does
Allow you to share passwords with family members
Don’t have a password reset option to add another layer of security

If you’re interested in using a password manager, check out Last Pass, 1Password, Dashlane, and Keeper. We use Last Pass here at Merriman and have included a visual of Last Pass’s example “vault” below.

If you’re worried about potential password manager hackers, think about adding a fake letter or digit to all your passwords and know that you’ll need to go delete that specific letter or digit when you enter your passwords. Also keep in mind that additional security layers, such as two-factor authentication, should keep hackers from being able to login easily with just your password.

Passwords are very important for your financial security. It’s not a matter of if—it’s a matter of when someone hacks your login information. By taking some of the steps outlined here, you can make it much easier for you to manage your passwords while at the same time making it massively harder for hackers to access your online logins and information.

As advisors, we not only help our clients with their investments and financial plans, but we also help them understand the current cybersecurity landscape and how to keep their information safe. If you have any questions about your financial security, please don’t hesitate to reach out to us. We’re always happy to help you and those you care about!

Buying a Car: Does It Make Sense to Use Rideshare Instead?

by Danielle Strumbeta | Aug 31, 2021 | Danielle Strumbeta, Goal Planning, Tech Focus, Wealth Enhancement

The decision to buy a car today is different than it was a decade ago because of today’s rideshare options. If you’re in the market for a new car, there’s more to think about than shopping for the lowest price or best interest rate. Have you compared the cost of your car to the cost of using rideshare options? We have, and we’d like to share our thoughts.

Cost. Let’s compare some estimated costs of buying a car or using rideshare:

Using rideshare may cost about $7,500 less over a 10-year period—which is not a trivial amount. Keep in mind, this excludes other expenses people often pay when owning a car, such as parking fees or toll fares. For many people, owning a car is probably more expensive than our estimate. However, we’ve kept things simple here, so our cost estimates may differ from your actual costs for both owning a car and using rideshare. In addition to cost, there are other factors to consider.

Lifestyle. Your lifestyle probably also plays a part in your decision to own a car or use rideshare. Let’s meet two different couples who said just that and examine some aspects of their lifestyles:

Judy and Joe are both 35, have two kids ages 8 and 10, and a dog. They live in a house and have two cars parked in their garage.

Kim and Kyle are both 32, don’t have kids, and have two cats. They live in a condo and have two cars, which they both pay to park in their building’s garage.

Location. Location determines a big part of our lifestyles. If you live in a metropolitan area, you’ve probably spent a lot of time considering where you live, where you work, and what your commute is like. Wherever you live, do you commute to work by car? Is having your car a “must”? Here’s what Judy and Joe’s and Kim and Kyle’s locations look like:

Judy and Joe live in Redmond, and both commute to Seattle for work. Their morning commute consists of a 10-minute drive to their nearest park-and-ride, followed by a 40-minute bus ride into Seattle.

Kim and Kyle’s condo is located in downtown Seattle, and they both commute to work on foot. Their daily commute is about a 20-minute walk each way, but they’ll bus or Uber if it’s raining.

Judy and Joe agree that they only need one car to get to the park-and-ride while commuting to work. Kim and Kyle realize that they don’t need their cars in order to get to work and could save a lot of money if they downsize to one or none, especially considering they pay for parking in their building. These instances illustrate the importance of considering location when deciding between owning a car and using rideshare. Likewise, your activity choices also play an important role.

Activities. Activities and hobbies dictate a huge portion of our lifestyle choices. Do you have kids or do your favorite activities involve a lot of driving? If you love the outdoors, could you still get to those hikes you’ve been dying to do without a car? Some recreational activities may be limited when you don’t own a car, so it’s important to consider this when determining if utilizing rideshare options is not only economical but also practical. Here are some of the activities Judy and Joe and Kim and Kyle participate in:

Judy and Joe’s weeknights are spent shuttling kids to and from various sports practices. Once home, they typically enjoy a homecooked meal together. On the weekends, the kids generally compete in sporting events. Occasionally, they also get out of town for a family camping trip in the mountains.

Kim and Kyle spend their weeknights going to the gym. This is often followed by dinner at a friend’s house or a local restaurant. During the weekend, they like to hike, visit Kim’s family on Bainbridge Island, and kayak as often as Seattle’s weather permits.

Judy and Joe agree they likely still need two cars to get the kids to their conflicting practices. They’ve decided to experiment by driving only one of their cars for a couple weeks in conjunction with ridesharing as needed to see if life with one car would work for them. Kim and Kyle agree that they still need one car for their weekend trips and for hauling their kayaks around town. As we can see, our activity choices are also an important consideration in deciding whether to own a car or use rideshare.

Bottom line. Having a car for the sake of convenience may unnecessarily be costing you money. Using rideshare might save you money; however, it may be more practical for you to own a car if you’d like to maintain a certain lifestyle. We encourage you to evaluate your situation.

If you’d like to speak with a financial advisor about your current transportation situation, we can help you determine if it makes more sense for you to own a car or utilize the various rideshare options available today. Please reach out to us. We are here to help you!

Sources:

*https://bettermoneyhabits.bankofamerica.com/en/auto/cost-of-owning-a-car

** https://www.zipcar.com/pricing

***https://www.ridester.com/uber-rates-cost/