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The Myth of Working Until You Die

working, denver financial planner

There is no doubt that I am getting crabby in my middle age, and one thing that gets my goat is when people tell me that saving is too hard, and they are just going to keep working until they die.  Physically, I am giving the speaker a bland smile and nodding, but inside I’m thinking, “You should be so lucky, pal!”


Let’s get real.


It’s true, people are staying in the workforce longer.  The U.S. Bureau of Labor Statistics reported in 2017 that 32% of people ages 65 to 69 were working, and 19% of people ages 70 to 74 were employed.  The projection for 2024 is that 36% of people ages 65 to 69 will be in the labor force, compared to 22% working in 1994.*


The reasons for this shift range are many:


  • Longer life expectancies
  • Better education leading to less physically laborious work
  • Not enough retirement savings
  • Just plain love of work


However, there are those who are forced to leave the workforce before they are ready.  Ageism is alive and well, and if you don’t believe me, read this article in Forbes detailing 11 sneaky ways companies get rid of older workers.


And then there’s the unexpected.


There is also the unexpected health change that can appear at anytime during our lives.  A 2014 Employee Benefit Research Institute survey found that 33% of workers expect to retire after age 65, but only 16% of retirees report staying on the job that long. The median retirement age in the survey was 62.  Forty nine percent of respondents said they left the workforce earlier than planned because of health reasons.


Why do I bother telling you all this sad news?


My takeaway, as usual, is that it’s never too early or never too late to start saving!  Your willingness to work until death may be there, but your body or boss may have other plans.  Reduce expenses and sock money away now.  Your older self will thank you!






Divorcing? Run away from home!

divorcing, denver financial advisor

Frequently when I’m talking to a new client, he or she will start of by saying “I’m sorry, I don’t have more saved.  Or, “I’m sorry, I made these mistakes in the past.”  Believe me, we all, even financial planners, have made money moves we regret.


One that came up recently in a phone consultation was a woman who had to file for bankruptcy because she kept her family home after her divorce.  She was beating herself up for that decision, but I have seen it so often.


So, for those of you contemplating divorce, and this goes for men and women equally, let me just lay it out there:  DON”T fight to keep the marital home.


Top five reasons


  1. It’s possible you barely could afford the mortgage and upkeep together. You certainly won’t be able to living off one income.


  1. The upkeep is a pain as a single person. You don’t have a spouse to stay home from work or help coordinate plumber visits.  Unexpected repairs could derail your fragile new single-person budget.


  1. Bad memories – this is the scene of your marriage ending.  Move on to a fresh environment while you heal from this trauma.


  1. You are staying put to not disrupt the kids or force them to move into a smaller house. Guess what?  The kids are disrupted already.  Just get them used to the new situation, housing and all, at one time.  They kids will recover, and you won’t be broke.


  1. The better asset to get in divorce is something liquid and that doesn’t have a huge mortgage on it. Think IRAs, investment accounts, pensions, etc.


Renting for the first year after divorce is a good idea.  It lets you get your feet under you financially without the pressure of financing a new mortgage and home repairs/improvements.


The lesson here – if you are getting divorced, run away from the home!

The SFP Channel: Resolving Credit Card Debt

If you’re like most Americans, you might be carrying a certain amount of credit card debt. But how can you get out from underneath that stress? Click on the video below to get manageable tips that will help you achieve your financial goals!


Check out this video!



If your finances look like a pile of puzzle pieces without any cohesive picture, I can help! With my experience and education as a Certified Financial Planner ™ designee, I will work with you to piece together your unique financial puzzle. All this without an accompanying sales pitch for investments or insurance. My services are fee-only, meaning my clients pay me directly for advice. I receive no commissions for selling investment or insurance products. The recommendations I make are what I feel are best for you without any conflict of interest from possible commission payouts. 


Mother’s Day & The Mother of All Gifts

mother's day, denver financial planner

Mother’s Day is just around the corner.  If you haven’t started shopping or made brunch reservations yet, take a page out of the rich and famous for ideas to let Mom know how much you appreciate her.


  • Pop star Rhianna in 2012 gave her mom a 5-bedroom house in Barbados.
  • NFL quarterback Terry Bridges’ mom rolls in her pink Cadillac Escalade thanks to his 2014 Mother’s Day gift.
  • Dwayne Wade gifted his preacher mother a church from which she could spread the good word.
  • Leonardo DiCaprio planted a grove of trees in his mother’s honor in 2006.  Well, I’m sure he had it done for him.  I can’t see Leo out there with his 21-year-old supermodel of the week girlfriend actually digging holes for trees.


What can the rest of us do for Mom that’s creative and within a reasonable budget?


mother's day, denver financial plannerBamboo Bath Caddy.  Who wouldn’t want this? $40 at


Basket of pampering lotions and potions – be creative.  Get her something she might not have tried like sheet masks, bath oil, or other newfangled beauty products.


Plan a picnic!  So much more fun than sitting in a crowded restaurant.


Schedule a spa treatment.  My mom and sister and I have had fun at the 5-Star Salt Caves in Denver.  Mom and I did a 50-minute treatment in the Himalayan salt cave and felt like we’d been breathing sea air afterwards.  We also did the ionic foot baths that pull impurities from your body out through the soles of your feet.  It was truly bizarre and disturbing, but so much fun!


Visit a winery together.  Just about every state has a wine industry these days.  Whether the wine is delicious or you’re happy to use the spit bucket, the tour will be different and educational.



Mind over Money with Dr. Alec Baker – Part Deux

Welcome to Part 2 of my interview with Dr. Alec Baker of Peak Living Psychology.  Today we tackle one of my favorite topics of mind and money – the act of consistently outspending income.


Let’s begin


KS:  When people spend outside of their means, what is at the root of that?


AB:  People’s spending behavior is generally related to their core beliefs.  People who spend more than they make are often either in denial of their financial reality or have some plausible reason why overspending doesn’t matter.


For instance, you might have a single income family where the primary earner insists paying for the top tier TV package with all of the bells and whistles because that is their reward for working hard and if they can’t afford that their all of their hard work is for nothing.  To admit that they can’t afford it would be deflating and lead to a sense of failure for that person.


As a result, they refuse to make a different choice and run a deficit on the family credit card each month that leads to truly problematic debt in the long run.  This sort of denial and AVOIDANCE is a common emotional response to an impossible or undesirable situation.


In another example, we can see that a sort of magical thinking about spending can give someone that plausible deniability that what they are doing will be ok in the long run.  Imagine a 30-something couple with two incomes and no children.  They love to travel the world and are both very optimistic about their future earning prospects.  One owns a business that is still growing and has a future earning potential of around $250k per year.  The other has just finished professional training school and expects to be making more year over year for the next five years or so.


These two have lots of optimism, so they take a trip to “Yacht Week” in Croatia that costs $7k per person and they add a stop in Paris for five days that adds an additional $2k per person because, c’est la vie!  They believe they won’t be able to enjoy it in five years because they might have kids and all sorts of other obligations and since the future is bright they don’t think much of the expense.


Even though their future earnings could support spending $18k in two weeks, their current earnings are closer to $125k combined and they have to do the whole thing on credit.  In the meantime, their balances are stubborn and their paying hundreds of dollars in interest payments.


KS:  There you have it.  Overspending your income has lots of reasons and doesn’t make you a bad person.  But, not recognizing the habit and digging yourself into lots of credit card debt or not having emergency savings will have long term negative consequences.


Stay tuned for next month’s installation about characteristics of people with great money habits.


Dr. Alec Baker

Dr. Alec Baker owns and operates Peak Living Psychology – a full service psychological services practice located in South Denver.  Peak Living Psychology offers financial therapy, traditional psychotherapy, and psychological assessment services to the Denver metro area with a focus on helping individuals and families cultivate the best things in life.  More information can be found at

IRAs – to contribute ore not to contribute?

IRAs, Denver financial planning

April 15th is just around the corner and one of the questions your CPA may pose to you is, “Will you make an IRA contribution for 2017 before the deadline?”  And you are thinking, “Should I or not?”


Individual Retirement Accounts (IRAs) come in a couple of flavors:  Traditional or Roth.

Traditional IRA

A Traditional IRA allows you to take a tax deduction for up to $5,500 ($6,500 if you are aged 50 or over) for putting that money in an account for your retirement.  The money needs to be left there until your age 59 ½ or you risk paying an IRS penalty of 10% for early withdrawal.  The growth is tax-deferred, meaning you will not pay taxes each year on dividends and capital gains generated in the account.  When you take the money out at retirement, the withdrawals are taxed at your ordinary income tax rate.


Who wouldn’t want that?  Turns out, you may not be able to take that lovely up-front tax deduction.  If you are eligible for a work retirement plan (even if you choose not to participate – FOOL!), you cannot deduct an IRA contribution if you make over a certain income.  Being subject to IRS rules, those limitations are tiered and complicated to write out, so click here for a handy table from your friends at the IRS.

Roth IRA

The other option you could use is a Roth IRA.  Roth IRAs do away with the up-front deductibility of the Traditional IRA.  In other words, the $5,500 (or $6,500 for you old folks) that you put in a Roth IRA would be the same as putting the money in a savings account from a tax standpoint.


The benefit – and it’s a big one – is that the money then grows tax-FREE so when you take it out after age 59 ½, you pay no income taxes on the withdrawal.


No matter what the tax benefit, you I’m guessing you should be saving more for retirement.  This is especially true if your accountant is telling you that you owe a tax bill.  If you are a small business owner, explore the plans available to you in addition to the accounts described above.


Happy tax season!

Retirement Risk Alert!! Grown Children

grown children, denver financial adviser

There was reader question to a column called The Sweet Spot in the New York Times recently.  A mother was wondering if it is mean to ask her mid-twenties children to move out of the family home and start paying their own bills.


The columnists reacted predictably by telling the parents that by enabling their grown children to live a life of convenience and ease on Mom and Dad’s dime they are robbing said children of the privilege of struggle.  That’s right, struggle is the work that leads to the joy of resilience and self-sufficiency.


Easy for YOU to say


Why is it so easy to write this advice, yet so many are in this trap?  Maybe because parents want to be liked by their kids and making them live with 7 roommates, take the bus, and have a cell phone plan with no data isn’t the path to parental popularity.


Perhaps some hard numbers will help motivate parents to live through the short-term dislike of their kids to get them off the payroll and into a satisfying habit of working for a living.


Here’s an example


Abednego and Gizmo are 65 years old and retired.  They have $500,000 invested and a total of $25,000/year of Social Security.  Using the handy 4% withdrawal rule (for retirees in their 60’s), Abednego and Gizmo’s financial planner tells them their annual spending should stay around $45,000/year total.


This budget should allow raises for inflation, bad market returns, and income lasting 25 years to age 90.


Abednego and Gizmo’s 30-year-old daughter, Mebunnai has just moved back in with them following her divorce.  Suddenly, between paying Mebunnai’s cell phone bill, car insurance, and extra food, Abdnego and Gizmo’s budget has swelled to $50,000 per year.  This is a 25% increase over the suggested withdrawal rate.


Blame the messenger


Their financial planner warns that if this keeps up, they will run out of money in a mere 19 years at the tender age of 84.  Abednego and Gizmo now see the importance of nudging Mebunnai out of the nest and back to financial independence as soon as possible.


Remember, if you don’t want to feel like a bad guy to your kids, you can always blame your financial planner.  Don’t have a financial planner to throw under the bus?  Contact me for a 15-minute consultation to see if there is a fit for working together.

WTF (What the Finance) is Bitcoin? Let’s talk about it

bitcoin, denver financial planner

Welcome to a new recurring feature of my blog called WTF – What the Finance?  Here I will attempt to make understandable the maze of financial jargon we planners love to speak and this week I’m focusing on Bitcoin.

What’s this Bitcoin thing?

So, what’s all the fuss about trading Bitcoin?  Should you be in?  Out?  Over?  Under?  My position in Bitcoin is “over.”  As in I’m over it.


First, some explanation:  Bitcoin is one of many (but apparently the most famous) types of cryptocurrency.  Cryptocurrency can be used as payment for online transactions.  However, there is no central bank or country backing the value of the currency.  No regulation, either.

How can I use Bitcoin?

You can’t use Bitcoin at King Soopers or TJ Maxx.  Yet.  Bitcoin is accepted as payment at over 125,000 merchants, so maybe it has a future as a widely accepted currency and will become a part of our daily lives like the internet and chocolate.  However, a big concern about cryptocurrencies is that you can use it to buy some pretty illegal stuff on the internet.  Use your imagination.

Should I be investing in it?

Why has Bitcoin gotten so much attention lately?  Well, people have been betting that the value of Bitcoin (remember, backed by no government taxation or hard asset) will go up, so they are trading the digital “coins” and driving the price of the currency itself way up.  Any time an investment, term used loosely, goes up 1000% as Bitcoin did in 2017, people are going to be talking about it.


Always remember, what goes up 1000% in a year can likely drop by that amount in half the time.  As of this writing in early February, Bitcoin had dropped below $7,000 from a high of $18,000 just a month earlier.  If you got in at the peak of the frenzy, you have lost a ton of money.  And not even some awesome shoes or a car to show for it.


Agustin Carstens, general manager of the Bank for International Settlements (an umbrella organization for the world’s central banks), described bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster.” The last refers to the energy-intensive process of “mining” the digital currency.*  He said a bunch of other stuff that was negative, but I thought that line was the best.


An acquaintance told me a couple of months ago that she was trading Bitcoin.  She asked me if I was trading Bitcoin, too.  I replied, “No, I’m a financial planner.”



Mind over Money? Discussing Financial Roadblocks With Dr. Alec Baker

alec baker

So many money decisions are not about what we think, but how we feel.  To that end, I’ve enlisted the help of a guest blogger to address some questions around emotions and finances.  Today I present the first of 3 questions I posed to Dr. Alec Baker.


Dr. Alec Baker


Dr. Alec Baker owns and operates Peak Living Psychology – a full service psychological services practice located in South Denver.  Peak Living Psychology offers financial therapy, traditional psychotherapy, and psychological assessment services to the Denver metro area with a focus on helping individuals and families cultivate the best things in life.  More information can be found at



KS:  What are examples of psychological road blocks to financial success?  Is it lack of education?  Fear from a past mistake?  Things our parents did or didn’t teach us about money?


AB:  Psychological roadblocks come in all sorts of shapes and sizes.  Basically, they are unconscious beliefs that lead to habits and choices that prevent us from reaching our goals.  Generally speaking they are NOT a lack of education, but rather feelings that stem from core beliefs about money that get in the way of putting good information to use.  What I’m getting at here is that we all have core beliefs about money (e.g. spending is bad, saving is good) and that we have emotional responses to either living those core beliefs (e.g. pride, calm, self-esteem) or living contrary to them (e.g. shame, embarrassment, anxiety, fear) that lead us to make the choices that we make.


Here’s an example


Imagine that I’m someone with a core belief that spending money is undisciplined and frivolous while earning and saving are the only virtuous choices a person can make.  One day a tree falls on my roof and I have the option to pay my $2000 deductible and repair the whole roof or pay $1000 to patch it.  First, I have that high of a deductible because I always choose the lowest premiums possible– yay low spending!  Second, I would obviously choose the patch option because I’m spending as little as possible and living my core belief that spending is undisciplined.  The trouble is that the patch job ends up being less effective and I get a series of leaks over the next few years that a) end up costing well more than the extra $1000 to repair the whole roof, and b) cannot be covered by insurance because I did not submit a claim.


The insistence on spending as little as possible due to a faulty belief that all spending is undisciplined can lead to choices that bring me higher costs and more spending in the long run.  People may have all of the education they need here to see the most effective long-term, but they are so anxious about doing it that they ignore your advice and do it their way.  In those cases that also might be your last conversation with them.


These core beliefs can be the result of lessons learned from personal experience (e.g. I spent too much on going out and leisure activities and then didn’t have enough for an ER bill) or from family cultures (e.g. depression era parents who never spent any money and made it forbidden because you never know when the next “big one” will hit).


KS:  Stay tuned in April and May for more insight from Dr. Alec Baker.

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