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Signs of Elder Abuse

Signs of Elder Abuse

Physical, mental & financial warning signals.


Provided by PlanningWorks


Is someone taking advantage of someone you love? June 15 is World Elder Abuse Prevention Day, a day to call attention to a crisis that may become even more common as baby boomers enter the “third acts” of their lives.1 


Every year, more than half a million American elders are abused or neglected. That estimate comes from the Centers for Disease Control, and the frequency of elder abuse may be greater as so many elders are afraid or simply unable to speak out about what is happening to them. In some cases, the abuse is limited to financial exploitation. In other cases, it may encompass neglect and physical or emotional cruelty.1


What should you watch out for? Different varieties of elder abuse have different signals, some less obvious than others.


Neglect. This is commonly defined as withholding or failing to supply necessities of daily living to an elder, from food, water and appropriate clothing to necessary hygiene and medicines. Signals are easily detectable and include physical signs such as bedsores, malnutrition and dehydration and flawed living conditions (i.e., faulty electrical wiring, fleas or cockroaches, inadequate heat or air conditioning).


Self-neglect also surfaces, stemming from the declining physical or mental capacity of an elder. If he or she foregoes proper hygiene, disdains needed medications or medical aids, or persists in living in an insect-ridden, filthy or fire-hazardous dwelling, intervene to try and change their environment for the better, for their health and safety.


Finally, neglect may also take financial form. If someone who has assumed a fiduciary duty to pay for assisted living, nursing home care or at-home health care fails to do so, that is a form of neglect which may be defined as elder abuse. The same goes for an in-home eldercare service provider that fails to provide an adequate degree or frequency of care.2


Abandonment. This occurs when a caregiver or responsible party flat-out deserts an elder – dropping him or her off at a nursing home, a hospital, or even a bus or train station with no plans to return. Hopefully, the elder has the presence of mind to call for help, but if not, a tragic situation will quickly worsen. When an elderly person seems to stay in one place for hours and appears confused or deserted, it is time to get to the bottom of what just happened for his or her safety.


Physical abuse. Bruises and lacerations are evident signals, but other indicators are less evident: sprains and dislocations, cracked eyeglass lenses, impressions on the arms or legs from restraints, too much or too little medication, or a strange reticence, silence or fearfulness or other behavioral changes in the individual.


Emotional or psychological abuse. How do you know if an elder has been verbally degraded, tormented, or threatened in your absence, or left in isolation? If the elder is not willing or able to let you know about such wrongdoing, watch for signals such as withdrawal from conversation or communication, agitation or distress, and repetitive or obsessive-compulsive actions linked to dementia such as rocking, biting or sucking.2


Financial abuse. When an unscrupulous relative, friend or other party uses an elder's funds, property, or assets illegally or dishonestly, this is financial exploitation of the elderly. This runs all the way from withdrawing an elder’s savings with his or her ATM card to forgery to improperly assuming conservatorship or power of attorney.2


How do you spot it? Delve into the elder’s financial life and see if you detect things like strange ATM withdrawals or account activity, additional names on a bank signature card, changes to beneficiary forms, or the sudden absence of collectibles or valuables.


Examine signatures on financial transactions – on closer examination, do they appear to be authentic, or studied forgeries? Have assets been inexplicably transferred to long-uninvolved heirs or relatives, or worse yet apparent strangers? Have eldercare bills gone unpaid recently? Is the level of eldercare being provided oddly slipshod given the financial resources being devoted to it?


Respect your elders; protect your elders. Some people aim to exploit senior citizens. Others simply don’t recognize or respect the responsibilities that come with eldercare. Whether the abuse is intentional or not, the emotional, physical or financial harm done can be reprehensible. Talk to or check in on your parents, grandparents, siblings or other elders you know and care for to see that they are free from such abuse.


PlanningWorks may be reached at 512 498-7526 or


Are Your Children Financially Literate?

Are Your Children Financially Literate?

New Approaches to a Changing Problem.


Provided by PlanningWorks


How bad is financial illiteracy today? So bad that your children may be at risk of making some serious financial mistakes. Some are finding that talking to children about finances has become less about the nuts and bolts of money and more about putting money’s importance to our daily lives in the correct context.

Women at particular risk. The U.S. Department of Labor reports that only 45% of working women ages 21-64 have a retirement plan. The DOL also notes that more women work in part-time jobs, and are more likely to interrupt their careers to take care of family, whether that be raising children or looking after parents. Some of these patterns are just luck of the draw, but others may come from what parents teach children about money, and how they teach it.1


Start at a young age. New York Times money columnist Ron Lieber’s book The Opposite of Spoiled discusses ways to prepare children for dealing with financial issues. The title refers to the author’s search for an antonym to the word “spoiled” in the context of an entitled and demanding personality. Lieber suggests focusing on values like graciousness in communication, which can lead to more openness in discussing money. Money can be frightening or mysterious to many, even well into adulthood, and Lieber encourages approaching the topic with fewer facts and figures and more as an emotional issue. The reasoning for this is that money is, for children and adults, an emotional topic.2


The emotional toll of money issues. While most people have experienced money worries at one time or another, the science surrounding this phenomenon is compelling. Many mental health organizations have special literature dealing with the emotions that surround money troubles, including Duke University’s Personal Assistance Service. They cite an American Psychological Association survey asserting that 80% of Americans experience genuine stress related to money, and that half of Americans worry about their ability to provide for their family. While money is always an uncertain and fluid factor in our lives, how we deal with these stresses may be strengthened through early experiences and developing good emotional habits early on. Frank talk about these emotions may demystify money and, in the process, boost financial literacy.3


Education is still needed. Of course, money is far more than an emotional issue; being comfortable with a topic doesn’t guarantee proficiency, it merely makes it easier to learn.


In 2014, the Organization for Economic Cooperation and Development tested 29,000 students aged 15 from 18 member countries or economic regions. Students in top-scoring Shanghai had the highest average score at 605, while the lowest average score belonged to 15-year-olds from Colombia at 375; the average score for U.S. students was a mediocre 490.4

While a number of factors may contribute to the lower scores, there were few obvious indicators, beyond a simple lack of financial sophistication. For example, while those with better math and reading skills were more likely to demonstrate financial literacy, not all with high proficiencies were demonstrably better with money. However, those who indicated that they enjoyed solving complex problems earned higher scores. This may be key. U.S. Education Secretary Arne Duncan indicated that teens needed to be more financially proficient, and in ways that their parents and grandparents never had to be.4


Prescriptions in progress. There are a number of online sources for financial education, helpful to both teens and young adults. The Ad Council and the American Institute of Certified Public Accountants have a national campaign, Feed the Pig™, to try and correct this dilemma (learn more by visiting The National Council on Economic Education has also helped launch to acquaint young adults with vital financial principles.


PlanningWorks may be reached at 512 498-7526 or


News Flow from PlanningWorks

Financial Key Points

·         Falling oil prices are causing near-term uncertainty but should benefit economic growth over time.

·         The Fed may signal this week that it is getting ready to begin increasing interest rates.

·         Economic growth continues to improve, which should act as a further tailwind for equity prices.

The dominant financial story last week was the concern over the continued slide in oil prices, which have dropped close to 40% so far this year.1Worries about the growing power of the Greek opposition party Syriza, and the potential effect on European policy should it assume control over the government, also contributed to investor unease. For the week, the S&P 500 Index fell 3.5%, snapping a seven-week winning streak and suffering its largest one-week pullback since May 2012.1 Energy stocks led the decline, while some defensive sectors such as utilities fared better.1 High yield bonds also sold off and investors poured money into Treasuries as risk aversion spread.1

The Benefits of Lower Energy Prices Outweigh the Risks

Falling oil prices do present risks. Lower prices hurt energy producing companies and regions and, as we saw last week, any sudden or sharp moves in financial markets can spill over onto other asset classes. Overall, however, we believe lower oil prices will help economic growth. Consumers should benefit most, as money spent on gasoline and heating costs can be redirected to other areas.

Weekly Top Themes

1.    This week’s Federal Reserve meeting may mark an important shift in tone. Specifically, we expect the Fed could drop the phrase “considerable time” when discussing how long it intends to keep the fed funds rate near zero. This would mark the beginning of a multi-month process of preparing the markets for the first rate hike, which we believe could occur in mid-2015.

2.    Strong retail sales figures act as additional evidence of improving economic growth. Sales climbed 0.7% in November, the strongest gain we have seen in eight months.2 These results should help assuage any concerns about a weak holiday shopping season.

3.    Small business confidence is rising, which should help employment gains. November’s Small Business Optimism Index rose to its highest level since 2007.3Since small businesses typically drive jobs gains during economic expansions, this bodes well for the future of the labor market.

4.    Inflation remains low, and there is little sign that expectations will rise. Despite a months-long trend of economic data that have been exceeding expectations, inflation levels remain subdued. Lower oil prices and a stronger U.S. dollar are helping to keep downward pressure on inflation.

5.    The history of the presidential cycle suggests equities could benefit in 2015. Next year will mark the third year of the presidential cycle. Since 1950, the S&P 500 Index has averaged a 16.5% annual return during those third years.4 In particular, January has been a strong month, showing a 4.3% average return with only one decline during that period.4

Women & Money - Moving from the Moment to the Future (Updated 2014)

Women & Money: Moving from the Moment into the Future

Shifting the focus from the short term to the long term.


Provided by PlanningWorks


How many short-term financial decisions do you make each week? You probably make more than a few.


They may feel routine. They may demand your attention, day in and day out. Yet in managing these day-to-day issues, you may be drawn away from making the long-term money decisions that could prove vital to your financial well-being.


How many long-term financial decisions have you made for yourself? How steadily have you saved and planned for retirement? Have you looked into ideas that may help to lower your taxes or preserve more of the money you have accumulated?


As Nielsen notes, women are the financial decision-makers in their households – they not only make the lion’s share of the nation’s consumer purchasing choices, they also influence or handle many buying decisions on durable goods such as cars and houses. Fleishman-Hillard Inc. forecasts that women will control 2/3 of consumer wealth between now and 2023, and will be predisposed to inherit the bulk of the biggest generational transfer of wealth the U.S. has ever known in the coming decades.1


While many women feel adept at making money decisions for today, some are less confident about making financial decisions for tomorrow. That anxiety may be unwarranted, however.


University of California professor Terry Odean has spent more than 20 years breaking down stock market investing behavior by gender, and believes women are better investors. He has numbers to back this up: as the Washington Post noted, he studied male and female investors over seven years and found that women got 1.4% better overall returns than men did. Across the length of the study, the investment returns achieved by single women exceeded those of single men by 2.3%. Investment groups populated by women got a 4.6% better return versus investment groups made up of men.2


Odean feels that men suffer from overconfidence in investing, while women invest more pragmatically, turning away from opportunistic day trading and taking more of a buy-and-hold approach. A bit controversial, this assertion? Perhaps. The statistics certainly get your attention. The bottom line is that women may be more adept at investing than they think.2


Even if you feel you need more financial or stock market literacy, you may fundamentally have the temperament to be a good long-term investor.


Where do you stand financially? Start by taking an inventory of your investments and savings accounts: their balances, their purposes. Then, take an inventory of income sources: yours, and those of your spouse or family if applicable. Consider also your probable or possible income sources after you retire: Social Security and others.


This is a way to start seeing where you are financially in terms of your progress toward a financially stable retirement and your retirement income. It may also illuminate potential new directions for you:


*The need to save or invest more (especially since parenting or caregiving may interrupt your career and affect your earnings)

*The need for greater income (negotiate for a raise!) or additional income sources down the road

*Risks to income and savings (and the need to plan greater degrees of insulation from them)


Devoting even just an hour of attention to these matters may give you a clear look at your financial potential for tomorrow. Proceed from this step to the next: follow with another hour devoted to a chat with an experienced financial professional.


PlanningWorks may be reached at 512 498-7526 or


Taking Taxes Into Account When Saving & Investing

Taking Taxes Into Account When Saving & Investing

It isn’t always top of mind, but it should be.


Provided by PlanningWorks


How many of us save and invest with an eye on tax implications? Not that many of us, according to a recent survey from Russell Investments (the global asset manager overseeing the Russell 2000). In the opening quarter of 2014, Russell polled financial services professionals and asked them how many of their clients had inquired about tax-sensitive investment strategies. Just 35% of the polled financial professionals reported clients wanting information about them, and just 18% said their clients proactively wanted to discuss the matter.1


Good financial professionals aren’t shy about bringing this up, of course. In the Russell survey, 75% of respondents said that they made tax-managed investments available to their clients.1


When is the ideal time to address tax matters? The end of a year can prompt many investors to think about tax issues. Investors’ biggest concerns may include any sudden changes to tax law. Congress often saves such changes for the eleventh hour. Sometimes they present opportunities, other times unwelcome surprises.


The problem is that your time frame can be pretty short once December rolls around. You can’t always pull off that year-end charitable donation, gift of appreciated securities, or extra retirement plan contribution; sometimes your financial situation or sheer logistics get in the way. It is better to think about these things in July or January, or simply year-round.


While thinking about the tax implications of your investments year-round may seem like a chore, it may save you some money. Your financial services professional can help you stay aware of the tax ramifications of certain financial moves.


Think about taxes as you contribute to your retirement accounts. Do you contribute to a qualified retirement plan at work? In doing so, you can lower your taxable income (and your yearly tax liability). Why? Those contributions are made with pre-tax dollars. In 2014, you can contribute up to $17,500 to a 401(k) or 403(b) account or the federal government’s Thrift Savings Plan. If you are 50 or older this year, you can put in up to $23,000 into these accounts. The same is true for most 457 plans. This can reduce your taxable income and lower your tax bill.2,4


Think about where you want to live when you retire. Certain states have high personal income tax rates affecting wealthy households, and others don’t levy state income tax at all. If you are wealthy and want to retire in a state with higher rates, a Roth IRA may start to look pretty good versus a traditional IRA. Withdrawals from a Roth IRA aren’t taxed (assuming the Roth IRA owner follows IRS rules), because contributions to a Roth are made with after-tax dollars. Distributions you take from a traditional IRA in retirement will be taxed.2


What capital gains tax rate will you face on a particular investment? In 2013, the long-term capital gains tax rate became 20% for high earners, up from 15%. On top of that, the Affordable Care Act Surtax of 3.8% effectively took the long-term capital gains tax rate to 23.8% for investors earning more than $200,000.2,3


Greater capital gains taxes can actually be levied in some cases. Take the case of real estate depreciation. If you sell real property that you have depreciated, part of your gain will be taxed at 25%. The long-term capital gains tax rate for collectibles is 28%. Own any qualified small business stock? If you have owned it for over five years, you typically can exclude 50% of any gains from income, but the other 50% will be taxed at 28%. Lastly, if you sell an asset you’ve held for less than a year, the money you realize from that sale will be taxed at the short-term rate (i.e., regular income), which could be as high as 39.6%.2,3


Are you deducting all you can? The mortgage interest deduction is not always noticed by taxpayers. If a home loan exceeds $1.1 million, interest above that amount may not qualify for a deduction. Itemizing can be a pain, but may bring you more tax savings than you anticipate.2


A tax-sensitive investing approach is always specific to the individual. Therefore, any strategy needs to start with an in-depth discussion with your tax or financial professional.


PlanningWorks may be reached at 512 498-7526 or


Be watching for your Social Security Statement

The Social Security Administration recently announced they will resume the periodic mailing of Social Security Statements – once every five years for most workers. They are also encouraging everyone to create a secure my Social Security account online, to access your statements anytime.

You can create an account at:

To read more, visit:!/post/9-2014-1

If you have any questions or concerns, please reach out to a member of your PlanningWorks team

Why I'm Done with Financial Goals

Why I’m Done with Financial Goals… click to read more!

Tax Efficiency (Updated 2014)

Tax Efficiency

What it means, why it counts.


Provided by PlanningWorks


A little phrase that may mean a big difference. When you read about investing and other financial topics, you occasionally see the phrase “tax efficiency” or a reference to a “tax-sensitive” way of investing. What does that really mean?


The after-tax return vs. the pre-tax return. Everyone wants their investment portfolio to perform well. But it is your after-tax return that really matters. If your portfolio earns you double-digit returns, those returns really aren’t so great if you end up losing 20% or 30% of them to taxes. In periods when the return on your investments is low, tax efficiency takes on even greater importance.


Tax-sensitive tactics. Some methods have emerged that are designed to improve after-tax returns. Money managers commonly consider these strategies when determining whether assets should be bought or sold.


Holding onto assets. One possible method for realizing greater tax efficiency is simply to minimize buying and selling to reduce capital gains taxes. The idea is to pursue long-term gains, instead of seeking short-term gains through a series of steady transactions.


Tax-loss harvesting. This means selling certain securities at a loss to counterbalance capital gains. In this scenario, the capital losses you incur are applied against your capital gains to lower your personal tax liability. Basically, you’re making lemonade out of the lemons in your portfolio.


Assigning investments selectively to tax-deferred and taxable accounts. Here’s a rather basic tactic intended to work over the long run: tax-efficient investments are placed in taxable accounts, and less tax-efficient investments are held in tax-advantaged accounts. Of course, if you have 100% of your investment money in tax-deferred accounts, then this isn’t a consideration.


How tax-efficient is your portfolio? It’s an excellent question, one you should consider. But this brief article shouldn’t be interpreted as tax or investment advice. If you’d like to find out more about tax-sensitive ways to invest, be sure to talk with a qualified financial advisor who can help you explore your options today. What you learn could be eye-opening.


PlanningWorks may be reached at 512 498-7526 or

Should You Reduce Risk Exposure as You Get Older? (Updated 2014)

Should You Reduce Risk Exposure As You Get Older?


A study suggests the “conventional wisdom” may be flawed.


Presented by PlanningWorks


If you move away from equities with age, are you making a mistake? For some time, financial professionals have encouraged investors to lessen their exposure to the stock market as they get older. After all, a 60-year-old has less time to recover from a market downturn than someone decades away from collecting Social Security checks.


Is that conventional thinking flawed? It might be. It isn’t simply a matter of looking at the future; you may also want to look at the past.


What’s the price of playing not to lose? It could be significant – at least in terms of opportunity cost. At this moment, how many people really want to shift money into fixed-rate investments?


Obviously, bonds, CDs and money market accounts will always hold some appeal as they tout protection of principal. Aside from that sense of safety, how does a 1% or 2% return sound? The dawn of the second quarter of 2014 saw rates on 5-year CDs “bounce back” to the neighborhood of 2.25-2.5%, a far cry from the 5-6% yields of previous decades.1


While the Federal Reserve is necessarily winding down its stimulus effort, Janet Yellen and other Fed officials have continued to maintain that interest rates will remain at historic lows well into 2015 and perhaps into 2016. In fact, Yellen recently commented that deflation constitutes a bigger economic hazard to the U.S. than inflation. So the question remains: “When will rates finally rise?” The answer still remains hazy.1,2 


As the Fed and the European Central Bank have been flooding the global economy with cheap money, the tame inflation of the past few years may give way to something greater. Fixed-rate investments are great tools for diversifying a portfolio, but retirees and pre-retirees with significant assets in investments yielding 1-2% will start wincing if inflation gets back to 4-5%.     


The risk appetite of institutional investors seems to be increasing, and individual investors might want to pay attention to the signals. In a survey released in the first weeks of 2014 by the investment management firm BlackRock, roughly 50% of respondents indicated a desire to put money into real estate, while approximately 33% signaled a reduction in cash holdings.3


Is the “glide path” strategy overrated? You may or may not have heard of this term; it refers to a gradual adjustment in asset allocation across an investor’s time horizon. With time, the asset allocation mix within the portfolio includes more fixed-income assets and fewer equities, becoming more conservative. (This is the whole idea behind target date funds.)


A 2012 article in Investment News questioned the glide path approach. Research Affiliates chairman (and former global equity strategist) Rob Arnott looked at a whopping 140 years of bond and stock market returns (1871-2011) and ran model scenarios using three different asset allocation approaches across 41 years of hypothetical retirement saving and investing. The findings?


*“Prudent Polly” saves $1,000 annually and practices “classic glide path investing,” gradually devoting more and more of her portfolio assets to bonds after age 40. This way, she winds up with an average portfolio of $124,460 at age 63 (with a $37,670 standard deviation across assorted 40-year windows).

*“Balanced Burt” also saves $1,000 annually, but he invests it in an unchanging 50/50 mix of equities and bonds across 41 years. He ends up with an average portfolio of $137,870 at age 63. In terms of deviation, his worst-case scenario, 10th percentile outcome and median outcome are all better than Polly’s.

*“Contrary Connie” saves $1,000 annually while  practicing the inverse of the classic glide path strategy – her portfolio tilts more and more toward stocks after age 40. She ends up with an average portfolio of $152,060 at age 63 and her worst-case, median and best-case scenarios all give her more retirement funds than Polly’s.4


As many people haven’t saved enough for retirement to begin with, they more or less have to stay in stocks or other forms of equity investment. Instead of shifting their focus from wealth accumulation to wealth preservation, they need to focus on both. Accepting more risk may be necessary as they seek suitable returns.


PlanningWorks may be reached at 512 498-7526 or

FPA Standard of Care & Code of Ethics

As members of the Financial Planning Association (FPA), we subscribe to this Standard of Care and Code of Ethics.



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