Beth Pinsker CFP®, MarketWatch columnist, and author of My Mother’s Money explains how caring for her mom exposed the gap between “knowing” and “doing” estate/care plans. Only ~30% have wills; even fewer have POAs/health proxies, creating real cash-flow and authorization crises when care starts. She describes the emotional and ethical knots (siblings, guilt) and how illiquid assets/annuity rules and bank hurdles complicate paying caregivers. Takeaways: set POAs/health proxies, add phone legacy contacts, name beneficiaries on all accounts/titles to avoid probate, and use fee-only help when needed. Beth frames inheritances as “Bubby money” spending aligned with a loved one’s values and urges investing in health and lifestyle now.
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Callouts:
Book: My Mother’s Money
National Academy of Elder Law Attorneys
Transcription
Steve Chen (00:00):
Welcome to Boldin Your Money. I’m your host Steve Chen, and today I’m excited to join Beth Pinsker. She is a certified financial planner and a columnist at MarketWatch, and also has recently written a book called My Mother’s Money, A Guide to Financial Caregiving, published by Penguin Random House. So Beth has spent her career helping people make better choices and now is kind of dealing with in our own family. So with that, Beth, welcome to the show. Thanks for joining us.
Beth Pinsker (00:29):
Thanks for having me. I’m glad to be here.
Steve Chen (00:32):
Yeah, no, it’s awesome. So would love to just jump in a little bit about your background. I mean in a couple minutes, how you got here and why are you doing this work?
Beth Pinsker (00:41):
I started working on personal finance out right in the middle of the Great recession. I launched a personal finance website for a OL called Wallet Pop. And before that I was a film critic and entertainment reporter, so it was a big switch for me, but the topics came naturally to me and I was naturally interested in them, and so I just sort of followed the path of what you do when you’re interested in that sort of stuff and ended up getting a CFP and I got the series seven at some point along the way, but you can’t hold that when you’re not at a brokerage. So I don’t currently have that, but I just got really interested in the mechanics of all of this and how it all works together and that works now to inform my journalism and my other writing.
Steve Chen (01:34):
Nice. How long have you had your CFP certification?
Beth Pinsker (01:38):
Since 2018.
Steve Chen (01:40):
Oh, wow. And have you ever practiced, I mean, did you
Beth Pinsker (01:45):
Practice? I have not practiced. I sort of give out general information and help readers. The thing I can do is explain really complex things to people in a way that they can understand. Sometimes the people who understand the numbers and understand the money part of it, can’t explain it in a way that real people can access it. And this book was part of that and the columns that grew out of it, a market watch is the impetus for it was that you can lead people to a checklist, but you can’t make them do the checklist. What’s going to convince them that this stuff is important and that it should be done now rather than sit on their to-do list and never get done. And the idea that 30% of this country has a will and 70% of them do not, and that’s the way that people think of estate planning and they never get to the other documents.
(02:40):
You need a power of attorney or a healthcare proxy or a living will or a trust or any of those things are less prevalent than a will. It’s crazy making for people like us who do this for a living. You really need all those things. So my book was my way of explaining to people through story, my story, my personal story of taking care of my mom and all the things that even though I’m a financial professional, all the things I didn’t know how to do, all the things you learn in books that have no application to real life and you have to navigate your way through this stuff. And my hope is that by telling my story in a way that people can really relate to it would get them to see why things are important and get them to do it. The idea is read this book and you go, oh, now I get it. Now I get why people keep saying I should have a power of attorney. If I don’t have that power of attorney, I’m in deep trouble. And if my mom doesn’t have it and if my sister doesn’t have it and my kids don’t have it, we’re all in a world of pain if something happens. And this writer explained it to me because she went through it and now I don’t have to go through something bad. That’s my hope.
Steve Chen (03:56):
I think hope is good. I would say I feel like, and I’m in this bucket, people can know better. And then there’s the knowing and then there’s the doing. And I think the thing that people have to know is they have to know themselves and how they’re going to act or actually and the self-awareness of what they are actually doing. And yeah, the risk increases over your life. You live longer. It’s like, okay, we’re all headed the same place. It’s more and more every day that goes by. There’s a higher chance something goes sideways and then you’re going to leave a mess for your family. That is really interesting that 70% of people don’t even have a will.
Beth Pinsker (04:38):
That’s the national average. The numbers go up the older you get, by the time you get to be 70, the number of 70 year olds who have a will is greater than the number of 30 year olds that have a will, but it’s still not 50% in most cases. And that’s wealthy people and wealthy people. When the brokerage firms, the fancy ones, when they do surveys, they still find that people with greater than a million dollars don’t have a will of any sort or a trust or any other power of attorney documents. You would think that they would know better. They have advisors, they have lawyers, they have people on their team at that wealth level. You have people that help you with those things or access to them at least, and they’re still not doing it.
Steve Chen (05:28):
Yeah, it’s so interesting. I think this preamble is opening is kind of highlighting so many of the challenges that are out there. So one explaining things in layman’s terms, right? So people understand it. The industry is still full of jargon, even people who are really know what they’re doing. I was looking at Cody Garrett, he’s doing such good work to educate people. And I looked at his LinkedIn post, he’s like 5 29 72 T, there’s all these stuff. It’s like people have no idea
Beth Pinsker (05:57):
They’re talking about. And when it gets down to a caregiving situation, you can put it in very, very real terms. I’m sitting at my mother’s bedside, she’s got caregivers who need to be paid. How do I write out the check? Where’s money coming from? Who? Who’s account is it coming from and who’s signing the paperwork to give it to the person that you have to pay? That’s just a common situation that we are all going to face at some point. And when I was sitting there next to my mother, I realized I’m like, I know better than this. I know that I was supposed to do all of these things, and yet I’m sitting here with her checkbook next to her in the hospital bed with the caregiver standing right there who needs to be paid. And I don’t know whose name goes on the check. I can’t sign my name, she can’t sign her name. What do we do?
Steve Chen (06:46):
And if you don’t have it figured out, you’re writing the check out of your own whatever, and then you got to get them, there’s a cash flow. There’s a very pragmatic kind of cashflow thing that has to get set up and created.
Beth Pinsker (06:56):
So that’s what I was hoping to highlight for people is these are real situations that come up often in life. There’s no book. There was no book until my book. There was no book for me to look at for how to handle these things. And there’s functional issues and there’s moral issues. Can I forge my mom’s name on this check? She’s sitting right here. She’s telling me I can, does that make it okay? And then there’s emotional stuff that comes into play because all the money I was managing for my mother, spending it or not spending it, eventually it becomes my money. And managing and spending somebody else’s money is a lot different than managing and spending your own money emotionally speaking. It’s just different. It feels weird. There’s guilt attached, there’s childhood recriminations, there’s fights with your siblings. There’s all sorts of stuff that comes into play.
Steve Chen (07:58):
Oh, right, exactly. I thought I was going to bring that up. I think in a lot of families, do you have siblings?
Beth Pinsker (08:02):
I have a sibling. And we get along and it’s still hard.
Steve Chen (08:06):
Yeah, it’s still hard. And it’s like very often people don’t always get along or they have different means and they have different needs and then some people are leaning in and doing it and other people are not doing it. And how do you keep that fair? How do you keep the decision making fair? We’ve had this idea of, I had this idea of maybe there’s needs to be boards, especially as the money gets bigger. So it’s like, hey, you and your sibling plus a third party, independent third party are going to make this decision. So it’s not like one person’s doing things. And
Beth Pinsker (08:35):
Sometimes people don’t like their parents either. People don’t have perfect families. And the people I interviewed for the books, I was so surprised. Often I loved my mom and my mom was a great person and we were lucky that way, but it wouldn’t have mattered if she was a horrible person and I hated her. I still would’ve ended up her caretaker. And so many people I talked to in the book had terrible relationships with their parents, and yet you end up in this caregiving role nonetheless, and it’s very hard to say no to it. You can put parameters on it and build your boundaries, but it’s really hard morally and to say no.
Steve Chen (09:12):
Yeah. Do you have any data on the number of people that get involved in caregiving? Everyone’s living longer.
Beth Pinsker (09:21):
Oh yeah. A RP does an annual survey and it’s 63 million people currently in the United States who are involved in caregiving duties on a steady basis. And at some point, the other is it 70% of us, each individual, 70% of us will end up with some sort of caretaking need. You have a 70% chance of ending up needing somebody to help you at some point. So this goes both ways. You have to be prepared to take care of somebody else and you have to make your life accessible for somebody to take care of you.
Steve Chen (10:00):
So there’s like 20% of the US population now 63 million out of 300 something, 30 million US people is involved in caregiving today, and I imagine the number’s probably growing pretty fast.
Beth Pinsker (10:14):
I actually had to break into the book and update the stats. The book was locked down and a RP came out with that study. They do it every year, and so they updated it and I was like calling the publisher and saying, can I break into the book and update this because the numbers jumped a lot and they let me update it, but it’ll change again next year.
Steve Chen (10:35):
Yeah, I mean for sure you have these generations now, it’s much more common that people know someone that’s over 90, over a hundred, and then you could have whatever, four generations alive at once, which is, that’s more common
Beth Pinsker (10:52):
Club sandwich generation. Somebody in my work came up with that. You have kids, a parent and a grandparent that you’re taking care of because your parents at that point also need help and they can’t take care of their parents. And so you get stuck with all of them. Your grandparent is a hundred, your parent is 80 and your child is 16.
Steve Chen (11:15):
I think what’s so interesting is that when you raise children, we’re like, okay, we raise our kids till they’re 18 or 21 or now it’s like you support ’em until they’re 25 or whatever. We’re extending these time periods of our lives, but there’s kind of an ending point for your kids, but at the same time, you’re going to be inheriting your parents. And that could be 20 years. I mean it probably not, but depends if someone starts needing help in their seventies, which depends on their health situation and they live to mid nineties, that’s 20 years.
Beth Pinsker (11:56):
Yeah. I speak to a lot of people who are in the, well, a lot of your audiences is sort of do it yourself, people who manage their own finances and they’re very careful with it. You talk to people in the financial independence, retire early movement, they’re very concentrated on and fixated on their own plan like, I’m going to do this and this and my money’s going to grow to this point, and then I can retire and then I’ll live off this income. And if that works for you in a bubble, but you’re connected to other people and if they haven’t taken the same care with their resources, your whole plan gets blown up. You can map out with whatever software you want, you can map it all out for you. But what happens if a parent gets sick, not even your parent, it could be your spouse’s parent, it could be an aunt and uncle and they get sick and then you’re on call.
(12:57):
I think that the thing that would probably interest your audience the most is I go through this whole section in the book. There are four sections in the book and one whole section is on how to make the money last. And you do that for yourself. You plan your retirement, you do all your projections and all of that. And we get letters from readers over and over again. Every permutation of the scenario. My mom just got diagnosed with Alzheimer’s, she has $500,000. How do we most effectively make the money last and pay the least amount of taxes on it, get the most amount of growth, and what do we do if it runs out? That’s the scenario that every single person who talks to us wants to know about. So what do you tell people in that search? What’s your plan for that?
Steve Chen (13:47):
I mean, it’s such a good question. I mean, for sure, we’ve been seeing this need for intergenerational planning and I think what you’re describing with the fire folks, I’ve hung out with the fire folks a lot. It’s great. These people are super intentional, they’re literate and they do all these good things and they do get to financial independence. And yes, it’s way easier if you have no kids. It’s like, yeah, too high income earners, no kids, no problem. We’re good right then. Yeah, your parents, well, whatever, they’re on their own. But yeah, no, you definitely start thinking about your parents as another obligation and it’s real. And most people aren’t making those good choices and they have much tougher situations as we’re talking. It’s like I’m writing this. I’m like, all right, a good practice to have an investment policy statement for your family. You could have a caregiving policy statement.
(14:30):
You know what? We need to think about what we’re signing up for with our kids. You kind of talk to your kids about it. Hey, I have friends. It’s like, guess what? You graduate. We’re going to subsidize your education for a hundred grand and after that you’re on your own. Good luck and don’t come back. And I have friends that have done that nonetheless. They’re my generation. They were told by their parents like, great, we helped you with college, but now don’t plan on moving back in here. You got to make it work. That’s less prevalent now, but with the caregiving, it’s like, okay, here’s what our commitments are and discuss it because you kind know what’s out there and it kind of sneaks up on you and then you’re like, okay, well this is happening to my parents. It’s like, okay, they’re both alive. Yay. They’re both living independently. Yay. And they’ve done that for a long time and they’re pretty healthy, knock on wood. But you can ride it out in your house, but it gets harder. Stairs, bathrooms, all this stairs and bathrooms seem to be coming up in discussions. More single level living comes up. But yeah, what’s the plan? And then different people live longer. What’s the plan if one partner goes away and families are distributed? I mean, if you’re all in the same place, easier, but if you’re not, all these things have to be thought through.
Beth Pinsker (15:47):
One person read an early copy of my book and they were like, I didn’t understand. Wait, what are you talking about? This whole thing about one social security. She didn’t understand that you have two people living together and they have two each have their social security. And when one dies, you go down to one social security income and you get to pick the larger of the two if you’re married. But it’s still just one of those two checks, and that’s a huge, if you don’t know that’s coming, that’s a huge whopper,
Steve Chen (16:21):
Right? Well, that’s the kind of stuff that you can see in our software and you can build scenarios. Or the bigger thing is someone has a monster pension with nose, joint and survivor benefit.
(16:33):
They’re like, I’m good. I’ve got a great pension. And that’s tied to the husband, but the husband dies first and there’s not a great benefit. Then actually that was a huge income thing, which is quality of life and your wife is hosed, right? Or your spouse is hosed. So yeah, it’s kind of happening now as we speak. I feel like so many families are, and I see this in our business too, there’s people, one of our senior guys right now is back with his parents. We’re in their nineties and I’ve had this happen. There was a guy, he was in his thirties and his parents were in his seventies. He was like, guess what? I’m schlepping him around to medical stuff. I’m sitting in counseling sessions and talking to doctors. You’re thrust into it and it crowds out so much other stuff. And that’s happening for 20% of our population in every business,
Beth Pinsker (17:24):
Every business. It’s a huge concern and it’s really hard to off lay some of this stuff. And it’s hardest to lay the financial stuff with my mom. We were able to handle hire caregivers to cover the bathroom needs. I didn’t have to be there every day to help my mom go to the bathroom and shower, but we couldn’t. You can hire people to do the financial management, but some of the financial tasks and decision making, you still need to be the, not even necessarily next of kin, but you have to be a trusted confidant of that person. And these were intimate, irrevocable financial decisions that somebody’s going to make. They’re going to have access to your bank account. They can take money out, and you have to be able to trust them. You need to be able to know that they’re acting in your best interest and you’re not going to sell the house out from under you or away all the money.
Steve Chen (18:25):
To me, a lot of this is back to how businesses run it. We’ve got 60 people in our company and we have different people with different levels of control, but you have signing authority and there’s certain people that can look at money and there’s certain people that can sign for chime checks, and it’s like some of the stuff that we’re talking about, there are care concierges out there that can help with all this stuff. And so what happens though is you’re like, okay, we haven’t thought about this. Oh, someone falls. Okay, now we’re in it. Okay. And that’s like when our kids were younger, we would joke about, we’re the most expensive Uber drivers, parents are in my day job. I’m a fucking SVP Google, and then I spend two hours a day drive my kids to soccer practice and my time is worth 5,000 or whatever volleyball thousand an hour, but whatever.
(19:09):
That’s, and you should do that as a parent, but there’s a balance. And now by the way, with Waymo teen mode, you’re going to be able to order robotic cars to drive your kids around. That’s happening. I feel like there are experts out there, and it feels like that’s going to become a huge industry where it’s like, okay, guess what? Call somebody. They have the right level of control. They understand how playbook, how to run the playbook, and they help figure this all out and help you make decisions and whatever. And that’ll be pretty valuable for society. So maybe it’s a workplace benefit. Well,
Beth Pinsker (19:47):
Yeah, hopefully some help comes along, but then you still end up, at the end of the day, somebody’s got to be the named representative. And I’m going through this now with a friend who’s trying to get the power of attorney in force for his parents. And there’s six different banks involved that he’s got to get this paperwork to, and they’re making him jump through the most extreme hoops in order to be verified to be the representative on the account. And it’s just torture. So you can have a financial advisor telling you what to do, but at the end of the day, you might be making those phone calls. You might be on hold with a bank trying to talk them through why they should accept your document. One, we sent the same documents to all the places and one rejected it. It wasn’t the original. Do we need six fully notarized original copies of the power of attorney? Nobody has that.
Steve Chen (20:52):
It’s tough because on the one hand, the banks are like, well, you have to know your customer, KYC, anti-money fraud and all that stuff you don’t want. This is such an area where people can come in and be like, yeah, I’m the caregiver. Give me control. And then they drain the account. There’s that. So that’s good. But there’s also banks make lots of money holding your money, and they know that people will move money around and simplify it and rationalize it. And so having friction is fine. Sure. The manager there is getting the phone call. Well, and older people have a lot of money. Oh, they might move 200 grand out of the bank. Well, that’s not really good for me. So I think it’s something to be aware of. Okay, interesting. Yeah. So yeah, in terms of your own story, I’m just curious the story arc in terms of were you planning for this, when did, did the need of arise? How long were you living? Is your mom still alive or does she pass away?
Beth Pinsker (21:57):
She passed away for us, the trajectory was very short and very intense. My mom was 76. She was living her own life. She was perfectly happy. She was treasurer of her condo board. She was an active person, but she was having back trouble and she had lifelong back trouble and she went in for a spinal fusion operation to try to maintain her ability to walk. So she called me up, I get that call. So the story starts with me getting that phone call like, Hey, I’m going in for this surgery. Can you come down here? I don’t know how long I’ll be incapacitated, but it’ll be a couple of weeks. So can you come and make sure we have everything set up and take over the reins for me for as long as need be? And so I went down there thinking it would be a couple of days, whatever, she would be fine.
(22:55):
Her brain functioned perfectly and everything would be good. And from there it was just complication after complication after complication. And from November until July, she was just rolling waves of sickness. So I ended up fully taking over all of her financials, the long-term care insurance, the Medicare, the decisions about where she would go and what facility she would be in and how much the caregivers would cost and what we can afford and how would we manage her nest egg through all of that. Then she went home finally on hospice, didn’t make it very much past that and then started the process. The second half of the book is me settling her estate, which is its whole separate ball game that nobody prepares you for, but that all of this stuff is important to do ahead of time so that it’s not so bad when somebody’s trying to settle your estate.
(23:55):
So I went through, from the time she had surgery to the time I filed her last tax return was just like a little over a year. And so I was able to tell it as a story in the book because some people go through this stuff for decades. If a person in your life has Alzheimer’s or some other dementia disease, it could be regularly 10, 12 years of this. And that would be hard to tell as a story coherently. But mine was just like this. And some people, they get the call and it’s a car accident or a heart attack or something, and it’s just immediate and all of them are bad. There’s no better outcome than one or the other. But mine took about a little over a year and I was the financial caretaker. My brother was the one who dealt with the doctors.
(24:49):
I hated dealing with the doctors. I couldn’t. And so he did that and I did the bills and that was sort of our split of labor. And we had caregivers to do the bathroom and that was how we got through it. But as I was going through it, I started to write about it because my job is I’m a retirement columnist and this is what this is all about. And it just really struck a chord with people. There’s so many people going through this, and it occurred to me that most of what is out there for people is piecemeal. You have a problem, you google it and you get a piece of information and you get them one at a time as you go through it. And nobody ever tells you how all the pieces fit together and why all the pieces fit together and why it all works this way. And so this was my attempt to do that because I felt like there was missing this unified string theory of financial planning.
Steve Chen (25:57):
No, that’s awesome. Well, and good job going through that whole process and writing it down and sharing it.
Beth Pinsker (26:02):
Thank you. My mom was very careful with her finances and I felt like I needed to respect that When I was growing up. We got audited three times. My father was a college professor and he would take sabbaticals every couple of years. And so he would take a huge cut in salary and go live somewhere else for a year and he would get a grant and there would be all these expenses. And when we’d come back and my mom would file taxes, then we’d get a letter from the IRS. And this was my whole life. This is why I’m in financial journalism, I think is because my whole life was my mom fighting with the IRS. And this became the underpinning of everything in our household was my dad would go buy a book and my mom would say, do you have a receipt for that? And it would go into the receipt bin for his business expenses. And this is how we lived. I mean, my mom kept track of everything and she never lost an audit. And you try taking care of that person’s finances. Are you going to mess it up? No, I was terrified of it of her
Steve Chen (27:19):
Had to live up to the standard. Were your parents good investors?
Beth Pinsker (27:23):
My parents were terrible investors. We also never had any money. And I go through this in the book too because they were both teachers and all of their money was annuitized and they had no savings. And so the way this impacted me as a caregiver is we need to put our hands on money and fast. And I couldn’t, it was all locked up in annuity contracts because that’s how in 4 0 3 Bs, that’s how the advisors steer you into these products, and teachers are generally conservative and that’s where their money went and that’s where they kept it and they were happy with that situation. My mom was a conservative person and with her money and that that’s what she wanted. She wanted a guaranteed rate on her money. She didn’t want to be worrying about the stock market and that worked for her until she got sick.
Steve Chen (28:25):
And then how did it play out? I’m just curious on the other side of this for, because obviously it’s 4 0 1 Ks, there’s 4 0 3 Bs is four 50 sevens, and yeah, people invest this way. What happened with your, when did your dad,
Beth Pinsker (28:39):
My dad died in 2018 and they didn’t have very much before he died. And the nest egg that they ended up having was from death benefits after he died. So the majority of my mother’s money came after my father died.
Steve Chen (28:55):
Your dad had an annuity.
Beth Pinsker (28:57):
My dad had annuity that had a death benefit rider that I will say this about, that advisor that helped him with all of this who really cared and was a good guy. I’m not saying anything negative about that. He got some sort of death benefit attached to my dad’s annuity product. That was a phenomenal death benefit and really secured my mom’s financial future. It wasn’t life insurance because my dad also had a nice life insurance policy, but these things really helped my mother. They allowed her financial flexibility and freedom.
Steve Chen (29:35):
So your father’s income ends, but there’s a death benefit so that a pile of money and I guess was that tax free?
Beth Pinsker (29:45):
That was tax free? It was pre-tax money. It was an IRA. It was, this is complex stuff I go into in the book. It was an annuity, but it was not annuitized, so she had to take RMDs from it as if it were an IRA.
Steve Chen (29:59):
So your father died but he had not started annuitizing. So he had been saving money in this vehicle, but there was a value to the vehicle?
Beth Pinsker (30:08):
Yes. So there was a value created, there’s a value created for RMD purposes. At the end of the year there’s a net present value of the annuity contract and RMD is based on that. And so by the end of the year you have to take the RMD out, but the money was not annuitized. And since my mom’s illness fell right in this five year contract period after my father died, the money goes into a contract for my mom. She kept it in a similar contract but a new one in her name. And because we hadn’t reached five years yet, if we started breaking into it and taking money out beyond the rmd, then there were going to be, she was going to lose value on the contract and the advisor was trying to prevent us from losing any principal value by breaking into it a couple months early.
(31:01):
But my mom was dying. I’m like, we need this money now. We have to pay Gary. It’s July. I have money for the next two months, and then you’re telling me I have to wait till October, but I can’t wait till October. The caregivers cost $15,000. I need $15,000. And so we went back and forth a couple of times and then my mom just got too sick and Jen ended up passing away before her cash on hand ran out. That was just our particular situation. If she had lasted, Jimmy Carter lasted a year or more in hospice. If my mom had rebounded a little bit or had even lasted six months, we would have needed to break into that money and we would have, it would’ve been worth the penalty to not have to take it to my account. I would’ve had to liquidate stuff in order to cover that amount of cash. I don’t have 15,000 sitting around.
Steve Chen (32:04):
Right. Okay. So I’m just super curious how this unfolded. So your parents working and saving, they’re building value in these vehicles that are a little bit not liquid, and then money flows to your mom. Sorry to dive into these a little. And then she’s subject to RMDs, and I know there’s rules about RMDs, like inherited IRAs. By the way. Our software does help people think about all this stuff and see all that stuff. Then she’s getting sick and then there’s her own annuity situation and then that’s all ultimately making its way to you. And I would say net. Do you feel satisfied like, oh, my parents worked hard. They saved, they didn’t live as long as they might like to enjoy the money, but thankfully we get our family’s going to inherit that money. Is that
Beth Pinsker (32:51):
It’s a lot more guilty than that. I go into this in the book too. I’m real open about it. No, I feel guilty about that. My mother had that money for her own care. It wasn’t intended for gifting. It was just enough to take care of her until her nineties. If she had lived any longer, that would’ve been a sufficient amount and we wouldn’t have had to worry and she wouldn’t have had to struggle and she would’ve maintained her standard of living and she was 76, which is young to lose somebody these days. And my father was five years older than her. He also died at 76. So both my parents died young and it’s really hard. I don’t know, it’s hard for me to fathom inheriting money in that situation. I’d much rather have them. So I’m still in that mindset of the money still almost, I don’t know want to say it feels dirty, but I can’t look at that money without feeling lost.
(33:51):
And so that’s why, I mean, I titled the book the way I did because my mother’s money becomes my money at some point and it’s not easy, any of it. And sometimes people get into, I’ve heard about family fines, I wrote about some of them in the book and one sibling wants to keep mom at home, but that’s the more expensive option. And one sibling wants to put, mom frees up the assets in a trust and put mom on Medicare Medicaid and put her in a nursing home and the one sibling is accusing the other of wanting just to take the money. So you go through all this, am I being frugal in order to inherit more or am I being frugal because that’s the right thing to do.
(34:45):
It’s very complex when you have to, we’re used to money decisions being rational. Your software computes numbers. It doesn’t compute emotions. And what I found is I have all this financial training and I know how to do the equations, but the equations in real life are often not what’s the best scenario? I have three options the computer can tell me, which is cheapest, but the computer can’t tell me which is the best moral option, which is the best. And most of the time all the options are bad. There is no best option. They all suck.
Steve Chen (35:31):
Well, if so, it’s like we’re moving from this. For some people, this world of this didn’t used to be a problem. You’re kind of like a hundred years ago you worked and then you died and then there wasn’t a lot left and your kids were kind of scraping by and whatever. There wasn’t a lot of caregiving because people just didn’t live long. Social security, Medicare, all this stuff was designed for people to live like to 65.
Beth Pinsker (35:55):
There wasn’t a lot of legal rigmarole after somebody died, either closing out somebody’s life and turning out the lights wasn’t that hard. Years ago
Steve Chen (36:07):
It wasn’t complex, but now where there’s 80 trillion piled up by people like your parents, good for them. And so on the one hand it’s like, okay, a lot of that could be used for their, hopefully will be used for their caregiving. I think also people, there’s this whole other thing of how do you want to live? There’s this whole dial with zero. A lot of our users are going to have all their money, their maximum wealth in their nineties. Well, for a lot of folks it’s like actually use the money, enjoy yourself, really value your human capital. I think this is Azu Wells who’s one of our top folks that we work with partners, and he talks about this. He’s like, by 65, 68, there’s this massive chance you’re going to, as a male especially, you’re going to have this medical thing that’s going to prohibit you from really fully embracing your life.
(37:00):
And so you need to be not thinking 90, you need to be thinking depending on your health, use your time and spend your money. But now we have this problem or good problem, but really complex problem of with all these dynamics of a big pile of money, siblings that think differently, parents that have different levels of healthcare, and how do we make this easy and not to complicated, help people look into their future, their parents’ future and their own future and make these decisions about how they want to live their lives. Right before it just happened for them, which is what happens. It’s like it happened. I got the phone call. Here it is now, deal with it.
Beth Pinsker (37:42):
Yeah, it’s a problem that doesn’t lend itself to spreadsheets, that sort of thing. That’s a family conversation that’s about your values and what you hold important. And that’s part of money too.
Steve Chen (37:57):
Yeah. Well, this is where I think financial advice and coaching is going. The basic blocking and tackling of trading and portfolio management, that’s commoditized, right?
Beth Pinsker (38:11):
Yeah.
Steve Chen (38:12):
The job is help people see where they’re today, what’s likely to happen, think about it in advance, pre-negotiate this kind of stuff so that there’s way less conflict and way more alignment and prep it all up so it’s lower friction and just make those choices be much more intentional with human capital and your money. Another big thing that’s happening with millennials is they’re pressing mom and dad for Give me money for the down payment, probably Gen Z too, which is fair. Don’t take it all with you. Why not help your, we’re having your, we’re having kids, you have grandchildren, and we could have a better life if we could buy a house now, right?
Beth Pinsker (38:58):
Yeah. I’m working on a story right now on whether people should consider as part of their retirement decision making process, if they should work till their kids are 26 to keep them on their health plan. Should that be part of your retirement decision? Because
Steve Chen (39:17):
I’m sure it’s for my
Beth Pinsker (39:18):
People. I think about that all the time because the way the age that people have kids now you’re bumping up against that
Steve Chen (39:26):
For sure.
Beth Pinsker (39:28):
It didn’t occur to my parents. First of all. There was no mandate for 26 back then and they had kids young. I had kids older. And so if I want to think about retiring at 26, it means they have to be launched enough to have their own health plans. And I don’t know that society is set up for them to be that launched by that age. Well, it’s
Steve Chen (39:56):
Changing. Yeah, for sure. I mean, there’s so much data about kids boomeranging now. A huge percentage of adult children move back in the house at some point, and I think many of us experience that. I definitely think about this. I want to keep the house we raised our kids in so that we can be kind of like a home base for people if necessary. But that comes with costs and everything else versus downsizing and stuff. I mean, we still have kids in high school and stuff like that. So for your own life, I’m just curious, did your inheritance change your life and your perspective on your own work and how you think about your life?
Beth Pinsker (40:33):
No. I mean the inheritance was not life-changing sort of situation, but the lessons I learned from it did hit home all those points about live the life you want to live and do the things that you want to do sooner rather than later. I mean, the fact that that bubble, both my parents died at 76, that’s not that far away for me, and that really is terrifying, to be honest with you. I want more time than that. So right now I have the same back condition that my mother had and right now I’m like, my prevailing thing is I don’t want to end off in the same health condition as she did. I need to be healthier than that so that I can enjoy my life and the health part of that. It’s not about money for that, it’s about lifestyle. And so I really focused on that.
(41:31):
But also my parents, I will say this, they both died at 76, but they lived the hell out of their lives. They did not exactly what they wanted to do and made no compromises to anybody. Anybody who knew, my father knew that he did not care about what anybody thought and just did exactly what he wanted to do and pursued his own intellectual pursuits was that sounds wild. But he liked to read books about literary theory. He wasn’t going off on mountain climbing or anything like that, but he never had answered anybody and he never had to do anything he didn’t want to do. And to me that was the greatest lesson in life. I want to live like that.
Steve Chen (42:15):
Yeah, that’s awesome. I, our human capital is our scarcest resource and we control it and yet we treat it as the least valuable asset. I think for many of us do. I mean, look, we’re investing it. I think most people kind of live their life. They’re trying to take care of other people, their kids, their parents, and then be smart about their own stuff. But yeah, I appreciate that you appreciate the importance of lifestyle and healthcare and health span. I think a lot of people really trying to emphasize that we have to invest in ourselves, work out, eat healthy, all that, try not to have heart attacks and heal over.
Beth Pinsker (42:53):
I don’t want to give away the end of the book, but the conclusion I come to is that any money, my mom liked us to be happy. My mom liked to give us treats, whether they were, she was a baker and a cook, and so some of the treats were food related, but she liked to treat us and do nice things. And so the money that I have from both my parents, I call bubby money bubby is Yiddish for grandmother. Anytime that we do something a little bit extra, we call that, I’m like, don’t worry about the cost. It’s bubby money. So I buy a pair of shoes that’s more expensive than I would normally buy. That’s bubby money. Sending the kids to college is bub money. Anything that makes anything we do that makes somebody smile, that’s bubby money.
Steve Chen (43:46):
That’s awesome.
Beth Pinsker (43:47):
Yeah.
Steve Chen (43:47):
Well, I think that your parents would want that for you and their grandchildren, right? Your children, so that’s a good thing. I think they’d be psyched that that’s their hard work resulted in this and hopefully, and it sounds like your family appreciates it, which is good too. I think that’s another big thing is people need to understand their family histories and the sacrifices that people make to don’t take it for granted. And by the way, just one comment. It feels like there’s so much data in here, but this big wealth transfer, it’s really concentrated at the higher end. It’s like, no, there’s a amount of money. Well, certain people are going to inherit a ton of it and their trust fund kids, this trust fund idea is going to become a bigger thing, and then you’re going to see more trust fund kids and then there’s a bunch of people, or it’ll be your situation where it’s like, okay, it’s helpful, but it sounds like it’s not nothing. If it’s helping with education and stuff like that, it makes a difference.
Beth Pinsker (44:43):
I was already living the life I wanted to live anyway, so I don’t need to change anything because I was already doing what I wanted to be doing, but that was already the lesson my parents had given me anyway. I grew up in a household where people were led to do the things they wanted to do, and so I didn’t have to cut loose and go crazy because I was already doing exactly what I wanted to do
Steve Chen (45:11):
Already living the dream. That’s good. If you were to step back and say, okay, what are some practical things that people should consider or do like now?
Beth Pinsker (45:24):
Make sure everybody you care about, including yourself as a power of attorney and a healthcare proxy, really easy to do. Make sure that your phone has a legacy contact named so that somebody can get into your phone and make sure that you have some sort of plan for all of your stuff. If you die, something will a trust.
Steve Chen (45:48):
Oh, will all the estate plan stuff.
Beth Pinsker (45:51):
If you have a house, that house needs a plan. A house doesn’t necessarily need a will or a trust, but it needs a beneficiary deed or whatever. Your state allows you to have homestead exemption, whatever that is. All of your bank accounts need beneficiaries. You want to avoid probate as much as possible and pass the assets seamlessly so that people don’t get stuck with them. I talked to a guy for my book who, financial professional tax expert, his mom died, she passed the house to him at a will and it took a year for him to get the clearance to sell the house, so he’s sitting on that house for a year paying all the bills on it before he can put it on the market. That’s a problem you’re sticking somebody with. Don’t stick somebody with that problem.
Steve Chen (46:43):
Are there any services that you used, and I mean, I know the guys at Trust and Will. There’s all these different estate planning tools that are out there. Did you find things that were useful?
Beth Pinsker (46:54):
I have resources in my book. I don’t like to name specific ones just because I’m a journalist and we don’t endorse anything. There’s plenty of help out there. There’s lawyers you can find, there’s financial advisors. I send people generally to the professional organizations for these things like the National Academy of Elder Law Attorneys, which is NLA org or NAPFA for fee only. Financial planners or even the Ccfp board. You want a fee only, hopefully an hourly rate instead of 1% of all your assets, but you’re going to end up needing a lawyer. Somebody along the way is going to need a lawyer at some point. Financial advisor’s help. A lot of this you can do on a lot of the financial stuff you can do on your own.
Steve Chen (47:49):
Did you do most of it yourself or did you have an outside advisor helping you?
Beth Pinsker (47:53):
I did it all myself.
Steve Chen (47:54):
You did it all yourself? Yeah.
Beth Pinsker (47:56):
The key question for my mom was just managing, just making sure that the money would last and I have a financial calculator. I know how to use it. I would say that that is the number one thing that gave me peace of mind is being able to run those numbers. And I know you guys have a way of doing that. I give away in the book to run those numbers, not addition and subtraction. It’s way more complicated than that, and you need some kind of calculator that can run multiple scenarios and do growth at the same time. You’re taking out money is the thing. I always knew that she would be fine. I always knew that there would be enough money, so I didn’t panic. She panicked. She was like, this is costing so much money, we can’t afford this. I’m like, wait, you know what? We can’t afford this and you’re okay.
Steve Chen (48:51):
I think so many people need to hear that message. They can’t appreciate it. It’s hard for them.
Beth Pinsker (48:55):
Yeah, it’s really hard. And when it comes, people don’t like to sell houses or cars or anything like that, but when your loved one is at the point where they need to go into a facility and they’re not coming back out, you can sell the house.
Steve Chen (49:08):
Yeah, a hundred percent. Okay. Well this is great, Beth. This is super helpful. I think this story will resonate. It’s actually hearing it. It’s awesome to hear it in your words and kind of what you went through, and hopefully people, I think absorb the lesson and then also get the level of support they need. I mean, I think on our side, we see this problem. We see intergenerational planning happen happening. We also know that some people are DIY. Some people need coaching and support, and some people just want to outsource it. So we’re trying to think about and head in this direction of being able to offer people this level of support. And I think the important thing is people themselves need to recognize themselves. Like myself, I know there there’s always things, I’m always learning and there’s things that I do, and then there’s things that haven’t happened and should happen and I’m in this space, and so the data that you shared, 70% of people don’t have wills, and then the more advanced POA, all this other stuff, like people aren’t there and they need to get there. It’s a huge opportunity for the industry in general. Any final thoughts for the audience out here?
Beth Pinsker (50:26):
I answer questions on my website, so if there’s anything else you want to ask, it’s beth pinsker.com and you can submit a question and I will either answer them on the website or in my MarketWatch column, and I’m hoping I’m an ongoing dialogue with people and help people as they find the book and find me to be able to guide them to the right places.
Steve Chen (50:51):
Okay, maybe you should go on YouTube and become a YouTube. That’s not for me. I don’t need that infrastructure. You’d be surprised at, I meet so many people that have interesting things to say and then they get they’re authentic people and sharing their stories and that builds trust and credibility. But alright, well, Beth, thanks for joining us. This was great. And for everyone listening, definitely beth pinsker.com. You can also, we’ll put a link to her book, my Mother’s Money, A Guide to Financial Caregiving, and all reviews of this are welcome also, hopefully you check out Beth’s work at MarketWatch as well. So with that, thanks for listening and Beth, thanks very much for joining and sharing your story.
Beth Pinsker (51:38):
Thank you.