The Tao of Wealth Management

I’m excited to share today’s article. It reflects an investment philosophy supported by historical asset class returns, but puts it in terms of basic understandable action. The article is written by Jim Parker, a Vice President of a subsidiary of Dimensional Fund Advisors.

The Tao of Wealth Management

We at Maxima Wealth Management employ Dimensional Fund Advisors’ investment philosophy. You can read more at

Given the possible complex issues that can arise when determining your investment plan and then sticking with it, it might be best for you to meet with a financial advisor. A financial advisor can assist you in establishing the best strategy for your situation.

If you need a financial advisor or know someone who would benefit from one, please send them my contact information along with this blog.

2020 Recap – The GOOD

Happy New Year! I hope you and your family/friends were able to make the most of our situation known as “2020” to include the holiday season.

At the risk of sounding cliché, the year 2020 will be remembered throughout history as one of the most unpredictable and challenging years of most people’s lives. Thanks to the unending “Breaking News” and Social Media we are very much aware of all the “bad” that is 2020. For this reason, I wanted to focus my 2020 Recap on some of the “GOOD” and a reminder of our time-tested core investing principles through lessons learned from 2020.



  • Strong stock market returns – March showed us the fastest bear market experienced in history when the S&P 500 dropped 34% from its all-time highs in 23 days. In the past this kind of decline took on an average of 11 months to occur. But the GOOD is it took just 4 months for the market to increase to new highs making it the fastest recovery on record from a bear market.  As of December 30, the S&P 500 was up 17.63% for the year.1
  • Largest rise in 3rd quarter GDP – The economic result of the reopening of the economy saw the largest growth in gross domestic production (GDP) for the 3rd quarter in 2020. This equated to 33% annualized. A reminder here is that the U.S. economy is driven by services and consumers.2
  • Federal Reserve immediate action – Lessons learned from the ‘08/’09 financial crisis led to the Federal Reserve’s (Fed) immediate action geared towards providing liquidity and funding to consumers and businesses alike. This was done by dropping “policy rates” and implementing its full range of tools. Per Chairman Powell, the Fed is “not even thinking about raising rates,” suggesting that rates will stay low for at least a couple years.3
  • Low-interest rate environment – Low-interest rates drive investors to the stock market looking for returns. Additionally, this environment dropped the average rate on the 30-year fixed mortgage below 3%, giving homeowners an opportunity to refinance as well as increasing the overall housing market.

Broad Range of Subjects:

  • COVID-19 Vaccines – In January, Chinese scientists shared the genetic code of this new unknown virus with the world and the race was on to develop a vaccine. What was developed was a totally new kind of vaccine using Messenger RNA (mRNA). The mRNA vaccines from Moderna and Pfizer were developed, trialed and approved in record time of less than 12 months and with an effective rate of over 94%.4
  • Creativity/Entrepreneurship – Given the required quarantine, many people and businesses took to new ways of communicating and conducting business. Zoom and FaceTime calls replaced the traditional Happy Hour/Sunday Brunch and even wedding ceremonies. Advances were made in telehealth, remote work and other virtual work gatherings that may continue even after the pandemic. In an effort to get out of the house, many of us took advantage of outdoor activities causing crowded hiking trails and bike sales through the roof.  Pop-up events empowered entrepreneurs. They provided us an inventive way to go to the movies and see local concerts creating a sense of community even in the big cities.
  • SpaceX – On May 30, 2020 SpaceX launched 2 United States astronauts to the International Space Station on a U.S.-made rocket for the first time in nearly a decade. This marked the potential of a more cost-efficient space travel program reducing/eliminating our dependence on Russian technology. 5
  • Carbon Emissions – As reported by CNBC, the quarantine caused a significant decrease in transportation activity directly impacting carbon dioxide emissions. The U.S. experienced the largest decline at 12%. Another factor is the decrease in cost of renewable energy sources which has declined quicker than expected. 6

Investing Lessons Learned

Even in a year like 2020, our investing principles held true when navigating the uncertainty experienced in the markets. At Maxima Wealth Management our investment approach is called Structured Asset Allocation. The principal theories of Structured Asset Allocation are not new. They are time-tested and supported by decades of empirical research. Below are five principles reinforced from what we experienced in 2020.

  • Long-term view – Your personal financial goals/objectives should determine your investment decisions for the long-haul, not the day-to-day headlines. Focusing on this helps keep you invested during times of uncertainty.
  • Disciplined approach – Sticking to your plan and honoring your personal risk tolerance and time horizon ensures a disciplined approach. Monitoring the structure of your portfolio and reallocating over the course of the year can help properly position portfolios.
  • Market volatility opportunities – History shows us that extreme volatility doesn’t last long and is followed by positive returns. This can provide long-term investment opportunities to buy quality companies at lower prices.
  • Diversification – Being properly diversified can stabilize a portfolio and this still holds true. Holdings in bonds/bond mutual funds provided a less volatile portfolio.
  • Leading indicator – Stock markets are forward looking and provide an indication of what is expected in the future economic environment. Keep in mind this could be a short-term look and one should take a long-term perspective aligned with your personal financial goals/objectives.

Maxima Wealth Management

A big welcome to our new clients. We are excited you joined our team and will continue striving to exceed your expectations as your trusted financial advisor. 

A sincere thank you for everyone’s continued partnership and confidence. Please know we are your financial advocate and will continue to work diligently to provide you with the highest quality of service and guidance. Maxima Wealth Management is invested and committed to you and your goals. May you be content, wealthy and wise in the year ahead. I wish you a successful and memorable 2021.


Michelle Lee Wagner








Do you feel like you have zoned out or are on autopilot at least until the pandemic is over, especially when it comes to your financial house? Perhaps you are starting to peak your head out and wanting to decide your next steps, but how do you do that?

Zoned Out or Stagnant?

Let’s first explore how this happened – feeling zoned out or stagnant. Recognizing how we got here might help us avoid this consequence in the future. Keep in mind I am a CERTIFIED FINANCIAL PLANNER ™, not a Behavioral Health Professional so this article is offered as a thought-provoking essay resulting with action items.

I think it is important first to realize that the zoned out feeling or feeling of stagnation probably started way before COVID-19. In fact, one variable could actually be that of a learned response or way of thinking. And it may have started as early as your childhood. A simple example is are you the person who sees it as “the glass is half full” or the person who sees it as “the glass is half empty”. What’s great about anything we learn, we can unlearn it or at least improve our awareness to our responses and take actions that will ensure a more productive effect.

But even if one variable is our own learned response to information, could it also be the result from institutional messaging? When I say ‘institutional messaging’ I mean messaging like commercials, news programs or professional social media posts. Another factor working against us is that the human brain has a negative bias which is actually our link to survival. But, because we are inundated with negative messaging, unless there is an immediate threat, we ignore it or feel helpless and become numb to it.

Consumers have been the target of a constant stream of negative and fear-based messaging as a result of increased competition. And this barrage of this type of information has turned off many consumers. More contemporary marketers believe positive marketing messages are the way forward. Today’s consumers are very clear about their values and the level of social/environmental awareness they want from the companies they invest in, whether that be by time, money or emotion.

Take Control

The good news is you have control over your feelings and can take forward moving action to shake the zoned out feeling while strengthening your financial house. The following is a brief list of tasks to help you start this process – some easy and some more difficult.

  • Review your financial goals/strategies and measure your progress
  • Check your credit for any errors or possible fraud
  • Ensure your emergency fund is properly funded
  • Pay down your debt
  • Create or review your estate planning documents – Trust, Will, Durable Financial Power of Attorney (POA), Medical POA, Living Will
  • Create asset/debt lists – Real property, Personal property, Investments/Banks, Insurance
  • Consolidate accounts – 401(k)s, IRAs, ROTHs

It may also be helpful to meet with your financial adviser as they can help with most of these tasks and provide you a quarterly/year-end financial plan review.

Need help? I would love to speak with you about your personal financial plan. Please request a consultation!


As promised in my last blog, ECON101: MACROECONOMICS VERSUS MICROECONOMICS, this piece will address the interesting topic of Fiscal and Monetary Policy. Yes, the adjective “interesting” might be subjective, but I believe it is a good ‘next step’ in establishing the foundation for my ECON101 series.

Let’s start with the understanding that there are three main economic goals that are shared globally. These are: growth, high employment, and price stability. There are, what we call, economic indicators that provide information as to how the economy is doing relative to these three goals. Because there are so many indicators, typically most professionals follow a select few. I will take a closer look at each of the goals and key statistics in future blogs.

Collectively individual’s decisions on how they allocate their resources, such as how much to spend versus save, can affect an economy just like similar economic decisions made by corporations can have an important impact. But rarely does an individual corporation or household affect large economies on their own. However, government policy does have the power to affect the macroeconomy and financial markets. And, government policy would be enacted in an effort to attain one or all of the three main economic goals.

So how exactly does the government intercede to meet their three main economic goals? There are two policies they have access to, they are: monetary policy and fiscal policy.

The predominant goal of monetary and fiscal policy is to create an economic state of steady and positive growth as well as stable and low inflation. This is accomplished by guiding the economy in a way to minimize periods of great volatility to include big economic booms followed by lengthy slumps. Stability is important, it provides individuals and corporations the security needed to be able to make spending, investment and saving decisions.

Monetary Policy

Monetary policy refers to activities carried out by central banks, i.e. the U.S. Federal Reserve, aka “Fed”. These activities are primarily concerned with the management of interest rates and the quantity of money in circulation. These actions can either stimulate an economy or slow an overheated economy.

Three tools the Fed frequently has used are:

Participate in open market operations. This is typically done on a daily basis and is the act of the Fed buying and selling U.S. government bonds. The Fed does this to either add money into the economy or remove it from circulation.

Change the reserve requirement. The Fed controls the reserve requirement (aka reserve ratio). This is the percentage of deposits banks are required to keep in reserve; i.e. unable to lend out. If this is higher banks are unable to lend as much, but if the percentage is decreased, they can lend more which puts more money into the economy.

Establish the discount rate. The discount rate is the interest rate the Fed charges on loans it makes to banks/financial institutions. Obviously, the lower this is the more a financial institution is interested in borrowing and thereby injecting dollars into the economy.

Fiscal Policy

Fiscal policy represents the government’s decisions about taxation and it’s spending. In the United States this is determined by the executive and legislative branches of the government.

Generally, the purpose of most fiscal policies is to affect the total amount of spending, the way it is spent, or both in an economy. This can be accomplished by changing government spending policies or government tax policies.

Spending Policies

If an economy is lacking business activity, the government can step in and increase the amount of money is spends (i.e. fix the roads). This is referred to as stimulus spending. Sometimes a municipal’s tax receipts are limited and the government has to borrow money to pay for the expenditures. The government does this by issuing vehicles like bonds thereby accumulating debt. This is known as deficit spending.

Taxing Policies

Basically, the government can increase or decrease taxes. By increasing taxes, they pull money out of the economy resulting in slowing business activity. If they lower taxes or offer tax rebates the government is keeping or putting more money in the pockets of individuals or corporations. The hope is that the result is increased spending by these individuals or corporations sparking economic growth.

In comparing the two, monetary policy is used in an effort to have an immediate impact to the money supply sparking economic activity. Fiscal policy typically has a greater impact on consumers since it can lead to increased employment and income. Applied together they can have great influence over a country’s economy and its participants.

As I did in my last blog please provide feedback or if you have a specific topic you’d like me to address via The feedback I received in the past has been helpful in guiding my future blogs. Thank you!

Look for my next ECON101 discussion during the 4th Quarter where I’ll begin to look into each of the global economic goals.  


I don’t know if you noticed or not, but it seems that there has been a lot of discussion around the subject of economics. Right now, specifically it is about the U.S. Economy and how it will fare amid COVID-19.

Given all the talk and the fact that I really enjoy the study of Economics, I thought it would be valuable to embark on a series of blogs that address this very topic. I hope you enjoy! At the end of each blog I will provide a link for you to provide feedback or if you have a specific topic you’d like me to address.

Let’s start with what Economics is. I want to start here because there are some misconceptions out there (of which I will address too).

Economics is the study of how we choose to allocate limited resources, why we allocate them in a particular way, and the consequences of those decisions. It analyzes the production, distribution and consumption of goods and services. In today’s environment there are four elements that make up economic activity; they are: land, labor, capital and enterprise.

Economics is not the study of the stock market, money or how to run a business. Many times the performance of the stock market or the value of an investment becomes a reference point as to the state of the economy. While the stock market and certain statistics may be a prediction of the health of the economy, it is important to recognize that in and of itself, it is just ONE variable.

There are two disciplines of economics: macroeconomics and microeconomics.


Macroeconomics studies the part of economics that is concerned with the aggregates and how they interact in the economy as a whole. It focuses on broad subjects such as growth, inflation, interest rates, unemployment, government deficits, levels of exports/imports and taxes. When there’s a discussion about the Federal Reserve raising interest rates or the national unemployment rate is 7.5%, the discussion is about a macroeconomic topic. In a future blog I will discuss how different policies can affect the variables looked at to assess the macroeconomic health of an economy.


Microeconomics focuses on the individual level within the economy. It studies decisions made by individuals and businesses regarding the choices, decisions and allocation of resources and prices of goods and services taking into account taxes, regulations, and government legislation. In a future blog I will discuss several key principles involved in microeconomics.

Microeconomics and macroeconomics should not be viewed as separate subjects, but rather recognize they complement each other. In economics, the decisions of individual businesses are based on the health of the macroeconomy. For instance, a business is more likely to increase the number of workers they hire if they experience indications that the overall economy is growing. Consequently, the performance of the aggregate economy ultimately is contingent on the decisions made by individuals, households, and businesses.

As mentioned above, please feel free to provide feedback or if you have a topic you’d like me to address via   .

My next ECON101 discussion will address how Fiscal and Monetary policy can affect the variables we look at when assessing the macroeconomic health of an economy.

The CARES Act – What Does It Mean for the Individual or Small Business Owner

I know, I know not another article on the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The 880-page stimulus package was just signed into law on March 27, 2020 and already there have been numerous summaries written. My goal for this blog is to provide you an easy to read summary of the provisions that may impact you as an individual or small-business owner.

Before I get into the academics of the CARES Act, I want to take this opportunity to acknowledge the uncertainty the coronavirus has caused. This uncertainty may include that with the health and safety of you and your family, your employment situation, your financial/retirement situation, and many other areas of your life. Bottom line, right now you may find yourself in a place of uncertainty. If this is the case, please feel free to reach out to me. Taking action allows you to take back control and this action could simply be educating yourself on your personal situation.

In response to the Coronavirus global pandemic, aka COVID-19, the U.S. Congress passed the CARES Act. This $2 trillion package was passed to help ease the economic blow experienced by families and businesses.

The following is a brief review of the provisions I feel to be most noteworthy to individuals and small-businesses. This is not a complete review, but it is a gathering from four different reliable sources1.

Individual Provisions:

Individual Recovery Rebates

The CARES Act provides up to $1,200 stimulus check to eligible adults earning up to $75,000. Married couples filing a joint return and earning up to $150,000 will receive up to $2,400. This is based on 2019 adjusted gross income (or 2018 AGI if you haven’t yet filed your 2019 tax return).2 Eligible families (individual and joint filers) receive an additional $500 for each child under the age of 17. As with typical refundable tax credits, this potential stimulus payment begins to phase out when a taxpayer’s income exceeds their applicable threshold. For those taxpayers who’s 2018/2019 AGI exceeds the threshold, but then in 2020 meets the criteria based on loss of income, the Act directs the payment. Yes, this means you will get the stimulus check, but much later. Interestingly, there won’t be a “clawback” for those who end up making more in 2020 than they did in 2018/2019.

It is a good time to mention that prior to the signing of the CARES Act, the 2019 filing deadline was extended to July 15, 2020. If your 2019 AGI meets the applicable threshold and your 2018 exceeds it, you may want to ensure you file your 2019 taxes as soon as possible to try to get it to the IRS before they calculate the stimulus payment. Also, it’s important to mention, 2019 IRA/ROTH/Health Savings Accounts (HSA)/Medical Savings Accounts (MSA)/Coverdell Education Savings Account contributions are all extended along with the filing extension.

That being said, per the U.S. Treasury Secretary Steven Mnuchin payments should go out within three weeks (as of March 27, 2020)3. In an interview on CNBC on March 29, 2020 the Secretary said payments will go out by April 16, 2020.

COVID-19 Related Retirement Distributions

Another relief provided which actually is similar to Federally declared disasters, is the waiver of the 10% early distribution penalty up to $100,000 of 2020 distributions from IRAs and employer-sponsored retirement plans for those impacted by COVID-19 (qualified individuals). The income tax is due, but it can be spread out evenly over 3 years. And the day after receipt of said distribution, one has up to three years to “roll back” all or any portion of the distribution back into a retirement account; thereby, eliminating the tax paid for the distribution. This may require an amended tax return. For employer-sponsored retirement plans, loans can be taken by “qualified individuals”. The maximum amount of the plan loan is increased to the lesser of $100,000 or 100% of the account balance and it applies to loans taken 180 days from the Act’s date of enactment.

As defined in H.R. 748-CARES Act (a)(4)(A)(ii), a “qualified individual” is one:

  • who is diagnosed with COVID–19 by a test approved by the Centers for Disease Control and Prevention,
  • whose spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) is diagnosed with such virus or disease by such a test, or
  • who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate).
Required Minimum Distributions (RMD) Waived

For those not in need of income the CARES Act suspends RMDs during 2020. This applies to retirement account owners and beneficiaries taking stretch distributions. This is a big help because RMDs are based on the account value at the end of the previous year (December 31, 2019). Without this specific relief, retirement account owners would be forced to withdraw and pay tax on a higher percentage of their current IRA balance.

This subject warrants a more detailed discussion with your personal financial advisor given your specific situation. Please reach out to me if you’d like to discuss your situation.

Student Loan Deferral

There are several provisions geared to provide relief to student loan borrowers, the main one I want to address is the temporary relief for Federal Student Loan Borrowers. In general student loan payments on Federal student loans are suspended through September 30, 2020. During this time, no interest will accrue. By default, payments will continue unless individuals take proactive steps to contact their loan provider and request a pause in payments.

Again, if you want to discuss this area more in depth and specifically to your situation, contact me directly.

Health Care Provisions

The definition for “qualified medical expenses” for HSAs, MSAs, and Healthcare Flexible Spending Accounts (FSAs) is expanded to include over-the-counter medications.

Additional personal healthcare provisions include:

  • Medicare beneficiaries will be eligible to receive the COVID-19 vaccine (when available) at no cost
  • During the COVID-19 emergency period, Medicare Part D recipients must be given the ability to have up to a 90-day supply of prescribed medication (must request)
  • Telehealth services may be temporarily covered/relaxed (contact me if you’d like to discuss)

Small Business Provisions:

Paycheck Protection Program/Forgivable Loans

This program is a partially forgivable loan program provided by the Small Business Administration (SBA). One must apply for this loan by June 30, 2020 and have a maximum maturity of 10 years. To qualify the business (to include sole proprietorships) have fewer than 500 employees (with a few exceptions)4. Eligible borrowers are required to certify by good-faith that the loan is necessary due to the “uncertainty of the current economic conditions” caused by COVID-19.

Under this program, the loan may be used to pay for a variety of expenses to include:

  • Payroll
  • Group health insurance premiums/other healthcare costs
  • Salaries/Commissions
  • Rent (business)
  • Mortgage interest (does NOT include pre-paid)
  • Utilities
  • Other business interest incurred prior to February 15, 2020

The most significant potential benefit of a loan provided from this powerful program is the possibility of having all or a portion of it forgiven. The amount eligible is the amount actually spent (during the first 8 weeks after the loan is made) on:

  • Payroll (excludes prorated amounts for individuals with compensation over $100,000)
  • Rent (lease in force before February 15, 2020
  • Utilities
  • Group health insurance premiums/other healthcare costs

Now there is a particular requirement to for the above to be forgiven. The business MUST maintain the same number of employees from February 15, 2020 through June 30. 2020 as it did in the same period in 2019 or from January 1, 2020 until February 15, 2020. If this requirement is not met, the amount eligible for forgiveness is reduced (additional reductions may also apply).

This is definitely a good time to discuss your personal situation with me or your personal financial advisor as there are additional benefits to this program and it can get confusing.

Employee Retention Credit

If a small business is not receiving a covered loan as defined in the SBA Section 7(a)(36), the CARES Act provides a new payroll tax credit. A thorough review of the CARES Act is recommended to see if your company is eligible for this credit.

Deferral of Payment of Payroll Taxes

Another payroll-related tax break is the ability to defer payroll taxes from the date of enactment of the CARES Act through the end of the year, and until the end of 2021 and 2022. Again, employers are NOT eligible if they have debt forgiven by the CARES Act for certain SBA loans.

As I stated in the beginning, the CARES Act is an 880-page document and there are a number of other provisions I opted not to address. There is assistance provided for unemployment insurance expansion, aid for states and municipalities and aid for large companies.

Given the number of benefits/programs provided in the CARES Act that may impact you or someone you know, I highly recommend taking this time to check in with your financial advisor and discuss your personal situation.

 To learn more about how we can help you, contact us today!

Blog Sources




4 H.R. 748-CARES Act Sec. 1102. (a)(2)(D)(i)/(ii)/(iii)/(iv)

Stay the Course Amid Uncertain Times

So much uncertainty being felt in the U.S. and around the globe surrounding a number of different issues, but especially right now with the spread of COVID-19. This is first and foremost upsetting from a human perspective, but then its exacerbated when we watch how the financial markets respond and see our retirement accounts lose so much ground.

At Maxima Wealth Management, it is a fundamental principle that markets are developed to contend with uncertainty, reacting in real-time as it sorts out and responds to all available information. Believe it or not, the recent declines actually demonstrate a functioning market.

While the markets are reacting to all new information as it continues to become available it is also pricing in possible unknowns. During increased uncertainty the risk associated is also heightened. This leads to an increase in returns that investors demand to assume that risk, which drives prices down.

No one can tell you exactly when the markets will turn around or by how much. We do know based on three similar historical events (SARS, Ebola, H1N1) strong evidence shows that markets rebounded quickly and decisively.1

As illustrated in the video link by Dimensional Fund Advisors below, what’s important is “Tuning Out the Noise” and don’t lose sight of your long-term investment plan. This is a time you may recognize the value of your financial advisor.


A trusted financial advisor will work with you to establish your personal investment plan that incorporates your personal risk tolerance and time horizon. Implementing this will create a portfolio allocated in a manner that is comfortable for you, with the understanding that uncertainty is a part of investing and the need to stay the course may ultimately lead to a more pleasant and beneficial investment experience.

At Maxima Wealth Management we assist our clients in developing a plan that meets their individual needs, we offer a structured, unemotional and highly diversified investment approach addressing risk management and helping you stay the course.

To learn more about how we can help you, contact us today for a consultation!



As we grow older, chances are there will come a day when we need assistance with everyday activities. On the positive side, people are living longer. However, that actually increases the chance that we will need long-term care.  

According to a 2016 report from the U.S. Department of Health and Human Services, 52% of those turning age 65 (more than 57% of women, and nearly 47% of men) will require long term care in a nursing home during their life. And the cost for the required services may quickly deplete your assets.1 The results of the Genworth Cost of Care Survey in 2019 reported that the average cost of a one-year nursing home stay in a private room grew more than 3% annually to $102,200 from 2004 cost of $65,185.  National averages for assisted living facility costs grew 3.1% from 2014 to $90,150 average.2

Given the broad of long-term care and planning for it, this article is the first of a series I will provide on the topic.


Usually, when people think of long-term care, they think of nursing homes.  But long-term care means more than nursing home care. 

Long term care goes beyond medical and nursing care to include any assistance you need if you have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time.  Long term care can be provided in a nursing home, assisted living facility, or in your own home. 

There is a range of services available within the community to help meet long term care needs.  These include visiting nurses, home health aides, friendly visitor programs, home-delivered meals, adult daycare centers, and respite services for caregivers who need a break from daily responsibilities. These services help supplement care given by family members.


Depending on the level of care provided, the cost of care in a nursing home averages more than $102,200 a year, and can easily exceed $100,000 or even $150,000 depending on location and the level of care which is required.

Long term care provided at home is also costly.  Home health care provided by a licensed Home Health Aide averaged more than $4385 per month in 2019 resulting in more than $52,000 per year.  And basic homemaker assistance averaged $22.50 per hour.


Many people think their private health insurance or Medicare would pay, but that’s typically not true. Health insurance really only pays for doctor and hospital bills. Medicare is not intended to cover long-term care. Medicare will cover skilled care for periods up to 100 days, but only if certain requirements are met. Unfortunately, if you need care over an extended period of time, you’d have to spend down your assets before Medicaid would be triggered, at which point, your choices of care you receive are decreased.

Others assume their loved ones will provide the care they may need. But should you actually rely on that plan? Many don’t realize how caregivers often suffer emotionally and financially as a result of their caregiving responsibilities.  

These facts explain the growing popularity of long-term care and home health care insurance policies. Using insurance means you won’t need to choose between getting the assistance you need and spending down your assets. It puts you in control.

As stated earlier this article is the first of a series I will post to discuss long-term care. The above is merely a brief overview.  In planning for potential long-term care needs, consumers must be informed about how to evaluate policies based on individual needs and preferences.

As I normally recommend, be sure to consult your financial advisor as you develop your personal long-term care plan. If you need a financial advisor or know someone who would benefit from one, please send them my contact information along with this blog.

1 Long-Term Services and Supports for Older Americans: Risks and Financing (Revised February 2016),

2 Genworth Cost of Care Survey 2019,

7 Tips to Successfully Get Your Affairs in Order

We all know the day is coming when our time will be up and we will leave our loved ones behind. It’s a harsh reality that no one wants to accept, and no one thinks they need to worry about until later on in their life. However, the time is now, not later, to get your affairs in order.

This might seem overwhelming at first, however, your loved ones will thank you if you prepare your estate now, thus allowing a smoother transition for them (with all things considered) upon your death.

To get you started on the right track, here are my top ten tips on how you can successfully prepare your estate for your loved ones when your last day on earth arrives.

1. Make/Update Your Will

Do you have a Will at all? This is step one. If you don’t have a Will, now is the time to make one, especially if you have loved ones you would like to leave money or property to, or if you have children. Making a Will can ensure everything is how you want it to be after you are no longer here. Not having a Will can put your family through more stress and heartache should you fail to do so, as there are a lot more hoops they will have to jump through, on top of the emotional turmoil they will already be dealing with regarding your departure.

If you already have a Will, then that’s great! However, when was the last time you updated it? Making sure your Will is updated can keep you on the right track to successfully preparing your estate.

2. Create Durable General Power of Attorney

If you become incapacitated or incompetent, you will not be able to handle your own financial transactions and affairs. Therefore, designating a durable power of attorney, someone who handles your financial world on your behalf, can be highly beneficial for you to do.  Otherwise, your family or loved ones will end up in court for a guardianship proceeding. This can be a very long, difficult process. 

3.  Review Your IRA/ 401K/Other Retirement Plans

You worked hard to save for your retirement all of those years–so hard, that you will still have plenty of funds left that will probably exceed your lifespan. Bravo! Not a lot of people can achieve that. Make sure every penny that you saved and earned goes to the people you want to benefit from your leftover hard work–whether it’s your family members, a charity, or whomever, review your retirement and investment plans to double check who your beneficiary is. 

4. Create A List of Financial Accounts

This is great especially if you have many financial accounts. If something happens to you, does your spouse know about all of the financial accounts you both shared together over the years if you were the one who paid the bills? Would he/she know all of the passwords to be able to gain access to your financial assets together should something happen to you? Don’t leave your family in the dark trying to piece things together with the limited information they may be able to find.  

5.  Make Arrangements for Access to Your Safety Deposit Box

This is one that a lot of people accidentally forget. You have collected valuable items over the years and have kept them safe in your bank’s safety deposit box; however, if you don’t tell anyone valuable items are in there, give someone access or knowledge of where the key is, or forget to add someone as being allowed to access your box, then once something happens to you, your valuable items will not get left behind to those you love most.

6.  Verify Account Ownership and Beneficiary Designations for All Accounts

Making sure you have added the correct and current information for your beneficiaries and have allocated the percentage you wish to leave behind for them is also imperative to ensure your monies are going where you want them to go after you are gone. This is important for any monetary asset, like bank accounts, and life insurance policies, not just those retirement accounts! Comb through all of your accounts to make sure the beneficiary designations are up to date and how you want them set up.  Beneficiary designations trump whatever is stated in your Will or Trust. 

7.  Provide A Trusted Family Member or Friend with the Location of Confidential or Valuable Items, Spare Keys and Security Codes

In life, we all try to be careful with whom we trust sensitive information to, such as what our passwords are, where our spare keys are located, and more; however, when successfully setting up your estate, it is vital to pick at least one person you entrust this information to so at least one person has access to your assets and valuable items once you are gone.

By following these seven tips, you will be better prepared to hand off your estate and assets to the loved ones and charities of your choice to ensure your legacy gets left behind in the way you want it to.

About the Author, Nicole Pavlik: Estate Planning, Business Planning, and Probate Attorney

Nicole Pavlik Law Firms helps residents of Phoenix, Arizona with their estate planning, business planning, and probate needs. To see what Nicole Pavlik can do for your estate or business, give her office a call at (602) 635-6176.

What Can a Financial Advisor Do for Me?

You may have noticed that many “financial” or “investment advisor” blogs conclude their articles with the recommendation to seek advice or guidance from a financial advisor; I know I do. This is sometimes recommended because there are a number of complicated issues in which a financial advisor is specifically educated and licensed. Also, the term “financial advisor” is used by a wide variety of professionals with a number of difference licenses and/or certifications.

Below is a comprehensive list of services a financial advisor might offer. When deciding which financial advisor will meet your needs, I recommend that you know what services they provide and understand their ideal client. Choosing your financial advisor is a very personal decision and I believe an important long-term partnership.

Below is an example of financial advisor services and their corresponding questions that may be answered:

Retirement Planning 

Where do you want to live when you retire? Are you financially ready to retire? How will you take your distributions from your retirement accounts?

Investment Management 

Is your investment portfolio allocated according to your risk tolerance and time horizon? Should considerations be given to selling investments to recognize tax losses?

Insurance Services 

Do you have the proper amount of insurance in all areas at risk? What options do you have with existing insurance policies?

Financial Planning

Is your plan comprehensive? Does your plan help you attain a full life?

Estate Planning

Do you have the proper estate planning documents in place for your situation? Have you reviewed who you’ve identified as your beneficiaries?

Education Planning

How much do you need to save to fund higher education for your children or grandchildren? What vehicle provides the best advantages for saving?

Business Owner Solutions

What is the best retirement plan for my business? What is the best vehicle to prepare for ownership transfer?

Most financial advisors initially meet with you to discuss your goals and objectives. This helps with establishing a plan to meet your needs. Once the plan is developed and implement, you should expect to meet with your advisor on an ongoing basis (i.e. quarterly, semi-annually or annually) depending on your needs to ensure success. Additionally, you should expect to receive regular communication on the progress of your financial goals/objectives.

Financial Advisor Qualifications

Unfortunately, there isn’t just one educational degree, regulatory license or professional certification required to be a Financial Advisor. The following is a breakdown of the different distinctions:

Educational Degrees – This is wide-ranging and may include a Bachelors, Masters or even a PhD degree.

Regulatory Licenses – These are required to sell and give financial advice for particular investments (stocks/bonds) or insurance products. The most popular licenses are the Series 6, 7 and 65.

Professional Certifications – The two most popular certifications are the CFP® (Certified Financial Planner) and the CFA® (Chartered Financial Analyst). A CFP® has been recognized by the CFP® Board of their expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement. A CFA® has been recognized by the CFA® Institute of their competence to pass three levels of exams on accounting, economics, ethics, money management and security analysis.

The main distinction between the two certifications generally comes down to the fact that a CFP® works with individuals to accomplish their financial goals/objectives and a CFA® focuses on investment management/analysis in large-scale money management corporate situations (i.e. mutual fund companies).

In summary, a financial advisor can help assist you with everything from identifying your financial goals/objectives, implementing your financial plan, and strategically plan for life events. Choosing a financial advisor is a very personal decision and I believe in the importance of establishing a strong, trusting relationship between the client and advisor.  However, it is your responsibility to determine your needs and understand what is most important to you in identifying the best financial advisor for you.

If you need a financial advisor or know someone who would benefit from one, please send them my contact information along with this blog.