U.S. Markets open in 9 hrs 12 mins

Ask Farnoosh: Talking to Parents About Their Long-Term Financial Plans

Thinkstock

@LavernMcDonald asks via Twitter: My now retired, healthy parents [in Florida] have shared nothing about their finances or their long-term plans. How do we start the [conversation]?
 
It’s fantastic that you’re thinking about approaching your parents about their financial plans. I know this can be an extremely sensitive issue for both sides. No one likes to imagine the what ifs and it’s sometimes awkward for parents, who’ve always been the caretakers, to suddenly solicit financial advice or help from their kids. As parents, they may still want to feel in control and you should account for that, says David Solie, author of “How to Say It to Seniors: Closing the Communication Gap with Our Elders.” “The goal is to acknowledge that they are independent, want to stay that way and you want to support them in that. It’s all about them making better choices and the goal here is to be able to show them that they’re in charge but you’re on their team,” he says.
 
The fact that your parents are healthy and active means that now is actually the best time to start a discussion. Begin by asking them how they envision their next 10 to 15 years. Explain that you want to help them achieve that vision and that to do so, it’s important that they share key information with you in case of an emergency. In that first meeting you may want to also ask for a list of important contacts including their accountant, lawyer, doctors, lenders and insurance agents.
 
To your parents, the conversation may seem to come out of the blue, so I suggest breaking the ice by referencing an article you read online about adult children and their aging parents or any of the surveys showing how retirees may outlive their savings. Then ask, What do you think about that?
 
I recently did this very thing with my parents and while my mother did admit the conversation depressed her slightly, in the end, both came to the conclusion that they needed to update their will and refinance their mortgage to save more for retirement. It wasn’t the easiest initial conversation, but I feel like the door’s now open for me to continue talking to them about their goals and financial status. I feel part of their team.
 
@CollegeGuru1425 asks via Twitter: How much is too much to pay for an apartment right out of college?
 
Your housing budget shouldn’t exceed more than 30% of your take-home pay. Calculate your after-tax monthly salary and multiply that by 0.30 -- that’s the most you really want to shell out for rent, assuming you’ll have other expenses to cover, including transportation, food, utilities and student loans. If you live in an ultra-expensive city like New York or San Francisco, keeping to this budget is especially difficult; you may feel pressure to spend 50% or more of your income on a lease. But if you’re willing to make some sacrifices – live with two or more roommates, live in a walk-up building and commute 20 to 30 minutes to work by subway -- you can have an easier time staying within that 30% budget. And if you do live in a high-priced city, remember that it can offer you savings in other ways such as public transportation or a short walking distance to work, says Ornella Grosz, author of "Moneylicious: A Financial Clue for Generation y." “You may have to pay a little more [for rent], but it could be worth it.”
 
If you have family nearby, there’s no shame in shacking up with relatives or Mom and Dad during that first year – even if you have a job. As long as everyone’s game, getting free (or almost free) rent can be a major financial stepping stone for you. Take advantage of any opportunities like that and use the savings to aggressively pay down any debt you have. Consider the time spent at home a real investment in your future.
 
For more, check out a previous Ask Farnoosh column on how to save money on your first apartment after college. 
 
Got a question for Farnoosh? You can reach her on Twitter @Farnoosh or email her at farnooshfinfit@yahoo.com.
 
 



















  • Police Took Suspect's Guns, Dad Gave Them Back: The Latest on the Nashville Waffle House Mass Shooting
    News
    Time

    Police Took Suspect's Guns, Dad Gave Them Back: The Latest on the Nashville Waffle House Mass Shooting

    The suspect in a mass shooting at a Nashville Waffle House was arrested last year for being in a restricted area near the White House, police said Sunday. After an investigation by police in Illinois and the FBI, authorities removed four guns from 29-year-old Travis Reinking’s home and gave them to his father. Reinking is still on the run after a heroic customer at the Waffle House confronted him when he stopped to reload his weapon.

  • George H.W. Bush Honored His Wife in a Subtle Way at Her Funeral
    News
    Time

    George H.W. Bush Honored His Wife in a Subtle Way at Her Funeral

    Former President George H.W. Bush paid a subtle tribute to his late wife, Barbara Bush, at her funeral on Saturday. The former president wore a pair of socks decorated with stacks of colorful books, in a nod to his partner’s longstanding commitment to advancing literacy. George H.W. Bush wore socks with books on them in dedication to Barbara at her funeral today.

  • The Trump stock market looks a lot like Reagan's, and that may not be a good thing
    Business
    CNBC.com

    The Trump stock market looks a lot like Reagan's, and that may not be a good thing

    Reagan's stock market gives clues for the Dow's next move: Acampora    2:27 PM ET Fri, 20 April 2018 | 01:53 Donald Trump, like Ronald Reagan before him, is an outside-the-beltway president. That recently prompted longtime market watcher Ralph Acampora to investigate whether the two had anything else in common. What he found could be a warning to the stock market. "Ronald Reagan had a six-month honeymoon," Acampora, director of technical research at Altaira Capital Partners, told CNBC's "Futures Now" last week. "The percentage gain was roughly about 10 percent." When Reagan was sworn into office on Jan. 20, 1981, the Dow Jones Industrial Average was trading at around 950. The index, which at

  • Business
    Oilprice.com

    Saudi Arabia’s $100 Oil Dilemma

    Saudi Arabia is rumored to want oil prices at $100 per barrel, but if prices rise that high, it could sow the seeds of the next downturn. Saudi officials want more revenues for their budget and a higher oil price to bolster the valuation of the Aramco IPO. As Liam Denning of Bloomberg Gadfly points out, in the past decade, while oil prices have surpassed $100 per barrel for periods of time, they didn’t stay there for very long.

  • Southwest Cancels 40 Flights as It Works to Inspect Plane Engines After Deadly Explosion
    Business
    Time

    Southwest Cancels 40 Flights as It Works to Inspect Plane Engines After Deadly Explosion

    Southwest Airlines cancelled about 40 flights Sunday as the airline stepped up efforts to inspect the engines of its Boeing 737 fleet on the heels of last week’s deadly engine explosion on Flight 1380. The airline voluntarily announced inspections of engines in the CFM56 family – which powers nearly all of Southwest’s fleet – on Tuesday, after a passenger died when she was partially sucked out of an aircraft window that had been shattered in by the engine blast. Inspectors now believe that the CFM56-7B jet engine failure occurred when one of the engine’s fan blades broke off and came loose.

  • There's More to SunPower's U.S. Expansion Than Meets the Eye
    Business
    Motley Fool

    There's More to SunPower's U.S. Expansion Than Meets the Eye

    For SunPower, the real payoff from this deal won't derive from gaining SolarWorld's manufacturing plant -- the key benefit will come if it wins an exclusion from tariffs for its high-efficiency solar cells and panels, which are made in Asia. SunPower is the only global manufacturer that produces interdigitated back contact (IBC) solar cells at scale, and no U.S. manufacturers use the technology today.

  • Here’s what Wells Fargo did to trigger a $1 billion fine
    Business
    MarketWatch

    Here’s what Wells Fargo did to trigger a $1 billion fine

    Unlike many of the scandals that have triggered billion-dollar penalties for banks, the problems that led to a 10-figure federal government settlement for Wells Fargo & Co. don’t appear to have colorful emails or trader messages describing bad behavior. Wells Fargo’s WFC, +1.98%  risk management already resulted in an unprecedented Federal Reserve sanction of having its growth limited. Wells Fargo, keep in mind, was fined by the CFPB and other regulators after opening millions of customer accounts without permission. To hear the OCC tell it, Wells Fargo did not establish “effective first and second lines of defense,” execute on a comprehensive plan to address compliance risk management deficiencies, fill mission-critical staffing positions, implement a reliable risk assessment and testing program and report compliance concerns adequately to the board.

  • N. Korea Concerned Over Excessive China Reliance, Author Chang Says
    World
    Bloomberg Video

    N. Korea Concerned Over Excessive China Reliance, Author Chang Says

    Gordon Chang, Author of "Nuclear Showdown: North Korea Takes on the World," gives his take on what may happen between U.S. President Donald Trump and North Korea Leader Kim Jong-Un when they meet. Chang speaks with Kathleen Hays and Yvonne Man on "Bloomberg Daybreak: Asia." OF THEM WITH GREAT INCENTIVE. YOU CAN ALSO END UP DOING INVESTMENT, ALL SORTS OF FINANCIAL ASSISTANCE, NORTH KOREA IS VERY CONCERNED ABOUT IT RELIANCE ON CHINA.

  • The Simple Reason Why Marijuana Stock Valuations Aren't as Sky-High as They Seem
    Business
    Motley Fool

    The Simple Reason Why Marijuana Stock Valuations Aren't as Sky-High as They Seem

    Are marijuana stocks ridiculously overpriced? Of the top three marijuana stocks in terms of market cap, only Aurora Cannabis (NASDAQOTH: ACBFF) reported positive earnings over the last 12 months. Based on these conventional valuation measures, all three of these top marijuana stocks certainly appear to be way overpriced.

  • Philip Morris International (PM) Plunges: Time to Buy the Dip?
    Business
    Motley Fool

    Philip Morris International (PM) Plunges: Time to Buy the Dip?

    Shares of Philip Morris International (NYSE: PM) plunged 16% on April 19, after the tobacco giant posted a mixed first quarter. It also noted that soft demand in Indonesia -- once a major growth market -- offset its growth in Pakistan and Thailand in South Asia.

  • 25% of Baby Boomers Plan to Retire Before Age 65. Here's What You Need to Know if You're One of Them
    Business
    Motley Fool

    25% of Baby Boomers Plan to Retire Before Age 65. Here's What You Need to Know if You're One of Them

    In fact, a good 25% of employed baby boomers think they'll retire prior to age 65, according to new data from the Insured Retirement Institute. Your Social Security benefits are calculated based on what you earned during your top 35 working years, but once your full monthly benefit amount is established, you can only collect it in full upon reaching full retirement age. Now you are allowed to file for Social Security as early as age 62.

  • Half of Americans Aren’t Saving for Retirement. Here’s How to Do Better
    Business
    Motley Fool

    Half of Americans Aren’t Saving for Retirement. Here’s How to Do Better

    New data tells us that 49% of Americans actively are saving for retirement -- which means that half the workforce is at risk of retiring broke. Worse yet, only 16% of workers are very confident that they'll have enough in their nest eggs to cover their future expenses. If your retirement savings are non-existent, it's time to play around with your expenses and start cutting corners to free up more cash.

  • Better Buy: Gilead Sciences, Inc. (GILD) vs. Pfizer (PFE)
    Business
    Motley Fool

    Better Buy: Gilead Sciences, Inc. (GILD) vs. Pfizer (PFE)

    Gilead Sciences (NASDAQ: GILD) and Pfizer (NYSE: PFE) face different challenges -- but there is some similarity. Gilead is trying to prove that it can return to growth despite falling sales for its blockbuster hepatitis C virus (HCV) franchise. Pfizer is attempting to move past the weight on revenue resulting from older drugs that have lost patent exclusivity.

  • Mnuchin Is Cautiously Optimists on China Trade Deal
    World
    Bloomberg Video

    Mnuchin Is Cautiously Optimists on China Trade Deal

    Apr.22 -- U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing. Bloomberg's Ros Krasny reports on "Bloomberg Daybreak: Australia."

  • Mobius says there’s a 30% correction coming for U.S. stocks
    Business
    MarketWatch

    Mobius says there’s a 30% correction coming for U.S. stocks

    Mark Mobius, the 81-year-old investment guru, believes the U.S. stock market is set for a 30% correction that would essentially wipe out the gains of the last two years. The renowned fund manager, who left Franklin Templeton, the American investment house, after more than 30 years in January, said “all the indicators” point to a large fall in the S&P 500 SPX, -0.85%  and the Dow Jones Industrial Average DJIA, -0.82%  . “I can see a 30% drop,” said Mobius, who launched one of the world’s first emerging market funds. “When consumer confidence is at an all time high, as it is in the U.S., that is not a good sign. “The market looks to me to be waiting for a trigger that will cause it to tumble. You

  • Walmart's New Strategy Could Hurt These Popular Stores
    Business
    Motley Fool

    Walmart's New Strategy Could Hurt These Popular Stores

    Over the last two years, it's been clear Walmart (NYSE: WMT) is positioning itself as a competitor to Amazon. After paying $3.3 billion for e-commerce provider Jet.com in 2016, Walmart has increasingly encroached on Amazon's turf by attempting to lure Amazon's core consumer base, move into new industries, and replicate Amazon's disruption-focused mindset. With all the excitement about its digital changes, Walmart's core terrestrial operations may have flown under the radar.

  • Better Buy: CVS Health Corporation vs. Express Scripts
    News
    Motley Fool

    Better Buy: CVS Health Corporation vs. Express Scripts

    There are probably no better examples of this than CVS Health Corporation (NYSE: CVS) and Express Scripts (NASDAQ: ESRX). CVS Health ranks as the largest pharmacy chain and the second-largest PBM in the U.S. In December, the company announced plans to merge with Aetna (NYSE: AET), the No. 3 health insurer in the country. Express Scripts is the biggest PBM.

  • People Thought Prince Harry and Meghan Markle Were Ridiculously Cute in Matching Outfits for the Queen's Birthday
    News
    Time

    People Thought Prince Harry and Meghan Markle Were Ridiculously Cute in Matching Outfits for the Queen's Birthday

    Prince Harry and bride-to-be Meghan Markle were matching in navy blue at Queen Elizabeth’s star-studded birthday concert Saturday night — and people on social media took notice. Markle wore a navy Stella McCartney caped dress with matching navy suede

  • Is Frontier Communications Corporation (FTR) a Buy?
    Business
    Motley Fool

    Is Frontier Communications Corporation (FTR) a Buy?

    Frontier Communications (NASDAQ: FTR) has been in steady decline. It has lost customers in every quarter since it spent $10.55 billion in April of 2016 to buy Verizon's (NYSE: VZ) wireline business in California, Texas, and Florida.

  • How the new tax law creates a ‘perfect storm’ for Roth IRA conversions
    Business
    MarketWatch

    How the new tax law creates a ‘perfect storm’ for Roth IRA conversions

    For years I’ve lectured about the wonderfulness of Roth IRAs. While the new Tax Cuts and Jobs Act (TCJA) includes one negative change for Roth IRAs, they are still pretty wonderful. Here’s what you need to know about Roth IRAs and especially Roth IRA conversions in the post-TCJA world. Roth IRAs have two big tax advantages The two most-important Roth IRA tax advantages are: Tax-Free withdrawals Unlike traditional IRA withdrawals, qualified Roth IRA withdrawals are federal-income-tax-free and usually state-income-tax-free too. What is a qualified withdrawal? It’s one that is taken after you, as the Roth account owner, have met both of the following requirements: 1. You’ve had at least one Roth

  • Do Pro-Trump or Anti-Trump Books Sell Better? Here's What the Data Shows
    Politics
    Time

    Do Pro-Trump or Anti-Trump Books Sell Better? Here's What the Data Shows

    Donald Trump has made America read again. Since the beginning of the year, every New York Times bestseller has been about the 45th president, according to CNN. To answer that question, we gathered data from the Times nonfiction list of bestsellers on every book explicitly about Trump since his election in 2016.

  • Netflix, Inc.'s Cash Flow Guidance Is Scary
    Business
    Motley Fool

    Netflix, Inc.'s Cash Flow Guidance Is Scary

    Last Monday, Netflix (NASDAQ: NFLX) released a stellar first quarter earnings report. Netflix even managed to reduce its rate of cash burn last quarter. If that projection is accurate, it's hard to see how Netflix will be able to live up to its valuation of nearly $150 billion.

  • These Materials Dividend Stocks Are Best In Class
    Business
    Simply Wall St.

    These Materials Dividend Stocks Are Best In Class

    The materials industry is deeply cyclical with producers benefiting highly during an economic boom and many players going bankrupt in a bust. 531810 has a sizeable dividend yield of 3.51% and their current payout ratio is 42.86% . Dividends per share have increased during the past 10 years, but there have been a couple hiccups.

  • 4 Top Stocks to Buy in April
    Business
    Motley Fool

    4 Top Stocks to Buy in April

    Oil prices are on fire, recently hitting a three-and-a-half-year high. Oil giant ExxonMobil (NYSE: XOM) stumbled into 2018 after reporting lackluster results to end last year. As a matter of fact, Exxon is currently trading at a valuation not seen since the 1980s.

  • The GOP Has One Big Idea For Health Care Reform: Crappier Insurance
    News
    HuffPost

    The GOP Has One Big Idea For Health Care Reform: Crappier Insurance

    The American health care system is an expensive, sprawling mess. The Republican Party’s brightest idea for how to fix it? Make health insurance worse.Here’s what the GOP has in mind: Weakened protections for people with pre-existing conditions. Skimpier