(applause) So there's a good reason that our next speaker is one of the most sought-after speakers in the financial planning space. We have asked her to attend this conference a couple of years running, and she's had other engagements, and so we're so excited to have her here. She brings expertise to bear on several different areas, which is one of the reasons why everyone wants her to come talk at their conferences.

So she's a medical doctor. She understands health care matters. She's a financial planner. That is her livelihood these days, and she's a certified financial planner. She's a human being who has worked with a lot of other human beings through her work, and so she brings a wonderful human quality to both the health care and the financial planning side of things.

This is Carolyn McClanahan. We're so excited to have her here. Please give me a round of applause in thanking her. (applause) - Okay, am I on, am I on? Hello, hello. I am actually so excited to be here. So many people who have been mentors and idols to me, like such as Christine, Bill Bangen, I mean, are here, and so just so excited that I could also be here this year.

So when Christine asked, "What do you wanna talk about?" it took me no, I already knew what I wanted to talk about. When should you do it yourself or should quit doing it themselves? So a little bit of background. Started out, I was a doctor. I practiced mainly emergency medicine.

My husband's an engineer, and we did our own investing. I had a IRA when I was in residency, so started kind of early. He inherited some money in the mid '90s. We invested that money. We did quite well because we were so brilliant, right? We were lucky. And towards the end of the '90s, and he had quit being an engineer, and he didn't wanna go back.

He wanted to be a photographer and a track coach. So I married an engineer, but now he wanted to make no money, right? And I said, "Honey, I love you, "but I am not going to support you, "so we need to make sure this little bucket of money "that we've done well with is enough "for you to be able to quit." We knew it wasn't enough to retire, and we were only in our mid '30s, and I actually love medicine.

I still volunteer to this day. I love patient care. I do business of medicine. The culture of medicine is very challenging. That is what I did not like. So I went back to school. Well, no, we tried to find a financial planner, and they were sales schmucks. They charged too much.

They didn't really do -- This was back in 2000. They called themselves financial advisors, but all that really meant was investments and not really financial planning. And so they kept trying to, like, sell us products and stuff that we knew we didn't need 'cause we were great do-it-yourselfers. So I decided to go back to school for fun, to learn about financial planning for me and for my husband, and I fell in love with it, and I saw this huge need for people getting advice.

And at first, I was just going to take care of my ER buddies and my running buddies. I'm a runner. And then it just, like, I started a firm in 2004, and I was going to practice emergency medicine part-time, financial planning part-time, and then it just kind of exploded.

But plus, I found out I was the lowest-paid person in our practice, emergency medicine practice, and I was the only woman. And I'm like, "I am tired of this BS," so I left medicine. And so I had my financial planning practice, and all of a sudden, I had all these wonderful people from NAPFA and stuff that helped me get started and understand how to be a real financial planner.

And so all of a sudden, I started recognizing all these intersections of health and finance, like people don't know how to plan for chronic illness. How do you help uninsurable clients get health insurance? This was back before the ACA. So I started putting together all these fun talks. Before you know it, I realize there is some stuff I know that could really help both professions.

So I'm really honored that I get to do this work. I feel like it's my true calling. And one of the things -- so my practice is fee-only fiduciary practice. We don't try -- and I'm just telling you about my practice so you understand my mindset. I hated AUM because it's like, "We are real financial planners.

Why are we charging people based on assets?" So I was one of the early pioneers of doing flat-feed planning, which I'm really excited because that is starting to blossom, and there are more flat-feed planners out there. But, you know, I developed all this great clientele through the years, and we started recognizing -- and we started getting a lot of do-it-yourselfers who realized that they needed help.

They'd become too complicated to do it themselves well, or they were getting into trouble. And so I have lots of stories to tell you because, you know, doing it yourself is great. I was a do-it-yourselfer. And I want to go through how much should you do yourself, and then when should you get help, and then how and where to get help.

So we are going to start with a quiz. I'm going to have everybody raise their hand. These are -- you know, people think of financial planning as investments, and Bogleheads, you guys all love investment stuff, and I know you talk about tax, you talk about estate, but you're trying to do it all yourself.

I want to see how much you guys are really doing. How many of you do all your cash flow in budgeting? That's the easy part, right? And you planned out your cash flows for the next however many years of your living in retirement. Raise your hands if you've done that.

Good. How many of you do your own taxes? Ooh, how many of you do your own tax planning? Very different. Wow. How many of you feel really good about your insurance and your asset protection? Mm, less hands, but still enough. How many of you have -- do not have an estate plan, or you've done your estate plan using Internet-based resources?

How many of you have used an attorney -- because people -- how many of you have used an attorney to do your estate plan? Okay. Some hands aren't missing, and it's probably the ones who are embarrassed to tell us they haven't done an estate plan. Okay. And this one, I'm pretty sure I know the answer.

How many of you do all your own investing? Okay. Okay. Now, let's start. What I'm going to take you through is all the poops I see, right, of each of these sections. So, cash flow planning. Everybody should be able to do this, and thank goodness, financial literacy is improving, but not fast enough.

And so, what do I see people get in trouble with? They're not paying attention to their statements. Everything is Internet-based. Now, all your statements are online. So, how often do you really look at them? I see people with duplicate subscriptions or subscriptions they don't use, fraud that they haven't caught, that the banks haven't caught.

So, it's really important to pay attention to your statements. The other thing is people don't ever download their statements. And if you get into an accident, or if you die, and your family has to pay the bills, and you don't have anybody else on the count, what happens to those accounts?

They're frozen. And not only are they frozen, you're not going to be able to access them online, so your family's not going to know when and what bills need to be paid. So, having too many accounts. You know, you see this great yield at this account, this great yield at this account.

Oh, this beautiful credit card. Before you know it, you have five, 10, 15 statements. The estate planning attorneys will love you when you die, because now you've got to clean up all that mess if you have multiple accounts. Poor social security claiming strategies. People don't understand. It's not just about you.

It's you and your spouse. And people don't think through good income planning so that they can delay social security to when it's most beneficial for them to take it. A lot of people say, "Government's going to run out of money." Government will not run out of money. It can't.

It creates the money, right? We do have to have some tax issues around that. But social security's not going to go away. Too many people claim way too early, mostly out of fear, and they don't have anybody else to talk them out of it. And the big one is they don't notice they're slipping.

So I had a 90-year-old client, and he was very good about paying his bills, and he got his credit card statement every month. He looked at how much he would spend, and he would send the credit card people a check. This is -- he was getting paper statements. And somewhere along the line, he had started automatic bill pay.

So he was paying this credit card every month by a check. They were also deducting stuff automatically. And before you know it -- and the son finally caught it. He had a $2,000 credit card balance of money he could spend. And it's like, "Okay, this guy could die any day.

It's hard to get money out of the credit card." So they had a big family outing at Maggiano's when all the grandkids and kids came down, and they spent the entire $2,000. But the son looked at -- kept up with him going forward because we didn't -- the slip was a gradual decline.

Tax plan -- a PREP. And tax planning software makes it easy, but when do people get in trouble? When they have self-employment income or business income, a lot of people miss deductions. A big one I see is the health insurance deduction. You know, if you're self-employed and on Medicare, you can deduct Medicare premiums from your self-employment income.

So, you know, there are a lot of little tax things that people don't understand that they deduct, so they miss a lot of things. Alternative investments, to me, just create a mess with -- and I'm speaking to the choir here, though -- mess with your taxes, because now you've got to wait on your K-1s.

You've got to make sure your K-1s are appropriately put in. Too much trading. Had to do-it-yourselfer who came to me. His Schedule D was 10 pages long. You got -- the people who do taxes are -- you guys understand what happened there? He was trading, trading, trading, wash sales, crazy stuff going on.

So, thank goodness he didn't -- he did it himself quite well, but he was in a lucky moment. But his taxes were a mess. Multiple income streams. A lot of times people are -- you know, that have two jobs or two spouses have jobs. They're not withholding the amount, especially if you have great investments and that are kicking off income because you're not tax-efficient with your investments, then you don't do enough withholding.

Now, how many of you here know what a 8606 is? Part of you. Okay, great. So, when you do IRA contributions, non-deductible IRA contributions or any contributions, Roth conversions, it gets recorded on Form 8606. How many of you have had more than one accountant in your lifetime? For those who don't do their taxes, some say, "Well, I'm my own accountant, so I don't mess up." Well, what happens is, if you change accountants, oftentimes if you were doing non-deductible IRA contributions, 8606 tracks your basis in your IRA.

So, when you do that Roth conversion, you don't have to -- or you pull money out of your IRA, you don't have to pay taxes on that post-tax money. Well, if you don't keep up with 8606s, that gets lost. And so, I've had clients that have had, you know, 40, 50, $60,000 in IRA contributions they made in the past or a post-tax that got lost because they changed accountants and it wasn't in the old accounting software.

We've even had clients who kept the same accountants and the accountants got new accounting software and the new accounting software didn't carry over the old 8606s. So, it can be a mess. And then finally, again, I'm going to say this over and over and I'm going to get deeper into this, cognitive decline is an issue.

Now, tax planning, biggest mistakes I see. Not utilizing lower tax brackets for income and capital gains. How many of you are really good at this? Oh, not many hands. OK. Nothing breaks my heart more than to see a tax return with negative income. You know, like you've had so many deductions that you go, "Oh, my tax is zero.

I'm so excited. My negative income is 20,000." What have you done there? You missed out on tax-free Roth conversions or IRA distributions if you need the money, whatever. And so, it's important to call the age 60 to 70 the golden age of tax planning for retirement because that's when you're not taking Social Security yet.

You don't have required distributions yet. You might not-- If you're early retiree, you might not have a lot of income. You might be in the 10% tax bracket. You can take capital gains, 0% capital gains tax rate up to when you're through the 12% bracket. And so, I see so many people missing out on these tax planning opportunities in those early years of retirement.

Also, for people who need health insurance, ACA tax credits. If you do great income planning, you can get health insurance from age 60 to 65 for nothing. Great health insurance, tax credits worth $20,000 if you do good income planning. A lot of people don't know this. So, miscalculating retirement plan distributions.

People have multiple jobs now. So, they'll retire with 403(b), another 401(k). They have three IRAs. Well, some-- Everybody knows that you can take-- you can lump all your IRA distributions for your RMDs and take them from one IRA, but you can't do that for 403(b)s and 401(k)s. So, making mistakes on that, and that creates a nightmare.

Making inappropriate contributions. Just had a new client come to us recently. Been making Roth contributions for a few years now, and his income is $400,000 a year. Yep. Got to do some unwinding there. I'm like, "Oh, I hate to tell you this." I love when I can tell people good news.

I hate the bad news, but he won't do it going forward. Not keeping up with basis. How many of you have stocks or mutual funds where you don't know the basis? Not many, but the good news is the rules changed recently. So, all the reporting, all the mutual funds, and the custodians have to help you keep up with basis.

That wasn't so, but a lot of people will have old stocks where they don't know basis, and so, especially we have one client who had this stock. We kept bugging him to get basis for us. Well, the company was bought out and sold, and his shares were forced sale, basically.

And now, we have this $64,000 capital gain that he didn't know basis. Painful, painful, painful. You see this a lot with employee stock because they didn't do a good job keeping up with basis during employee stock. Poor charitable planning breaks my heart when I see people they're giving away like $10,000 a year using cash.

You know, maybe they get $10,000 property tax deduction, income tax deduction because of the SALT caps. So, they have $20,000 of deduction a year, and then they end up having to take the standard deduction because it's under a standard deduction. Well, let's say you're age 60, and you give $10,000 a year away, and you have some appreciated stock.

Well, you could take $100,000 of appreciated stock. You don't have to pay the capital gains taxes. You can put it in donor-advised fund. You get a big write-off that year. You can either do Roth conversions, take capital gains, you name it. You can use that, and then you get the standard deduction the rest of the time.

You saved a load in taxes. So, these are the things do-it-yourselfers don't think about. Gifting inappropriately. People have, and I've already heard it. I love this audience. You know, I was on the panel this morning. A lot of you guys have already told me some great stories throughout the day, and I hear a lot about like gift, you know, I have all this appreciated stock.

What do I do with it? Give it to your children who are in low tax brackets. Let them sell it. Sometimes they can sell at 0% capital gains rate. Great way to gift. Also, you can, the other gifting mistake I see, oh, I have a lot of money. I want to help my children buy a house.

So, you just give them $200,000. Well, most likely because the IRS is so busy that they're not gonna get in trouble with that, but let's say they change the estate tax laws, and now our estate tax exemption is lower. If you didn't document that correctly, that could cause problems down the line.

So, have I hit any buttons yet? We'll wait till we get to the investments. Insurance, you know, people who are do-it-yourselfers, two reason people do it themselves. They don't trust people, or they're cheap, right? And the problem with when you're cheap, you also tend to be cheap across the board so you don't buy enough insurance.

Nothing breaks my heart than seeing people who have a few million dollars in unprotected assets, and they have the minimum underlying coverage on their auto liability. I mean, in Florida, that's a nightmare, and man, you could get sued in a heartbeat. There's a reason O.J. Simpson, well, there's a lot of old people in here.

I'm old, so I can say that. You guys remember O.J. Simpson and all that. So, what's the first thing he did when he got in trouble? What did he go do? He bought a big, huge mansion in Florida. I'm from Florida. And the reason he did that is that home is 100% protected from creditors.

Every state's different. Florida's just very good about creditor protection, but some people forget to homestead, so you lose that creditor protection, so you gotta make sure your home is protected by homesteading it. Inappropriate titling of assets. People will buy a car. If you buy a car, the primary driver of the car should be the only owner of the car.

Don't put it jointly, 'cause it's gonna be easier later, 'cause that just opens up everybody to being sued if that car's in a wreck. Or having things joint tenants by entirety makes it less likely that those assets will be taken by creditors. Estate planning. So many people raise their hand that they did their estate plans, which excites me.

If you look at the data, there's all these different studies, but anywhere from 50 to 67% of people don't have estate plans. So you guys are doing better than average, which is what I'd expect. Now, I do not like using internet-based documents, and why is that? You guys, I have talked so much today.

It's been so fun and exciting. I'm losing my voice, so I apologize. I'm just gonna hold on to this. If I've had this happen two times now, how many of you have ever had a power of attorney document turned down by a financial institution? Right, and so the problem, they're very persnickety, and if you have done your power of attorney document through internet-based service, or through some legal Zoom sort of thing or whatever, how, who do you have to stand up for you?

Is it Mr. Google? No, nobody. And that's why, to me, it's really important for you guys to use real people to do your estate planning documents and your power of attorney documents, because if you get in trouble, and I've had this happen, I call up Mr. Attorney, and I say, Mr.

Attorney, bank is turning down this perfectly legal, valid power of attorney that you did, and he writes nasty gram to the bank. We will sue your butt off if you do not accept this. And what does the bank do? They accept it. So pay the couple hundred bucks to get a real power of attorney done, or the 1,500 if your situation's simple, it's more complicated, you're gonna pay more, pay the money to get good estate planning documents done.

Now here's the other big mistake. I think everybody says, oh, I left all this money to my children through my will. Well, how do assets pass? They pass three ways. First is titling. If you own something jointly with rights of survivorship, it goes to the survivor, right? It doesn't go through your will.

For your IRAs, life insurance, annuities, ideally you have beneficiaries listed. If not, they'll go through your will, but now you have probate issues. So ideally you should have beneficiaries to all these things. You should have all your copies of your beneficiaries on file, and you should understand how much everybody's gonna get.

Sometimes people have different beneficiaries on the documents than the way they're passing things through will, and they don't understand that people are gonna get different amounts of money. So make sure you understand exactly how everything is going to pass, and that everything is titled correctly. One other titling mistake I see.

People go to their estate planning attorney, and they create these beautiful trusts, and then they don't do anything with them. They forget to title the assets to the trust, and it doesn't, you don't have a trust. A trust doesn't work if you don't title the assets. So this is one big story.

Client of mine was gonna be the executor for his dad's estate, and his dad was 94. Dad, we knew, had a lot of money. We just didn't know how much, 'cause dad was very secretive, and he had done well, and he did not like financial advisors, because they were all schmucks, but son had no clue what his dad had.

I said, "You're gonna have a hot mess on your hands, "I promise you." So he told dad, "My financial advisor happens "to help make sure old people stay out of trouble. "She's not gonna charge you a thing. "She's just gonna do it as a learning thing for me, "'cause I need to understand what you have, "'cause I don't know what you have." He said, "Okay, bring her on," the 94-year-old did.

So I meet with him. He's very proud of how well he did. Six million dollars, that was his estate. Four million in taxable accounts, two million in retirement plans. He says, "I have done my trust." I'm like, "Oh, great, show me your trust." His trust, all his beneficiaries were his sons.

He left tiny amounts to his grandkids, and he left about, it was gonna end up being about two million bucks, half of the taxable estate to charity. Very charitable. And so I said, "Show me your assets." And guess what? He had 40 different stocks in street name. Do you guys know what that means?

At the actual holding companies. He owned them all individually. He still had some old stock certificates. That is an estate planning nightmare. Do I have an estate planning attorney in here? Is there, are there any? None, I'm sad. They will stand up and say, "That's a nightmare. "That's gonna be expensive probate, "hours and hours of work." And so it was not titled to his trust, so he'd have to go to probate to go to his trust.

So what are the mistakes there? Anybody shout out one big mistake you hear? Charities listed in trust? Oh, the IRA beneficiaries were his sons. So if the way he left it is the charity would get assets in the trust. Sons would get IRAs that have to pay taxes on them.

And so happened his retirement plans for $2 million. So what we ended up doing is we amended his trust to get, and it's all his grandkids were gonna get like 10,000 and we mine it in small amounts. And it's like, why are they even listed in the documents? And so what we ended up doing is had his trust redone, named his sons, the beneficiaries of the trust and made sure, and then we moved all those assets into a brokerage, all those stocks or industry name into a brokerage account titled to his trust.

And then we made the IRAs the beneficiary, the beneficiaries were the charities because the charities don't have to pay tax on the IRAs. So that saved that family about $600,000 in income tax. And oh, and by the way, the guys told me, we've got plenty of time to deal with this.

I'm gonna live till I'm 105. He died the year after we cleaned everything up. Family loved me. Now, so these are the things people don't know when you're a do-it-yourselfer and especially when you start getting too complicated. Investments, I've heard this in this room. So many questions are just like, you guys are doing a great job managing your investments, but too many people don't understand the goals for their money.

It's like, how much do you really need? Are you taking the appropriate amount of risk? It killed me in 2008, the number of people once 2009 hit that were aggressively invested because the stock market was doing so great and they had to un-retire. Those weren't my clients, by the way.

They became my clients after 2009, right? And so not understanding how much risk you can take in your portfolio that's going to keep you financially secure so you don't run out of money. Poor tax management, we already talked about. You know, people owning bonds in the Roths. I know you guys don't do stuff like that.

Please tell me no. And owning like REITs and taxable accounts. So we see a lot of unnecessary tax things in portfolios. Too many accounts, not simplifying. We already talked about the titling, not keeping up with basis. And again, not addressing cognitive decline. So I know none of you are going to confess if you do any of this, but if you do, you need to get help.

So when should you get help? Three situations. I call these the poop piles. I'm a doctor. I do talk a lot about inappropriate things. So Christine knows that. She's heard me talk quite a few times. Three poop piles are if you have a complicated financial situation, if someone is counting on you and you're the only one who knows everything going on, and if you're starting to slip.

And the problem is people who are starting to slip know they're starting to slip, but they think they're doing better than they're really doing. This is just a fact. So are you complicated? First off, what are your skillsets? You may be very good at investing, but maybe it's really hard to know everything.

Once you start getting a million dollars, two million dollars, which is what you need for a successful retirement for most people, I mean, as far as if you want to not have to just rely on social security, you can maybe manage those assets, but do you know how to withdraw them tax efficiently?

Do you have everything titled correctly? It's good to have somebody look from the outside, just make sure that you have all your ducks in a row, that all the puzzle pieces fit together, 'cause you don't know what you don't know. You know, like my client didn't know he made too much money to contribute to a Roth.

He had a lot of money too, so it was amazing. I'm like, whew. So consider getting an hourly planner just to look at your big picture. And I would caution you, I mean, the distribution, accumulation is easy. You guys know that. It's the distribution phase that can get a little challenging.

And so, yeah, you can learn it all. And I have clients, they could seriously be financial planners. They're so good, but it's really important to be smart and have somebody else looking behind you to make sure you know what you don't, that they can help you identify what you don't know during that distribution phase.

Now, if someone else is counting on you, I break this into two buckets. The spouse that have the skills. So, like in my family, who takes care of the finances in my family? My husband, 'cause I'm too busy, he deals with it. But I know everything going on. I know how to get in the accounts.

I do, I can look at our cash flow and stuff 'cause we use a portal. I can look at anything, anytime. And we check in to make sure I know how to log into everything. Especially with two-factor authentication in the phone, you guys need to know how to log into each other's phones.

I had one client that I went to their house, their caretaker that was paying all the bills, it was his sister, they were very close, and lo and behold, his phone, the only way you could get into it, and he had everything in two-factor authentication, was a thumbprint. I'm like, okay, you're on, and he was on his deathbed.

I was going, I mean, going to make sure we had everything titled up, I mean, tidied up. And I'm like, oh my God, we can't, we don't have your thumb when you're dead. So we were at last minute trying to, we had to get his phone to where his sister could get into it.

So it's those things you gotta make sure that every, there's somebody that knows how to get to your stuff. Now, if your spouse or the people looking after you does not have, don't have the skills, you gotta have still, you know, I call them yearly audits, at least once a year, check in and make sure they know how to at least get into everything, but have a good backup plan to also know how to take care of everything.

And I always make our spouses learn how to at least know what bills need to be paid, how to pay the bills, log into the accounts, and that they understand the very big picture of their investments and finances. You guys, I'm gonna be really cooked by tomorrow morning how much I've been talking to you.

So I might have to have Grand Marnier tonight to keep my throat going. So I, and I'm gonna, a quick story on this one. I had a client, and this is actually what sent me on this journey of having people plan for aging and serious health events. I had a client who had lung cancer, diagnosed in his early 50s, had a wife.

Wife was oblivious to anything, and he had a very complicated situation. And when he was diagnosed, he says, "Carolyn, I'm gonna beat it. "Doctor me knows the prognosis." You know, so I'm, say, helping him plan and not taking his hope away. I said, "You gotta teach your wife "how to like at least pay the bills." So he says, "I'm gonna do that.

"I'll make sure she knows how to pay the bills." I said, "Because at least when you're going "through treatment, she can lift some of the load." And she promised me that she would learn how to pay bills, 'cause I always talk to both clients. And so every month or two, I'd ask, "How's the bill pay come along?" And she would say to me, "He's getting really frustrated with me." I get a call from her saying, "Joe is in the driveway having a seizure, "and he won't go to the hospital." You know, 'cause he'd come out of the seizure.

And so I actually drive over there, and I know, because I'm a doctor, that his lung cancer's probably gone to his brain, 'cause that's why he's having the seizure. And I get over there, and he's in his office on his daybed, and he's rocking, 'cause he has a big headache.

And I'm saying, "You really gotta go to the hospital. "We gotta get you there." And I happen to see this pile of unopened mail on his desk. What was it? The bills. I said, "What are those bills?" I hadn't had a chance to get to them. They had not been paid in a couple of months.

I mean, this was a guy who was so on it. And so I'm like, "Whew." And so I said, "We're going to the hospital." Scooped up, got the wife, scooped up the bills. I said, "Get the checkbook." At least I knew she was on the checkbook. And so while we're in the emergency room, I am having her write out the bills while we're trying to get him settled.

And that shouldn't happen. And that's what put me on this mission. So last one, are you slipping? So with aging, we do face, our brain slows down a little bit. We can't make decisions as fast as we used to. But thank goodness, with aging comes wisdom. So most people are able to at least slow down, think through things, know what's not right.

But this is how fraudsters get to you. They prey on by pressuring you, trying to get you to make quick decisions, and operating on fear, which as you get older, you become more concrete in your thinking. It's easier to prey on your fear. So that's normal aging. About 12 to 18% of people over 60 develop what's called mild cognitive impairment.

That means you can function day-to-day, but you may need some assistive devices in keeping you from forgetting things like making lists or, you know, having reminders. So, and most people with mild cognitive impairment stay stable and do fine until they die, but 10 to 20% go on to develop dementia.

Now dementia, the risk of that doubles every five years over age 60. So people age 65 to 69, 3% have dementia. By the time you're over 90, 35% have dementia. Problem is, and I have dealt with this over and over, when you're in the throes of having mild cognitive impairment or dementia, you think you're better than you are.

And you may know you have dementia, and you do when you're officially diagnosed, it's devastating, but you think you're functioning, and you're not as well as you should be. And so it's really important to plan well in advance before the event happens. So what we actually do with clients when they're in their late 50s, early 60s, we have what we call an aging plan.

And it's where we go through what I call the four big things of aging. When, where are you gonna age? And when are you gonna move to where if it's no longer safe to age in place where you are? When are you gonna turn over financial decision-making? When are you gonna get help with healthcare decision-making?

And when are you gonna quit driving? Driving's a big one, isn't it? Now, when you do that when somebody's well, it takes the fear factor out, and 'cause nobody, they're not defensive, they're not worried, oh, they think there's a problem with me. When you make that standard process, it creates muscle memory for, oh, we talked about this.

And if you talk about it every few years, it makes it where people are more comfortable when the poop actually hits the fan, sticking with the plan of what you agreed on when you're in your late 50s, early 60s. And now that I've been doing this, I started that aging planning in 2009 after I had a big client event that it's like, well, we gotta do better planning for dementia.

And now I actually have had clients who've gone through the aging plan and now they have cognitive impairment or dementia. It has worked wonderfully. Now, it's still agonizing when you're diagnosed with dementia, and it's still painful, but everybody follows the plan. 'Cause part of that process is we also start involving the healthcare surrogates and the financial surrogates long before a need ever arises.

So what we do is if you are slipping, you always have a backup, you do yearly audits with your backup, and at some point you allow them to observe what you're doing, and you may wanna involve a planner. Now, when do you get help? Where do you get help?

So if you have financially adept children, and I met a couple, a mother and son here earlier just delighted my heart that he's actually getting, she actually made him come here, I think. But for families to start that financial education early and to start help getting the kids involved so they understand what they're gonna be taking over.

But, and then the other option is you have outside parties. I think of a financial planner as a quarterback to help with all the situations, and you wanna make sure that you have an accountant and attorney that understands your situation. The more people you have involved, the less chance something nefarious will occur because people have to stay on their P's and Q's when everybody knows what's going on.

So if you're using family members or friends, create transparency with everybody. So it may be one child in charge, but you wanna make sure that they're reporting to the other kids and the other kids know all the finances and they know the plan. Again, it reduced the chances of nefarious things, and it lets the other kids know that, hey, brother has it and he's doing okay 'cause we can see everything all along the way.

Make sure everybody's on the same page. So perfect example I had, I have one client, Boglehead, and he loves our passive investing style. His son-in-law, who's an amazing young man, still thinks he can beat the market. You know how you are when you're young. And I said to the father-in-law, my client, I'm a little worried that he might try to change what we're doing if something happens to you 'cause his client's getting really on up there.

And he says, "We're gonna have a conversation." So the three of us had a meeting, and my client basically said to his son-in-law, who's gonna be his financial surrogate, "Don't change anything I'm doing." And then the rest of the family knows that same thing. So we made sure everybody's on the same page, and the son-in-law said, "I promise I will never do that." And so consider also involving an outside party, like a financial planner, the accountant or attorney, to keep the peace.

Advisors, thank goodness things have changed so much from when I started. Make sure that you use a fee-only fiduciary. And for most bogey heads, you're gonna do best with somebody who's hourly or flat fee. Not a fan of AUM, of course, 'cause I don't think it's fair for people to have a lot of money.

And I don't think financial planning should be paid for based on assets. But more and more advisors are moving towards having financial planning fees with tiny asset management fees. Those may be okay. But for people who are just charging one, one and a half percent AUM, and they're doing financial planning under it, most of 'em are not focusing on the financial planning.

Where do you find 'em? These are all organizations that only accept fee-only fiduciaries. Make sure that your accountant and attorney will work with your financial planner. And the reason why is if they're not working as a team, then there may be holes that you can't identify. So if I have an accountant, I mean a client whose accountant or attorney won't work with me, I say, I don't really like your accountant or attorney, the fact that they won't work with me, so you either need to talk with them or we need to change.

And most often, they change. So that's a professional fiduciary. Some states have those available, like California. So if you don't have anybody else to help you, that's how you might wanna do it. And then finally, turning over duties. Especially do-it-yourselfers, it's such a sense of purpose and accomplishment when you're doing it yourself.

It can be devastating to all of a sudden just say, I gotta give this up. So you make it a transition. And I've already talked about that, but make sure, talk about it early and make that transition last as long as possible. So in summary, and I think we have five minutes for questions, biggest danger to financial well-being is not fraud or abuse.

Just a reminder though, 90% of financial fraud is done by friends and family. So that's why you need to have multiple people involved, but the bigger dollars are stolen by the other 10%, just so you know. But the biggest danger to your financial well-being is the person who fails to recognize that they have limitations and they refuse to get help.

Being a do-it-yourselfer is great as long as you plan for the day you can no longer do it yourself. And now we'll do some questions. Yeah. I'm gonna stand over here 'cause I know you're gonna use that microphone. - Thank you, Carolyn, that was great. One sec. Okay, now.

So let's do this lightning round style 'cause we have to get through a lot. So first question, how do you recommend handling a parent who is slipping cognitively who does not recognize that they are having the decline? - Well, again, the first thing is you should have those conversations long before they're ever slipping.

But once they are slipping, you have to remember there comes a point where the child has to be the parent. And you just have to say, I'm really worried about you. And I think that you may be having challenges and say, would you mind undergoing testing just to make sure there's nothing going on that we don't know about?

If you have objective testing saying you're fine, we're gonna feel good. If you're not fine, then we know we need to start putting in protections to help you. - Okay, great. Is there a particular age or life stage when DIY investors tend to make mistakes? I think I heard you say that we, the incidence tends to pick up as we age.

- Well, it starts to pick up more when you're moving from accumulation phase to distribution phase 'cause a lot more decisions need to be made. And usually that ends up being late 50s, early 60s. Some people are super smart and able to manage it. It just depends on the situation.

- Okay, several questions about how to find advisors. And you shared some tips, but one is what are the economics of financial or tax planners? It's hard to find a good fixed fee provider. Is that because it's less remunerative to charge that way? - Well, so this all depends.

I mean, I would ask people, how much money do you think a financial planner should make per year, right? I mean, there's a lot of responsibility there. And I know people who are cheap don't wanna pay anything, but you pay for what you get and you've gotta look for value.

To me, first off, make sure that they truly do comprehensive financial planning. That means the tax planning, the estate planning, and not doing the estate planning returns, but that they are estate planning documents, but that they'll work with your accountant and estate planner to make sure everything's going together.

That's number one. And most of the people that, there are a lot of people charging flat AUM that are doing that, but there's all these organizations I gave you, most of them are now, NAPFA has a lot of AUM people, but the rest of them are flat fee or are small AUM fee with flat fee or their hourly fees.

- Okay, this is a good question. What are the best ways to find a good tax planner if you don't have an accountant doing your taxes? And I would amplify that. Even if you do have an accountant doing your taxes, he or she may not be doing forward looking.

- Yeah, accountants aren't the best at tax planning all the time. A lot of them just like to do the returns. And plus they don't know your big picture. Yeah, the problem is tax planning can't be done in a void. Tax planning really comes into play with income planning and with your investment planning.

So it all fits together. And so what I would recommend for people who just want like a one-time thing, have a hourly financial planner, do a comprehensive financial plan. You're gonna pay a couple thousand dollars for that, but it can be invaluable to make sure that you're doing everything right and that they're identifying, not just the tax planning for that year, but making certain that you're thinking out for the next five to 10 years.

Problem with accountants is they love to save you taxes today but they're not always thinking about the tax planning for the future too. So that if you wanna continue to do it yourself along the way, that would be my suggestion for that. - Okay, and then a couple of small board questions.

When you said forgetting to homestead, I was like, what does homestead mean? So this is the question, it's not for me, but someone else. - No, that's all right. So every state's different, but homesteading means this is where I call home, this is my domicile, this is where I live.

And you can only have one homestead. And so some states homestead provides no protection, but most states it provides some protection and so it protects those assets against lawsuits. So just Google in your state, should I homestead my home? Some states it doesn't make a difference, but most it does.

- Okay, last question, another kind of small board question related to one of the mistakes you mentioned. You talked about that form 8606 that goes with the non-deductible IRA contributions. What is the preferred method to correct a missed or incorrect 8606? - The beautiful thing is you just have to file a new 8606 with your next tax return.

And then make sure for yourself and your own documents that you have everything to support what you put in that new 8606 and keep it straight going forward. - Okay, Carolyn, you are amazing. Thank you so much for being here to speak with us today. Thank you. (audience applauding) - I hope I didn't scare the hell out of everybody, but I hope I scared you a little to make sure that when it's time to get help that you guys really do get help.

(audience applauding) you