I want to introduce Mike Piper. Mike, I think, needs no introduction. He is on our Bogle Center board. He's currently our treasurer. He's also just, as you would expect, a jack of all trades. So in terms of like making fixes to our Bogle Center website and managing the books for our group and being a wonderful speaker who we can call upon to address any number of topics, Mike is our guy.

So we are so excited to have him here. He's the author of several books, really helpful, shorter books, as well as the Oblivious Investor blog. Mike, come on up here. Thank you. >> So just like Christine said, a dynamic that's super common in couples is for one partner, one spouse to be the one who is primarily in charge of the financial decisions.

So they're the household's financial manager, essentially. And then the other partner is somewhat less involved with those decisions. And this talk is specifically for that less involved partner. And there are two reasons, really, why we wanted to have this talk. Reason number one is that even if you aren't the one in charge of this job right now, someday it might become your responsibility.

And most of the time when that happens, it's the result of the D scenarios, death, disability, or divorce, which, of course, aren't happy things. So we don't like to talk about them. But if that does happen, and this job does land in your lap, we want you to be prepared, rather than feeling overwhelmed or lost.

And when I say that we want you to be prepared, I don't just mean the John C. Vogel Center for Financial Literacy. I mean all of the people in this room who are the household financial managers. We, collectively, want you to be prepared, because this is a thing that we think about.

We worry about it all the time. This is one of the most common questions I hear from people is, how can I prepare my partner in case something happens to me? And the second reason why we wanted to have this talk, I often think of it this way. If spouse A is the financial manager, then spouse B's job, with regard to the finances, is to be the oversight committee.

And that is an important job. And I want to share with you just two quick stories to illustrate what I mean by oversight and how important that role can be. So the first story, this is a little while ago. I was at the climbing gym with a friend. And between routes, so this is basically during a break, he asks me, "Mike, what do you think about Tesla stock?" And so this is somebody who knows I work in the financial industry just sort of broadly, but we've never talked about any details, right?

So we've never talked about index funds or bogleheads or anything at all like that. So I just said something to the effect of, I don't ever buy individual stocks. I just use index funds. Are you thinking about investing in it or what's on your mind? What's going on here?

And he shares a little bit more information. And there's two super critical facts, it turns out. Fact number one about the situation is that he has already invested about half of the household's total savings in this one company's stock. Fact number two that I found especially noteworthy is that his partner, his spouse, she's got no idea.

She's completely unaware of the situation. And it wasn't because he was doing anything sneaky. Like that's not what this was at all. It was just that that's how they've divvied up the responsibilities in their household. She's delegated this job to him. He's in charge of the investing decisions. He made what he thought was a good decision.

And the result is that now she's exposed to this huge risk, not because of a decision that she directly made and she has no idea. And so that's one of the ways that oversight can be so valuable is that even if you're not the one making these decisions, you're still affected by them.

And so checking in every once in a while and just making sure that you have an idea of what's going on, because you might have some opinions about it, that can be a good idea. And the second reason that oversight is so important, mogul heads love to talk about investing, right?

If you're married to one, you probably know this. But sometimes we need to be reminded that investing is just one piece of financial planning. There's a lot more to it than that. And to share a story to illustrate this point, several years ago, I received an email from somebody who is a very regular poster on the forum.

So as of this point, he had already made thousands of posts. And if you read his writing, you can tell that he's super knowledgeable about a whole list of investing topics. So he can talk about asset allocation, mutual fund selection, rebalancing strategies, and just on and on and on.

And this email that he sends me, this is, by the way, the first one-on-one interaction I've ever had with him. So it's basically out of the blue. And it's a tax question. And he outlines the circumstances. And the very short summary is that he and his wife have been underpaying their taxes to the tune of like $20,000 to $30,000 a year for the last several years.

And he's just figured this out. 'Cause again, not a situation where he was trying to do anything wrong. They had just made a tax decision at the start of this period that they didn't understand the ramifications of. And so now they collectively owe the IRS a big pile of money.

And when I think back to that situation, because even though it was several years ago, it really struck me. What I see is this person who had put an enormous amount of time and effort into learning about investing, and studying investing, and discussing it on the forum, and sharing his thoughts.

And he just didn't put enough time into the other parts of financial planning. And so they made this big, costly mistake. And so that's what I want to do this morning. I want to go through the primary areas under the financial planning umbrella, and just give you a checklist of the most common, most critical items under each of those topics.

And the idea is that you can go over this together so that number one, if the person who is not the household's financial manager, if they become the financial manager at some point, they're better prepared. And number two, so that we can make sure nothing important is being left out.

So the first topic we have is cash flow. That's all of the budgeting-related stuff. Risk management, that's the insurance stuff. Investing, retirement planning, estate and charitable planning, education planning, so that's saving for college, and tax planning. And again, this is gonna be a checklist of the most common, critical items.

And to warn you, it's gonna feel a little bit like information overload, but I've got a few pieces of good news there. Number one is that these slides are already available on the Bogle Center website, so you don't have to remember all of it. Number two is that this job gets easier over time.

The more often you go over this together, the easier it is, because you only have to go over what's changed. And the other thing about this is that, for some households, maybe it makes sense to have the once-a-year money talk, where you just knock out the whole thing. I don't think that's very common.

What I see a lot more often, and this is what my wife and I do, is we have a once-a-month money talk. And so this month, we're talking about cash flow. Next month is the insurance stuff. Investing the next month. So it's just smaller, more digestible chunks, basically. So diving right in, in cash flow planning, the first question we wanna know is just how much are we spending every month?

And then how much do we spend every year? Because it varies from month to month, right? There's a lot of things that we only pay for once a year, certain insurance premiums, or maybe you take a vacation every summer. So if you just look at last month's spending and multiply by 12, that doesn't really tell you how much you're spending over the year.

So we wanna know typical monthly spending, typical annual spending. And what are we spending on? So we know this is how much we're spending, but if we categorize it, we're spending this much on housing, this much on groceries, this much on entertainment, and then does that align with our values?

Because sometimes when you take the time to actually break it down and see that order of which you're spending, most on this, next most on this, you realize that it makes a little bit of sense to scale back a little here so you can spend somewhat more there on something that you care more about.

And one last thing about spending that I always like to look at is subscription costs. 'Cause these days, everything's a subscription. I always think about, as a CPA, I use Microsoft Excel all the time. And when I started in this field, you would buy a copy of Microsoft Office, which you would install on your computer, and then you just had Microsoft Office.

And now you buy a subscription to Microsoft 365, and you pay for that every month forever. And TV's the same thing, right? You sign up for all these different streaming services, and I see this pretty often, that people will have maybe seven different services, and they're only using two of them.

So it makes sense every once in a while just to look at what your subscription costs are and see if there's anything we can cut out. Another important question still in the cash flow space. So this is specifically for accumulators, so people who are still saving towards financial independence and retirement.

What we wanna know is how much are we saving each month, and does that put us on track for our goals? So what evidence do we have? That's what we wanna see here. We wanna know, did we work with some financial planning software, or an actual financial planner, or at the very least, a spreadsheet analysis?

What evidence do we have to think that if we keep doing what we've been doing, we will end up where we want to end up? And for retirees, it's basically the same question, it's just kinda the flip side of the coin. Are we on the right track? Is the amount that we're spending sustainable?

And again, what evidence do we have? Was it a spreadsheet analysis, financial planning software? We wanna see something to back that up. Another important question that we wanna check off is that we have a sufficient emergency fund, and you'll often hear people say that three to six months of expenses is the appropriate size for an emergency fund, but in reality, it varies, because the biggest reason why people tap into their emergency fund is because they lose their job, and so you're spending from your savings for however long until you get the next job, and so the appropriate emergency fund size depends on your job.

So if you're a government employee in a very secure position, you can get away with a smaller emergency fund than somebody who is a software developer at a startup company. And the most extreme example of that is anybody who's already retired, they don't really have a risk of job loss anymore, obviously, and if their portfolio's already big enough to satisfy the spending, they don't really need an emergency fund.

There isn't usually a need to carve out a separate piece of it and just call it the emergency fund, the portfolio can just do that job. So that's it for cash flow planning, which was our biggest topic. Insurance is our second biggest topic. First question is simply, what types of insurance do we have, through which companies, and where can I find the details?

And with regard to this last question, where can I find the details, the ideal situation would be that you don't really have to think about it. It should be like the question of where's my toothbrush? Right, you know where that is without extra thought, and the reason that that's so important is that if you think about a scenario where you one day suddenly need to know is something in particular covered under our homeowner's policy, something went wrong that day, so it's probably a stressful day, and you don't need this to be another source of stress just 'cause you don't know where the information is.

And then the thing that happens in the insurance space sometimes is the two most common mistakes I see are number one, that people will simply not realize that there's a particular type of coverage that they should have and they don't have it, and the other one, relatedly, is that they realize that this type of coverage is important, so they have some coverage in that space, but they don't realize that it leaves something important out.

And disability insurance is the perfect example of both of these because this happens all the time, that young people who are still not even close yet to financially independent, they couldn't retire at all today, they very much are dependent on their job income, they don't have disability insurance, and that exposes you to a huge risk.

And I made an offhand comment last year, and immediately after that session, multiple people came up and said, "Oh yeah, I don't have disability insurance. "What do I do? "How do I get that? "What should I look for?" And so this happens all the time. And then relatedly, a lot of a common scenario is that people will know that disability insurance is important, and they'll know that they have coverage through their employer, and so they'll think, "Great, that box is checked off." But they don't realize that the employer coverage is short-term.

So maybe it only pays for three months or six months of benefits. And of course, if you think about it, there's a lot of disabilities that last a lot longer than six months, right? Some will last the rest of your life. And so it's important to have long-term coverage also.

And then the last thing I wanna touch on with regard to disability insurance is the definition of disability that the policy uses. Because some policies have what's called an own-occupation definition. That means that if you become unable to perform your own occupation, then your account is disabled, and you can receive benefits.

And that's a good thing. That's what you want to see in your policy. Not as good is an any-occupation definition. What that means is that in order to qualify for benefits, you have to be unable to perform any occupation. That's a much stricter definition, so it's much harder to qualify for benefits with that sort of policy.

And moving on, we have life insurance. Of course, we know that we need life insurance if there's anyone dependent on us. And do we have sufficient life insurance? And this is another case where people will sometimes know that they've got coverage through their employer and think, "Great, I've got life insurance.

"I'm good to go." And they don't realize it's just not enough coverage. Because the most common example that I see is that if you have coverage through your employer, the death benefit will be one times your annual salary. And if you imagine your spouse dying unexpectedly tomorrow and you receive one times their annual salary, that's not nearly enough to replace all of the income from them that you have been counting on between now and retirement.

So most people just need a lot more coverage than that. And then one last point about life insurance is that in some couples, one partner earns most or all of the income. And in that case, it can still be important to have life insurance on the other partner. And the most common example of that is the situation where spouse A has the job and earns the income.

Spouse B provides the childcare. And if you imagine that spouse B dies, the household's income isn't about to fall, but their expenses are going way up 'cause the surviving spouse now has to pay for full-time childcare, which costs a lot. And so even though the one partner isn't earning an income, they're still providing economic benefit to the family, essentially, and so we need that reflected in the life insurance coverage.

And then moving on, still in insurance, we have all the liability policies. So homeowners, renters, and auto policies. And we just wanna check every once in a while the coverage limits because sometimes the decision that made sense several years ago when you purchased this policy might not make sense anymore.

Something I see all the time is that people earlier in their careers, when they're more strapped for cash, they pick low coverage limits 'cause that's what makes the policy affordable. But now if you can afford better coverage, 'cause you've gotten some raises as your career's progressed, it makes sense to buy better coverage most of the time.

And then one more thing to check on is whether we have an umbrella liability policy. What that is, 'cause a lot of people don't, haven't even encountered that before, basically it's a policy that picks up where your other liability policies leave off. So if you get in a car crash and you're at fault and you get sued, your auto policy will pay up to the liability limit, and then if you have an umbrella policy, it picks up after that, basically.

And then the last question that we wanna go over when we're doing these insurance discussions is every year during open enrollment season, we want to just take a few minutes at least to look at the different health insurance options. Because the decision that you made last year, it might make sense to switch to a different plan this year.

And the most critical question there is what we expect our healthcare costs to look like this year. And to an extent, we don't know, but sometimes you do know, if for instance, you know you're gonna need a particular procedure this year and it's a costly one, it can make sense to pick the plan with a higher premium and the lower deductible and a lower out-of-pocket maximum might yield savings for the year.

So that's it for insurance. Now, the rest of the topics are somewhat faster. And investment planning is actually the fastest one. There's only a few boxes that we need to check off here, despite the fact that we talk about it indefinitely. And the first question is, is the portfolio reasonably diversified?

And all I mean here is that Tesla stock example. So if there's individual stocks in the portfolio, how much is allocated to the biggest one? And in my opinion, most people shouldn't own individual stocks at all in most cases. But if you do, we basically just want to avoid a case where if one particular company blows up, then our portfolio would blow up along with it.

We don't want that to even be a possibility. And then with regard to the asset allocation, so that's just how much is in stocks as opposed to how much is in fixed income, why did we pick that? What evidence do we have to show that that's a good fit for us?

And expense ratios. This is another one that Bogleheads will talk about forever. It's pretty straightforward. Basically, all it is is that funds that charge less to the investors typically provide better returns. So that's a pretty easy way to improve the expected returns from your portfolios, just switch from expensive funds to inexpensive funds.

And lastly, this is my favorite one. Could the portfolio be simplified? Because when I see people come in as clients, the situation a lot of times is that their portfolio is really just a collection of stuff that they've accumulated over 20, 30, 40 years of investing. And so they've got the current 401(k) and then maybe a 401(k) from the previous employer and maybe another one from the previous, previous employer and an IRA here and an IRA there.

And it's the same thing with the other spouse. And so there's a million different accounts. And in every account, you'll see eight to 12 mutual funds, maybe a couple individual stocks, maybe a bond or a CD. And if that's what the portfolio looks like, there's no way without some sort of assistance from software to have any idea what's actually going on at the overall household level.

And that's what we care about. We care about the overall household level because our goals exist at the household level. And so simplifying by combining accounts is usually a good idea. And reducing the number of holdings is also usually a good idea. And there's great studies from Morningstar, it's called the Mind the Gap Study, comes out every couple of years.

And it actually shows that investors do better with simpler funds. They make better decisions in terms of when they buy them. So target date funds, balance funds, life strategy funds, things like that. Investors do a better job with them because they just put money into them and leave it alone.

Whereas when investors have portfolios that are sliced and diced into a zillion different funds, it's really tempting to, this one hasn't been doing as well lately, so let's get rid of it, let's buy that other one. And most of the time when people make decisions like that, their timing is terrible.

So simplifying is usually advantageous if you can do it. Moving on, we've got retirement planning. And here the question, the first one is simply, what's our plan for when we plan to retire? And this is for the most part just an excuse to revisit the question that we addressed in cash flow, which is, are we on track?

Because that's something that we wanna be checking on at least pretty regularly. And then another topic that you don't really have to worry about until you're getting close to age 62 is social security. And the question there is simply, when should we be filing for benefits? Because you can start as early as 62, or age 60 if you're a surviving spouse.

But the longer you wait, the larger your benefit is, and so it's a trade-off of higher monthly income versus giving up income in the meantime. And so that's something you'll want to spend a little bit of time researching. And I gave a talk last year at this conference that dug into that, so you can look at that, it's on YouTube, it's free.

And do we know what we plan to retire to? This one's not financial at all, but it is the most important question on this slide by a mile. Because we're retiring from these jobs, but what are we retiring to? Because there's a good number of papers that I've found interesting, this is not my field at all, but in the field of psychology, showing that two of the things, these are not the only two things, but two of the things that people need to be happy, actually, sorry, happy is not necessarily the word that gets used.

It's often something like long-term contentedness, life satisfaction, rather than just a fleeting feeling of happiness, but two of the things. Number one is close personal relationships. That's a critical thing in order to be satisfied with our lives. And another thing is that you're doing something with your time that gives you a feeling of competency or mastery or identity.

And for so many people, their job satisfies both of those requirements, right? We've got friendships with people at work. Our job, we're good at it, and so it gives us some personal satisfaction in that sense. So we're doing something with our time that we find meaningful or fulfilling. And then when you retire, that goes away.

And so it's important to have a specific and explicit plan for these are the steps we're going to take to maintain our friendships and build new friendships. And this is what we're going to do with our new available time. Because if you just fill up all that time with Netflix, that's the recipe for depression, and so you need something better than that.

Now, estate and charitable planning, of course you might divide these into two separate monthly topics if you want to, whatever works for you. Estate planning, we want to know if we've checked the beneficiaries recently on our retirement accounts and insurance policies, right? So when you open an IRA or any similar account, you have to fill out that form that says this is the primary beneficiary, and that's who gets the money when I die, and this is the secondary beneficiary, and that's who gets the money when I die if the primary beneficiary has also died.

And the most common example if you're in a partnership is that you name the other person as the primary beneficiary, and if you have kids, typically the kids are the secondary beneficiaries. That's kind of the default assumption most of the time. But what happens sometimes is you've got mom and dad, they've got child A, child B, and then they have child C.

And when you have a new kid, maybe the first thing on your mind isn't signing into Vanguard or Fidelity or whatever and updating these forms, and so maybe you just forget. And then if the tragedy happens and mom and dad die in a car crash, and you've got child A gets half, child B gets half, child C, oops.

And that's not good. And so it's important to update these things every once in a while. Similarly, something that you see more often than you might expect is the ex-spouse or the ex-boyfriend or ex-girlfriend is the beneficiary on one of these accounts, and not because we're still close. It's just forgot to update it.

And that's not what you wanna see either. And then the other big thing here is our critical estate planning documents. So do we have a will? Do we have durable power of attorney for finances and healthcare power of attorney? And those last two documents are just the things that provide somebody else with the legal ability to make decisions on our behalf if we become incapacitated, so we can't make decisions for ourselves.

And then just like with the beneficiary designations, when's the last time we updated these? If you just had child C, that's time to update the will. Or if your sister is who you named as your power of attorney several years ago, and you had a falling out and you don't speak anymore, or maybe she's no longer living, it's time to update these things.

And then just like with the insurance policies, we want to know where these are. If they're physical documents, what drawer are they in? Are they in a safe deposit box? Where are they? Or if they're PDFs, what folder on whose computer or a shared Dropbox drive? Or specifically and exactly where are these?

And again, we want to know this answer without having to think about it. Because if you take a minute to imagine the moment in your life where you need to find your spouse's will, that's potentially the single hardest day of your life or the hardest week of your life.

And you don't want it to be made harder by the fact that you just don't know where the damn thing is. And so you want to know where all these documents are. And moving on to the charitable planning side of things. First question, would there be a more tax-efficient way to do the donating that we're doing?

Because if there is, then we can do more donating at the same net cost to us. And that's, you know, why not? And so there's a few things to consider there. Number one is what we call deduction bunching. This is a strategy where, let's say, you normally donate to seven different charities every year.

What if instead you made no donations for four years in a row? And then in year five, you made five times the annual donation? And the idea here is that then in year five, you get a really big deduction for this big donation that you made. And in years one through four, you use the standard deduction.

And it's not always going to work out. You have to do the math for your own family. But in a lot of cases, that results in net savings over the period. And then another option is donating appreciated shares. So there's three requirements here. Requirement number one is that this is an investment that you bought, and it has gone up in value.

Requirement number two is that this is something you own in a taxable account, so it's not an IRA. And requirement number three is that you have owned this investment for longer than one year. And if all three of those requirements are met, and you donate this investment to a charity, then you get a deduction for the market value rather than just the amount that you paid for it.

And you don't have to pay tax on all of that appreciation. And the reason that that's so good is that just compare that to the alternative where you sell this investment, and you pay tax on all of that appreciation, and then you write a check to the charity with what's left.

You gave up the same shares, and you just didn't get to donate as much. So donating appreciated shares can be a great approach. And then qualified charitable distributions. This also has three requirements. Requirement number one, you have to be at least 70 and 1/2. Requirement number two, it's money that's coming out of a traditional IRA.

And it has to be specifically a traditional IRA. It can't be a 401(k) or a Roth IRA. It has to be a traditional IRA. Requirement three is that it goes directly from the traditional IRA to a charity. When that happens, it counts as a QCD. What that means is two things.

Number one is that it's not taxable to you, whereas most of the time when you take money out of a traditional IRA, it is taxable. So this is some tax savings. And the second thing that it means is that it counts towards your required minimum distribution for the year.

So if you're of an age where you have to take RMDs, qualified charitable distributions are a great way to satisfy that requirement without incurring any taxes and also do the charitable giving that you want to do anyway. Moving on to our second to last topic is education planning. First question here, how much are we looking at in terms of price tag?

And if we looked at the different options, so four years of private university versus four years of state university versus community college for a couple of years and then a couple of years of state university, what are the actual price tags? Because until you have that information, you can't really make an informed decision.

And then you want to go to at least one college night or financial aid night at your child's school. Those are generally very informative events where they put you in touch with local resources, walk you through the FAFSA process, and there's a lot going on there. So it's valuable.

And a refunding of 529 plan. That's just a tax advantage way to save for college. And one caveat I always add there is that most families don't have enough income to fully fund the retirement savings goal and completely fund the college goal without taking on any student loans. And when that's the case, retirement saving has to be the priority.

Because even though the college costs are coming sooner, and it is a big price tag, and you love your kids, there's a critical difference here, which is that for college costs, there might be scholarships. There might be financial aid. There is no retirement scholarship. There's no federally subsidized retirement loans that you can just get because you asked for them.

And so if you only do one or the other, you want to prioritize saving for retirement. We also want to see, does our kids' school offer any AP courses? Those are just courses you take in high school that offer college credit. And the reason that that is so valuable is that tuition in many cases is based on the number of credit hours.

It might be a certain dollar amount per semester if you're taking 12 or more. And if you're taking nine or fewer credit hours, it's a much lower dollar amount. Or if you can even eliminate an entire semester, that's an enormous amount of cost savings. And have we researched scholarships, including from sources other than just the university?

And the way I often explain this is that we don't typically like to be lumped into groups. But now is the time to lump yourself into as many groups as you can. And what I mean by that is think about every way that you could be classified. So your ethnicity, your religion, where you live, what you do for a living, what organizations you're a part of.

And then think about the same questions for your child, because there might be scholarships for somebody in those groups. So take some time to think about all of those things that you could be called, and then do some research online to see what might be available. And then the last question, do we think our child would study for the PSAT if we encourage them to do that?

And the reason I mention this test in particular is that it's the one that is the initial hurdle for national merit scholarships. And those-- many universities offer super generous scholarships for national merit students. In many cases, full tuition. And so if you think your child would study for this test, it's worth buying a book on Amazon and encouraging them to spend a couple of hours a week for maybe a couple of months.

And I know that to a busy high schooler, that's going to sound terrible. It's going to sound like this enormous burden. But we're talking about 16 to 20-something hours total over their life. And the potential payoff is enormous. So if you think your child would do that with some encouragement, it's worth giving them that encouragement.

And moving on to our last topic, we've got tax planning. And there's way too many things that fall under this umbrella to cover all of them. So just a few of the most common ones. For accumulators-- so again, that's anybody saving towards retirement. Are we maxing out our retirement accounts?

And have we looked recently at the Roth first tax deferred question? Because in many cases, you might have made a decision several years ago that made sense at that time, but it doesn't make sense now. So if you've signed up for your 401(k) six years ago, but since then your income has gone up, or it's gone down, or you've gotten married, or you've gotten divorced, or you've had kids, or your spouse's income has changed, all of those things would change your tax situation.

And so the Roth first tax deferred decision that was right then should be re-evaluated. And then for retirees, it's the same question, but the other side of the coin. So here, instead of looking at which accounts we're contributing to, now we want to know which accounts should we be taking out of.

So if we need to spend a certain amount of money this year, how much of it should come out of taxable? How much of it should come out of Roth? And how much of it should come out of tax deferred? And the talk I gave last year also discusses that in depth.

Wade was also talking about it yesterday. And that is a topic where there's a fair bit going on, but the potential for tax savings is very significant. So it's worth digging into a little bit once you're approaching retirement. And is our portfolio tax efficient? And there's just two things that I want to mention here.

Number one is that we generally want the assets that grow the fastest in Roth accounts. Or rather, we want to fill the Roth accounts with those assets, because A, Roth accounts, if you meet the requirements, you never have to pay tax on the growth. And B, Roth accounts don't have RMDs, whereas tax deferred accounts do.

And so when you combine those two factors, if you could choose one type of account that you would want to grow the fastest, you would want your Roth accounts to grow the fastest. And so most of the time, you want to fill those with stocks. That basically just means you want a total stock market fund or international fund or total world or something like that in your Roth accounts most of the time.

And then in our taxable accounts, we basically just want to avoid anything that is going to create a lot of taxable income and a lot of tax costs every year. So a few things on that list are high-yield bonds, junk bonds, they pay a lot of interest. That means a lot of taxable income and a lot of taxes, so we don't want them in a taxable account.

Mutual funds with high turnover, because whenever a mutual fund sells something within the portfolio, if it sells it for a gain, you have to pay tax on that gain. So even though you didn't sell something, the fund sold something, so you have to pay taxes. And the more turnover there is, the more often you have to pay those taxes.

And then real estate and investment trusts, REITs, those are just stocks in the real estate industry, and they're a perfectly fine thing to own, but if you own them, you want them in a retirement account, because in a taxable account, the problems are that number one, they pay more dividends than most stocks do, so more taxable income, and those dividends are taxed at a higher tax rate than most dividends, so we don't want REITs in taxable.

And then the last question under tax planning is Roth conversions. Would those be useful either this year or in the near future? And a Roth conversion is really just when you move money from tax-deferred over to Roth, so we're taking it out of a traditional IRA and moving it into a Roth IRA, and when you do that, you usually have to pay tax on that money, the money that you've converted.

And the idea is basically that we're taking advantage anytime that you have an unusually low tax rate. So the most common example is you've retired, so your income has gone down because you're no longer working, and you haven't yet started receiving Social Security, so you have a temporarily low level of income, which doesn't necessarily but usually means a temporarily low tax rate, so the idea is we're gonna take advantage of that low tax rate, move some money over now, pay tax at that low tax rate, and then it's in Roth going forward.

And the other common examples, less common but still important to know about, are if you ever have an unpaid sabbatical, or if you ever get laid off for part of the year, so reasons why your income for that year would be unusually low, that's a good time to think about a Roth conversion for that year.

It doesn't necessarily mean it's a good idea, but it's worth considering. And so that is the entirety of the checklist, and unfortunately, that's still not super-duper comprehensive. There could be other things that are important to your family, and so this is something that we're gonna have to adjust over time.

But fortunately, as you probably noticed, there's probably some things that aren't relevant to your family, right? Maybe your kids are already finished with college, so we don't really need to worry about the education planning anymore. And again, I think that for most families, what's going to work a lot better than trying to just pound out this whole thing, start to finish in one day, is smaller, manageable chunks.

So going over this with your partner once a month. This month, we talk about cash flow planning, and we make sure that we have a big enough emergency fund. We look at how much we're spending every month. Next month, we go over insurance. We make sure we have disability insurance.

We make sure that that includes long-term disability, and we look at the definition of disability, own occupation versus any occupation. The next month is investing, and you just, one month at a time. And it does get easier over time, because you really only have to address the things that have changed since last time, for the most part.

And again, the goal here is so that both spouses can get involved. So that if the one who is not the household's financial manager becomes the financial manager, they're better prepared to take on that task. And number two, so that in the meantime, that person can be providing some oversight.

Because I can tell you from experience that if spouse A is the one who is supposedly taking care of all of the financial planning topics, sometimes something gets left out. They're doing their best, they're making a very good effort, they're researching all of these things, but sometimes something gets left out.

And so having the other person check in on a regular basis with an actual checklist and say, are we taking care of this and this and this, that can be extremely valuable. So that's really all I had. And I think we've, yeah. Got some questions, okay. Ooh, all right.

Question, is counseling the only option when the reluctant spouse refuses to engage on this topic? Woo-wee! (audience laughing) All right. Getting serious. I don't think so. I think it's not necessarily a bad idea. And so yesterday I did mention, in one of the sessions, you might not have been there, but I did mention counseling.

And I don't, I'm not joking about that, by the way. I mean this very seriously. Most of us benefit from counseling at some point in our lives, because most of us aren't gonna have perfect mental health from the day we're born until the day we die. It's just like physical health care.

We need mental health care at some point. It's valuable. And so we joke about it also, 'cause it can be funny, and it maybe makes us uncomfortable, but I'm not joking, it's worth doing. That said, it's not the only approach. And I think that what I'm talking about here, the oversight committee idea, to let you in on the secret, that can be a bit of a hook, right?

That's what we're trying to do. Give this person a job, right? Something that shows them that they're valuable. And it's not a trick. It's not tricking them into thinking they're valuable. They are, because I can tell you, so I'm a CPA, I've been in this field since the day I graduated, and my wife is a software developer.

Before that, she was a food writer. Before that, she was a court advocate for domestic violence victims, and her degree is in criminal justice. So nothing related to personal finance in the entirety of her education or career. And when we go over these things, all the time, she's got valuable input, things that I didn't think of.

And I think the reason for that, and I see this, by the way, working with clients anytime I'm sitting with a couple, 'cause most of the time there is the one spouse who's super-duper raring to go, and the other one who doesn't say as much. But when that spouse who doesn't say as much does say something, every time it's critical.

And I think the reason is that those of us who spend all of this time thinking about the financial stuff, that's what our head's filled up with. And the other person has more space in their brain for all of the other things going on in life. And all of the financial decisions that we make are not just financial.

They're part financial and partly about the other things that are going on in our life. And so this comes up all the time. You'll see, we're doing some retirement tax planning and talking about taxable income and all the things we can talk about. And then the one who's less talkative, the spouse who's less involved, will say, what if your dad ends up living with us?

And just brings up a whole thing that hasn't even been considered, and boy, that's important. We need to talk about that. And that happens. So we're not tricking them into thinking that they're valuable as the oversight committee. They are. If you haven't gotten their input yet, you're missing out.

So that's what I would encourage you to do, is try to empower them in that role, because it really is valuable. Is there anyone who does not need umbrella insurance? How about if they don't own a house or car? That's a good question. So if you don't own a house, you're probably a renter.

Hopefully, you have renter's insurance. And you can still incur some liabilities in that way, if someone comes over to your home and they get injured, they can sue you. And so renter's insurance can cover that, and then umbrella could pick up from there. But there are certainly households where it's less critical.

I will say about renter's insurance-- or not renter's insurance, although also renter's insurance-- but umbrella insurance is not very expensive. If you're looking at long-term care policies or health insurance, those are really expensive. And so you might be expecting this huge price tag. Umbrella policy is not that expensive.

So before saying I don't want that, at least go find out how much it would cost, because it might be less than you're thinking. Any recommendations on personal software planning tools for DIYs? This is one I struggle with, because the software that I use is advisor software, and so it's expensive.

It's priced for advisors. It wouldn't make-- I pay like $3,000 a year for one of them, and probably, I think, $1,500 a year for the other one. And so if you're a DIYer, it wouldn't make sense to pay for that. And because I'm happy with that software, I then don't spend a million hours test driving all of the other softwares.

I can tell you, though, what I hear good things about. So this is second-hand information, but I hear good things about New Retirement. Steve, are you here? OK. Well, Steve, he's a bogel head. He's been here this weekend. And he's the person-- there's a team of them, but he's the owner of the company.

And he's involved in this community and listening to your feedback. He cares about what you think, and they're constantly building out new things. So I can't personally say I've used it, and oh, it did all these great things, and it was perfect, but I hear good things about it.

And it is getting better over time, because they're actively working on it. Another one that I hear good things about most of the time, although I did hear somebody yesterday who wasn't thrilled with it, is Maxify Planner-- M-A-X-I-- Maxify-- M-A-X-I-F-I Planner. And that's from Lawrence Kotlikoff, who is a super knowledgeable social security expert, as well as just broadly retirement planning expert.

So that's another great piece of software. Pralana Gold-- that's P-R-A-L-A-N-A-- gold, as opposed to bronze or silver. That's an Excel-based program. And again, these are just-- I hear good things about them. I haven't tested them in any serious way. So those are the three that I hear the most about.

Wade yesterday mentioned one that I've actually never even heard of-- Flexible Retirement Planner, something like that. So that might not be the exact name, but I'd do a Google search. I bet you can find it. "How do you know how much life insurance you need?" Good question. So question number one-- is there anybody dependent on you for income?

Because if there isn't-- somebody who's early in their career, they have no kids, and they're not married or anything-- zero is the answer, because nobody's going to be hung out to dry, so to speak, if you die unexpectedly. Similarly, if you are already financially independent, unless you have a pension without a survivor benefit, then again, nobody's hung out to dry if you die unexpectedly or expectedly.

And so it depends on-- basically, we want to look at the needs of other people that would go unmet if you died tomorrow. That's the driving factor here. And so how far are we from financial independence? Because if you're almost there, a smaller amount of life insurance is totally reasonable.

If you're 24, and you've got a brand new baby, that's going to be a lot of costs that need to be covered. So life insurance depends on, basically, the needs that would go unmet if you were to die and didn't have life insurance. What advice do you have for those who overfunded their 529 plans?

Find somebody else who is planning on college education is basically the answer. And that's not a joke, because you overfunded it. Probably what that means is that you have more in there than your kids needed. There's a good chance there's going to be grandkids, or great nieces and nephews, or whoever.

Somebody else you love and care about who you wouldn't mind paying for their college costs. Or actually, even yourself, if the idea of studying whatever sounds appealing, you can pay for yourself with a 529 plan. 529 plans can now be used to put money into a Roth IRA for a person who is a beneficiary of the plan.

A couple tricky things there is that there's a dollar limit. And in order to qualify, the person needs to be eligible to contribute to a Roth IRA anyway. So basically, this can just count as the contribution for the year if they're allowed to do that. So that's something to look into, certainly.

But if you're looking into it, really, really look into it to make sure that you don't overstep the rules, basically, is what I would say. Estate planning. How about joining the military out of high school or joining ROTC in college? Oh, education planning. Sorry, not estate planning. I was trying to figure out the-- that sounds morbid.

OK. Woo! Oh, gosh. All right, education planning. You know, that, honestly, is something-- I don't have a lot to say. I don't have personal experience with either of those things. So Anne Garcia, maybe-- she's the college savings expert. I don't know if she's in the room right now. But I would bet that she would have a lot better information than I would have on those topics.

And that's the last question. I think we're out of time. So thank you.