In this episode of ThimbleberryU, we delve into the critical topic of safeguarding senior finances with Amy Walls from Thimbleberry Financial. The discussion highlights the importance of recognizing signs of financial exploitation among seniors and offers practical advice on how adult children can approach their parents about financial matters. We stress the importance of maintaining open, empathetic, and proactive conversations to prevent financial abuse and ensure seniors' financial well-being.

Amy starts by explaining the signs of financial exploitation, such as unexplained withdrawals, sudden changes in spending patterns, and alterations in legal documents. These warning signs might indicate someone is trying to gain control over a senior's assets. Isolation from family and friends, as well as the sudden appearance of new friends or caregivers with a strong interest in finances, are also red flags.

Approaching the topic with parents can be challenging. Amy suggests starting these conversations early, even before there are signs of trouble. Regular check-ins can help normalize financial discussions and reduce anxiety. Empathy is key—approaching these conversations from a place of care and support rather than control. Setting clear agreements about when and how to get involved can prevent misunderstandings and ensure everyone is on the same page.

For senior listeners, open communication with their adult children is crucial to prevent exploitation. Statistics show that a significant number of seniors experience financial victimization, and regular discussions can help identify and stop abuse early. Seniors should also ensure their wishes are clearly communicated to avoid misunderstandings and ensure their intentions are honored.

Amy provides practical steps for both seniors and their adult children to make these conversations more effective. Organizing important documents, developing a financial plan, and using technology to monitor accounts and automate payments are essential measures. Regular reviews with or without a third party can keep everyone informed and prepared for any financial or health emergencies.

As we wrap up, the emphasis is on the importance of technology and communication. Technology offers great tools for managing finances, and maintaining an open and ongoing dialogue is crucial for building trust and ensuring financial security. Amy encourages starting these conversations early and being empathetic and respectful throughout the process. For those needing assistance, financial advisors and lawyers can provide valuable support and mediation.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In this episode of ThimbleberryU, Jon “JAG” Gay and Amy Walls tackle one of the biggest fears for retirees: running out of money before they die. They delve into the critical topic of deciding from which accounts to draw money in retirement, illustrating the profound impact these decisions can have on one's financial stability.

Amy emphasizes that this concern often leads people to adopt an "ostrich" mentality, where they bury their heads in the sand to avoid facing daunting financial decisions. Jon adds that this behavior is a form of fight or flight, driven by fear and unfamiliarity. They agree that simply winging it can be a costly mistake.

We introduce a case study to illustrate these points. They discuss a hypothetical couple, both aged 60, with different types of savings: $40,000 in cash, $600,000 in taxable investments, $2 million in IRAs, and $200,000 in Roth accounts. They compare the financial outcomes of spending $85,000 versus $100,000 annually in retirement.

• For $85,000 in annual spending, the optimal strategy involves withdrawing 45% from taxable accounts and 55% from IRAs.
• For $100,000, the best approach shifts to 60% from taxable accounts and 40% from IRAs.

Deviating from these strategies, even slightly, can significantly impact financial outcomes.

• Using the $85,000 strategy for $100,000 in spending could result in $400,000 less in available funds by age 95.
• Using the $100,000 strategy for $85,000 in spending could lead to $300,000 less.

The consequences are even more dramatic when retirees choose to withdraw 100% from either taxable accounts or IRAs.

• Drawing solely from taxable accounts until depletion could result in $740,000 less by age 95.
• Withdrawing entirely from IRAs could lead to $1.5 million less.

We underscore the importance of dynamic financial planning, which involves regular reassessment of one's strategy to adapt to changing circumstances and ensure efficiency. Amy concludes by stressing that thoughtful distribution strategies are essential not only for maintaining financial stability but also for achieving personal goals, whether it’s enjoying life, covering unexpected expenses, or leaving a legacy.

For listeners seeking personalized advice, Amy encourages reaching out to Thimbleberry Financial for guidance tailored to individual circumstances.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In this final episode of our six-part series for tech professionals, we focus on tying together the various aspects of equity compensation. We recap the key points discussed in previous episodes, including ESPPs, RSUs, ISOs, and NQSOs, emphasizing the importance of strategic management to leverage these tools effectively.

We discuss the common pitfalls tech professionals encounter when managing equity compensation on their own, such as significant tax bills from incorrectly selling ISOs and inadequate diversification. Holding onto stock with the hope of future gains, only to see the stock price plummet, is a recurring issue. We stress the importance of understanding the tax implications and maintaining a diversified portfolio to mitigate risks associated with over-concentration in company stock.

Amy highlights that while tech professionals are experts in their fields, they often lack expertise in financial planning, underscoring the value of consulting financial advisors. Using tools like Excel and calendar apps to track vesting schedules and exercise options can help, but disciplined execution is crucial. We recommend leveraging digital tools to manage equity compensation effectively, but also emphasize the importance of human expertise.

Work-life balance is another critical topic. We advise setting boundaries and scheduling dedicated time for financial planning to prevent it from overwhelming personal life. For instance, Amy shares how she and her husband hold regular meetings to discuss financial matters, integrating this practice into their routine to ensure it doesn’t interfere with family time.

Lastly, we encourage tech professionals to balance their involvement in financial planning with delegation to trusted advisors. Staying informed and asking questions about their equity compensation strategies ensures they understand and agree with the advice they receive. We suggest working with advisors who specialize in tech and behavioral finance to align financial strategies with personal goals and risk tolerance.

In conclusion, effectively managing equity compensation requires a blend of personal involvement and professional advice. By staying organized, disciplined, and informed, tech professionals can maximize their financial opportunities while maintaining a healthy work-life balance

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

Today Jag and Amy delve into five common myths surrounding retirement planning. Amy, leveraging her 20+ years of experience as a financial advisor, deconstructs each myth, providing insights grounded in real client interactions.

First, they address the myth "I'll spend less in retirement," discussing how retirement often brings new expenses, such as travel, hobbies, and healthcare, which may not decrease spending as expected. While fixed costs like mortgages might end, discretionary spending and healthcare needs can actually rise.

The second myth is the belief that being debt-free in retirement equates to reduced expenditures. Amy explains that having low-interest debts like mortgages during retirement isn't necessarily bad if the returns on investments exceed the interest rates, emphasizing the importance of financial planning over simply clearing all debts.

The conversation then shifts to the effectiveness of employer-sponsored retirement plans like 401(k)s and 403(b)s. Amy argues that merely saving the maximum in these plans may not suffice for a comfortable retirement due to factors such as investment choices, duration of savings, and the timing of retirement, highlighting the complexity of retirement planning.

The fourth myth tackled is the idea of downsizing homes in retirement. While some may intend to downsize, Amy points out that emotional attachments and the physical demands of moving often keep people in their current homes longer than planned, complicating the downsizing process.

Lastly, they debunk the myth that taxes will be lower in retirement, with Amy warning that retirement income can trigger higher taxes and health insurance costs under Medicare's IRMAA surcharges. She stresses the importance of strategic financial planning to manage these potential increases effectively. Jag asks about the possibility of tax increases in the coming years.

Throughout the podcast, Amy and Jag emphasize that effective retirement planning requires a holistic approach, considering not only savings but also spending strategies, tax implications, and personal circumstances to ensure financial stability and fulfillment in retirement. They conclude by reminding listeners to consider retirement as a phase requiring its own unique set of strategies and preparations

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

Today, Amy Walls and Jag into the world of Non-Qualified Stock Options (NQSOs), a versatile form of equity compensation often offered to tech professionals. In our fifth episode of a six-part series, we explore how NQSOs, despite their simplicity in terms of taxation, require careful planning to effectively manage within one's financial portfolio.

NQSOs allow employees to purchase company stock at a predetermined price but come with no preferential tax treatment, meaning they are taxed as ordinary income upon exercise. This straightforward taxation can seem appealing, but it necessitates a keen understanding of one's tax situation, especially in pivotal life moments such as receiving a spouse's bonus or facing unemployment.

A key strategy in managing NQSOs is knowing when to exercise them to minimize the tax burden, particularly during years with lower income. However, it's crucial to only exercise options when the stock's market price exceeds the exercise price, ensuring a financial benefit.

Further discussing diversification, Amy emphasizes that once the stock is acquired through NQSOs, it should be treated like any other asset in the portfolio. The strategy here involves not just holding onto the shares hoping for appreciation but planning their sale to align with broader financial goals such as funding children's education, planning for retirement, or aiding family members financially.

Amy also shared a success story of "Emily," who leveraged her well-timed exercise of NQSOs to significantly advance her retirement plans and support her children's education, demonstrating the potent role these options can play in achieving financial independence and meeting family goals.

Conclusively, while NQSOs offer no direct tax advantages, their real value lies in strategic exercise and diversification, underscoring the importance of planning and professional guidance to avoid pitfalls and maximize potential benefits. Remember, it's not just about having the shares; it's about integrating them thoughtfully into your financial landscape to meet personal and familial aspirations.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

We dive into a conversation about embracing future life phases today on ThimbleberryU. Amy and Jag discuss the importance of planning for both financial and non-financial aspects of our future. Amy emphasizes the significance of visualizing and imagining the life we want to lead, pointing out that financial planning isn't just about money—it's about making our desired future a reality. This involves considering future expenses and the lifestyle we aspire to maintain.

Amy highlights the challenges people face when trying to envision their future, including fear of the unknown and the difficulty of imagining life changes. She shares personal stories to illustrate these challenges, such as her fear of financial independence after college (this contrasts with Jag's approach to college). We explore how different life stages, like becoming parents or transitioning to retirement, come with their own sets of fears and uncertainties.

The conversation then shifts to the importance of being clear about what we want in later life stages to avoid being unprepared financially. Amy stresses the value of having specific goals to motivate saving and planning for the future. We discuss how changing priorities or goals is natural and not problematic as long as there's a willingness to adapt and adjust financial plans accordingly.

Amy offers strategies for looking ahead and connecting with our future selves, such as setting aside time for contemplation, getting in touch with our values, and recognizing how today's choices impact our future. She shares personal anecdotes about preparing to enjoy activities with future grandchildren and the importance of taking care of oneself to maintain health and vitality in later years.

Finally, we touch on the concept of living in limbo and the stress it causes due to a perceived lack of control. Amy suggests finding at least one aspect of a situation that can be influenced or controlled as a way to navigate forward. And as a bonus, you'll hear a couple of Shel Silverstein references.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In the 4th of our 6-part series for tech professionals,we dive into the world of Incentive Stock Options (ISOs), focusing on how tech professionals can leverage them. Amy Walls from Thimbleberry Financial breaks down ISOs as a form of equity compensation, allowing employees to buy company stock at a favorable price, known as the exercise price. The unique advantage of ISOs lies in their tax treatment. If handled correctly, through what's called a qualifying disposition, the profit from the sale of these stocks is taxed at the capital gains rate, rather than the higher ordinary income rate.

Amy emphasizes the importance of timing for achieving a qualifying disposition. There must be at least one year between the grant and exercise dates, and another year between the exercise and sale dates, totaling a minimum two-year holding period. Failure to meet this timeline results in a disqualifying disposition, subjecting the profit to ordinary income tax rates.

Strategic planning is crucial for maximizing the benefits of ISOs. Amy suggests considering the market price when exercising options, as this can affect the alternative minimum tax (AMT). Exercising when the market price is low can minimize AMT, potentially leading to significant tax savings. She also advises against using shares to cover the exercise price, as this could lead to a disqualifying disposition.

Amy shares success stories of tech professionals who've strategically used ISOs to enhance their financial journey. One individual, referred to as Mark, meticulously planned his ISO exercises and holding periods, resulting in substantial long-term capital gains and contributing significantly to his financial independence. Another example involves Brenda, who initially hesitated to exercise her options during a market dip. However, after understanding the tax implications, she realized exercising more shares could save her $30,000 in taxes.

For tech professionals looking to incorporate ISOs into their retirement plans, Amy underscores the importance of planning and working with financial and tax professionals familiar with ISOs. Understanding the specifics of your company's ISOs and how they fit into your overall financial plan is essential. She also highlights the need to be aware of how shares will be treated at retirement, as some companies allow for continued vesting or immediate vesting upon retirement.

In summary, ISOs offer a valuable opportunity for tax-efficient growth and financial planning, but they require careful strategic planning and professional guidance to fully capitalize on their benefits.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

Today, we dive into the complexities of choosing funds in employer-sponsored retirement plans like 401(k)s and 403(b)s. Amy Walls from Thimbleberry Financial breaks down common misconceptions and essential strategies for fund selection. She clarifies that not all funds are created equal, debunking myths about choosing solely based on cost or past performance. Amy emphasizes the importance of aligning fund choices with individual investment objectives, risk tolerance, and the need for diversification across various asset classes.

Amy also tackles the topic of fees and performance, urging listeners to consider the value provided by a fund rather than just its expense ratio. A fund's net performance, after fees, is what truly matters. The conversation shifts to assessing fund performance, where Amy suggests using custodian-provided information and comparing it against benchmarks over various time frames. This approach helps in making informed decisions rather than chasing short-term gains.

The discussion addresses the risks associated with fund selection, including market volatility, inflation, interest rate changes, and the dangers of following unqualified advice from the internet. Amy advocates for a balanced approach to risk management through diversification and proper asset allocation. She also defends the use of target date funds, which can be a viable option for many investors, especially when other choices are limited or less appealing.

Finally, Amy advises on the frequency of reviewing and adjusting fund allocations, recommending at least an annual check-up to ensure alignment with one's financial goals and market conditions. This conversation underscores the importance of informed decision-making and seeking professional guidance when navigating the complexities of retirement fund selection.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.