About The College Representation Podcasts
Sowing the Seeds of Financial Success
In this episode of our Shares podcast, host Lindsey Lewis, MBA, ChFC®, CFP® speaks with Valencia Gabay, program director for financial educational and wellbeing at The College and one of the many minds behind Know Yourself, Grow Your Wealth®: a non-credit certificate program that helps improve financial decision-making, increase financial security, and put into practice strategies to achieve financial goals. She discusses the ideas and goals behind Know Yourself, Grow Your Wealth® and how the program is fundamentally engineered to help learners take control of their financial future.
Also featured is Tony Sanchez, a community affairs specialist at OneAmerica Financial in Indianapolis and graduate of the program, to speak about the program benefits he has seen personally and in his capacity as a mentor for others.
Valencia Gabay is the program director for financial education and wellbeing at The College. With a dedication to fostering partnerships and guiding community engagement, she strives to enhance financial wellbeing for diverse populations. As an accomplished learning experience designer and academic professional, she excels in creating inclusive learning environments through a design thinking approach. An organizational leadership scholar, her research interests lie in humility and inclusive leadership practices that promote team resilience, creative thinking, and innovation within the virtual workforce. With over 20 years of experience in higher education, she has contributed significantly to academic literature and has shared her expertise on international platforms. Gabay is also the co-author of Group Coaching and Mentoring: A Framework for Fostering Organizational Change. She completed her undergraduate and graduate work at the University of Florida and is completing her doctoral studies in Organizational Leadership at Indiana Wesleyan University.
Antonio “Tony” Sanchez is a community affairs specialist at OneAmerica Financial. He serves on the community affairs team, helping run the groundbreaking Pathways Program which provides students in underserved areas of Indianapolis with journeys that build skills, connections, and a path to sustainable income through jobs, mentorship, and opportunities in the financial services industry. He is a former OneAmerica Financial intern and is now a OneAmerica Financial full-time associate. Before joining OneAmerica Financial full-time, he also worked as an accountant intern at Mutual Savings Bank in Franklin, Indiana. Sanchez graduated from Franklin College with two degrees in economics and has worked and volunteered at the Boys and Girls Club in Franklin.
Any views or opinions expressed in this podcast are the hosts’ and guests' own and do not necessarily represent those of The American College of Financial Services.
Tax Planning Insights
Learn About the Fundamental Principles of Tax Planning
In the financial services industry, and most other industries, the goal is to provide value to your clients. In today’s financial landscape, tax planning has emerged as a growing service. In fact, according to the 2023 Herbers & Company Service Market Growth Study, tax planning is the most demanded service among clients with at least $250,000 in household assets. As such, there has never been a better time than now for financial advisors to familiarize themselves with the key concepts of tax planning. Fortunately, The American College of Financial Services and tax expert Jeffrey Levine cover these key concepts in Principles of Tax Planning for Financial Advisors.
Why Should You Care About Tax Planning
As Levine points out, the ability to offer sound tax planning advice is a valuable differentiator. Clients are unique individuals, but they all share one common trait: “All clients have the common thread of wanting to pay as little in taxes as possible.”
In addition to guaranteeing that advisors have desirable advice that clients want, knowing the principles of tax planning offers several other advantages as well. Tax planning aligns the interests of the advisor and the client, creating a unified goal of minimizing tax liabilities.
Furthermore, being a strong tax planner offers a financial advisor a significant amount of market resiliency. Paying minimal taxes is a common goal regardless of market conditions, and by mastering these principles, financial advisors will have something to offer clients in any market.
Ultimately, financial advisors should care about tax planning because it is a universal goal shared by nearly every client in nearly every situation, regardless of circumstances.
Key Principles of Tax Planning
Levine goes on to dispel several tax myths and share key insights that are important for financial advisors to remember as they look to help their clients achieve their goal of minimal tax payments. Included amongst these topics are several of the following key ideas:
- Tax rate and tax bracket are not the same. Levine points out a common misconception in tax planning, stating that advisors can often fixate on what tax bracket a client is going to be in. However, as Levine states, “The tax bracket is just one of the components, if you will, that goes into informing what the client’s true tax rate is.”
- There is no such thing as permanent when it comes to taxes. When arguing this point, Levine begins by emphasizing how often tax law changes. Essentially, even laws stated to be “permanent” are only permanent as long as Congress doesn’t change their mind. For this reason, Levine believes that advisors must take advantage of provisions that exist today, because: “We don’t know how long it will stick around for. What’s here today should be used when we have that opportunity.”
- The lowest lifetime tax bill wins. Obviously, everyone wants to pay as little in taxes as possible. However, we all have to pay them eventually. Levine argues that instead of looking to pay the least taxes year after year, advisors should plan for their clients to determine their payment schedule based on rates, saying, “The name of the game is simple: Pay taxes when your rates are the lowest.”
By mastering these principles, advisors can help clients achieve lower lifetime tax bills and navigate the complexities of tax laws with confidence. Levine goes into greater detail on these ideas and more in Principles of Tax Planning for Financial Advisors, available exclusively on Knowledge Hub+.
To access this learning opportunity, visit Knowledge Hub+ and unlock the potential to transform your financial advisory practice today.
To learn more about the Tax Planning Certified Professional® (TPCP®) program, sign up for the program demo.
Register now for Jeffrey Levine's upcoming webcast, "Planning Strategies to Mitigate the Impact of the 10-Year Rule," on Tuesday, October 29, 2024, 2 - 3 PM EDT.
This live webcast is exclusively available on Knowledge Hub+. To register, access Knowledge Hub+ via your Learning Hub or learn more about Knowledge Hub+ and subscribe today.
More From The College
- Watch the Webinar on How to Integrate Tax Planning Into Your Practice
Retirement Planning Special Needs Planning Insights
Long-Term Care Trends and Strategies
According to the most recent iteration of the Retirement Income Literacy Study, a survey conducted by The College every four years to measure older Americans’ financial literacy in 12 knowledge areas related to retirement income, one of the top areas of concern facing Americans as they head toward retirement is paying for long-term care. A number of factors contribute to this, including cuts in Social Security, inflation, and the rising costs of healthcare.
However, despite their concerns related to long term care, many Americans have not reflected it when making their plans for retirement. In fact, a staggering nearly 80% of respondents did not have a plan in place to fund their long-term care needs. Furthermore, 60% of respondents stated they had not even looked into policies or explored their long-term care options. As a reminder, these respondents were between the ages of 50 and 75, meaning that three in five Americans between the ages of 50 and 75 had not even given serious consideration to their long-term care needs in any capacity.
Additionally, the study found that a significant number of Americans severely underestimated their need for long-term care, with only 44% of survey respondents expecting they would need long-term care as they grow older. In reality, Americans need some form of long term care at a rate of 70%. According to James Karthaus, CFP®, CLU®, ChFC® these numbers represent “nothing less than a crisis.”
“This is not an industry statistic. This is a governmental statistic, and it’s actually a little dated. … 70% of folks 65 and older are going to need some type of long term care service. … The average, not the high end, is three years. … 80% of folks don’t have a plan. To me, that’s nothing less than a crisis.”
- James Karthaus, CFP®, CLU®, ChFC®
In this discussion, featured in a recent webcast hosted by The College on their subscription-based learning platform Knowledge Hub+, Kaylee Ranck, PhD, director of research at The College, Karthaus, assistant professor of financial planning at The College, and Joellen Meckley, JD, MHS, ChSNC®, managing director of the American College Center for Special Needs and associate vice president of Centers strategy and operations at The College explored this disconnect between the average American’s expectations and the realistic need for long-term care, reviewed how exactly long-term care is defined, analyzed trends in the industry relating to long-term care, and discussed several real world examples relating to long-term care.
What is Long-Term Care?
In order to better understand the discrepancy between Americans’ expectations and the realities of long-term care, Meckley provided the audience with additional information as to what exactly long-term care is and how to determine if someone is in need of long-term care. According to Meckley, long-term care occurs when an individual needs assistance with two or more activities of daily living. These activities include:
- bathing
- dressing
- eating
- toileting
- transferring / mobility
- continence
Meckley also pointed out long-term care manifests in a number of different forms and the long-term care one person receives can look significantly different than what another individual receives. These different forms of long-term care can include in-home care, hospice care, and therapy, as well as others.
As Karthaus said, these different forms of long-term care are important to consider when choosing a policy that suits the goals of your client. “Make sure, if you do elect a policy, you’re meeting the clients in the space they want to be,” he said. “If they want to go to an assisted living facility, fantastic. Just make sure the policy that you’re paying for or having them pay for, can meet them where they want. If they want to be at home … (with) an unpaid caregiver, they need informal care on their policy.”
Trends in Long-Term Care
Karthaus went on to emphasize the importance of considering trends in long-term care and the history of different policies when electing the one that best suits your client. Karthaus offers comparisons between traditional long-term care insurance, hybrid policies, life insurance policies with long-term care access, employer-sponsored long-term care insurance policies, and others. Each of these has a variety of pros and cons, and he said it’s important to measure these when considering which policy is the best fit.
Meckley explained what happens when clients actually begin needing long-term care, indicating that many people seem to be unprepared for the experience:
“Only one in three … respondents to our survey knew that it was not true that Medicare would pay for a year of nursing home care. … That’s often shocking to people. So there’s a huge knowledge gap out there. And unfortunately, it’s not just with clients, it’s also within the profession.”
Meckley continued by discussing other issues people face when attempting to use long-term care benefits, warning individuals of the 90-day elimination period in which they are waiting on long-term care benefits to become active, issues brought on by inflation, and the likelihood that an individual in need of long-term care will likely see that need increase over the course of their life, thereby seeing an increased cost they may not be prepared to pay.
Want to learn more about this important topic? Watch Ranck, Karthaus, and Meckley as they discuss the importance of long-term care, different forms of long-term care policies, and the challenges that can arise within families as the need for long-term care arises. Meckley also offers case studies that can be used to apply this knowledge during the discussion, allowing for a more interactive learning experience. You can gain access to this informative discussion on Knowledge Hub+, now available for free to members of The College’s Professional Recertification Program and as an open subscription to others!
Representation Insights
18th Annual Conference of African American Financial Professionals to Focus on Expanding Our Collective Impact
KING OF PRUSSIA, PA – July 29, 2024 – The American College of Financial Services is proud to announce the 18th annual Conference of African American Financial Professionals (CAAFP) taking place from August 12-14 in Atlanta, Georgia. This year’s conference will center around the theme “Expanding Our Collective Impact” – a call to action for professionals to work together to advance strategies for economic empowerment that transcend generations, strengthen impact, and power transformational change.
“We are excited to bring together such a dynamic community of professionals to discuss and develop strategies that will have a lasting impact on our communities,” said George Nichols III, CAP®, president and CEO of The American College of Financial Services. "The Conference of African American Financial Professionals is an important part of The College's strategic focus on representation, with an aim to help support a vibrant profession well into the future, and narrow wealth gaps through financial education and deeper relationships between financial services and the clients and communities it serves.”
Since its founding, the CAAFP has served to advocate and advance the charge for increased representation of Black and African American professionals in the financial services industry. Keynote sessions will feature thought leaders from a variety of backgrounds in financial services, including:
- Raphael Bostic, President and CEO, Federal Reserve Bank of Atlanta
- Donna Brazile, Author, Political Strategist, and Chair of Fulbright Foreign Scholarship Board
- Michelle Singletary, Author and Award-Winning Personal Finance Columnist, The Washington Post
- And other special guests
There will be over twenty breakout sessions led by change agents and industry experts with a focus on empowering Black communities and the advisors that serve them. Attendees will have the opportunity to participate in three tracks, each designed to provide in-depth knowledge and practical strategies to enhance their practice:
- The Client Experience - Deliver exceptional client service with topics like how to speak to clients based on their needs, financial psychology, service offerings, and inter-generational planning.
- Scalable Business - Build a sustainable, scalable business with strategies for organic growth, identification of niche markets, when/how to hire, and Artificial Intelligence [AI].
- Specialization - Specialize in complex planning to differentiate yourself from generalists with topics like retirement income planning, insurance, philanthropy, tax planning, and wealth management.
"The CAAFP is an invaluable opportunity for African American financial professionals to gain insights and strategies that can elevate their practice and positively impact their clients," said Deborah Eskridge Glenn, MA, MSM, SPHR, SHRM-SCP, Interim Executive Director, Center for Economic Empowerment & Equality at The American College of Financial Services. "We are honored to host this event and to contribute to the collective knowledge and success of our community."
The CAAFP embodies The College’s commitment to inclusivity, engagement, and fostering shared experiences. With a focus on career pathways and advancement, our programming empowers attendees to thrive in the financial industry. These endeavors are integral to The College's strategic roadmap, as we strive to create a more inclusive and prosperous future for all. To learn more about the CAAFP and register, visit TheAmericanCollege.edu/CAAFP-2024.
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ABOUT THE AMERICAN COLLEGE OF FINANCIAL SERVICES
Founded in 1927, The American College of Financial Services is the nation’s largest nonprofit educational institution devoted to financial services professionals. Holding the highest level of academic accreditation, The College has educated over 200,000 professionals across the United States through certificate, designation, and graduate degree programs. Its portfolio of applied knowledge also includes just-in-time learning and consumer financial education programs. The College’s faculty represents some of the foremost thought leaders in the financial services industry. Visit TheAmericanCollege.edu and connect with us on LinkedIn, Twitter, Instagram, Facebook, and YouTube. Discover all the ways you can expand your opportunities with us.
Contact:
Sarah Tremallo
908-967-0381 / stremallo@jconnelly.com
Lindsey Allumbaugh
678-643-1310 / lindsey.allumbaugh@theamericancollege.edu
Retirement Planning Special Needs Planning Podcasts
Ensuring Equality in Retirement Planning
In this episode of our Shares podcast, host Joellen Meckley, JD, MHS, ChSNC® joins Ramsey Alwin, president and CEO of the National Council on Aging (NCOA), for a candid conversation on how older Americans – especially women – often face increasing financial challenges as they age. They also discuss new research from NCOA on economic stress among seniors and their caregivers, including saving for retirement, diminishing decision-making capacity, and more.
Ramsey Alwin is president and CEO of the National Council on Aging (NCOA), leading a nationwide movement to ensure equitable aging for every American. A seasoned thought leader and policy advocate, she designed a new measure of economic security for older adults that better accounts for out-of-pocket health costs and worked to introduce the Measuring American Poverty Act in Congress to redefine the federal poverty measure for the older population. Thanks to Alwin’s efforts, the U.S. Census Bureau formally implemented the Supplemental Poverty Measure nationwide, virtually doubling the elder poverty count and better demonstrating true needs among this population. She also led and organized efforts to enact state and local legislation and regulations that use the new measure of economic security when determining eligibility for means-tested programs.
Currently, Alwin serves on the executive committee of the United Nations NGO Committee on Aging, the America250 Health and Wellness Advisory Council, CVS Health Equity National Advisory Board, and the National Academy of Social Insurance Finance Committee. Alwin holds a Bachelor of Arts from Simmons University and a master’s degree from the McDonough School of Business at Georgetown University.
Any views or opinions expressed in this podcast are the hosts’ and guests' own and do not necessarily represent those of The American College of Financial Services.
Retirement Planning Research
Retirement: The Power of Tracking
If you’ve used a fitness app, you may have noticed that activity goal reminders motivate you to exercise. Reminders force us to make active choices. Are you okay with not meeting your step goal today? Have you exercised less this month than you did last month? Are your friends working out more often than you are?
Academics have generally embraced the power of doing nothing in 401(k) plans. The Pension Protection Act of 2006 increased the percentage of employees who sock money away for retirement at the default savings rate and 68% of employees now invest in target-date funds (ICI, 2024). Defaulting to passive savings means that more workers save and the least knowledgeable save more and earn a higher rate of return on investments than if they made active choices.1
A recent survey from the American College Granum Center for Financial Security conducted with AGEIST.com finds that people who track their health are also more motivated to save for retirement. This makes sense if the real power of tracking is that it forces us to make an investment in our ability to imagine the future and take control of decisions today that affect how long and how well we will live decades into the future.
Nobel Laureate Gary Becker (1997) believed that the time and effort we spend imagining how decisions today affect future outcomes is an investment. If we spend more time thinking about how our actions today impact, for example, how much money we can spend after retirement or whether we will be physically active in our 70s and 80s, then we can make better decisions about how much to save and exercise. Imagination is a resource that helps us make better decisions.
While imagination helps us recognize the future consequences of our decisions, we might forget about these consequences when we wake up in the morning and follow a routine that doesn’t include exercise. This is because the brain often operates in automatic mode where habits control how we spend much of our day.
Breaking out of habits requires conscious choice. This is where tracking comes in.
Using tracking devices forces a break in our habits. After we wake up and brew a cup of coffee, our tracker reminds us to at least think about going for a run. If you’ve built the imagination capital that allows you to recognize the importance of running today to increase your health and longevity, then you might decide to get some exercise. In other words, imagination capital alone isn’t enough to reach your goals. You need a tool that helps you change habits.
We all face a struggle between what we do today and what we want in the future. In economics, this is referred to as “time inconsistent preferences.” In other words, we may want to save more for retirement, but when we get to work, we don’t walk down to the benefits office to increase our savings rate. We might want to be healthier, but can’t resist choosing a burger instead of a grilled chicken salad at the cafeteria. Smart people who value the future recognize that they need a little help to make better choices in the present.
Effective trackers give us a short-term boost of positivity when we do something that helps us meet long-term goals. They might congratulate us for reaching our step goal or encourage friends to give us kudos for going on a run. The best trackers leverage the power of short-term emotion to motivate small behavioral changes that result in big, long-run improvements toward our goals.
Tracking progress in retirement can also give us a boost as we see our savings grow over time. The positive emotional response we get from seeing our nest egg grow can motivate us to save more. If we never check our balance, we may forget about the importance of savings and investing. Tracking can provide a short-term reward and remind us that we need to stay on track to meet long-term retirement security goals.
Do People Who Track Save More for Retirement?
Yes, quite a bit more. More than half of survey respondents who check their retirement balance daily (13% check daily!) save more than 10% of their income for retirement. Those who check their balance weekly or monthly were about 30% more likely to save 10% of their income for retirement than those who check quarterly or annually, and only 10% of those who never checked their balance saved more than 10%.
Save More Than 10% for Retirement
How often do you check your retirement savings balance?
Is tracking associated with taking the time to estimate how much savings is needed to meet retirement spending goals? Yes, more than 80% of respondents who check their balance daily, and 67% of those who check their balance at least every month have made the effort to estimate how much they need to save to meet retirement spending goals. Only 14% of those who never check their balance have estimated how much they’ll need to save to meet retirement spending goals. Those who track progress have also taken the time to imagine how much they will need to save to meet their future spending goals.
Have Estimated Savings Needed to Meet Retirement Spending Goals
How often do you check your retirement savings balance?
Those who track their retirement balance are also more likely to track their health. Tracking health using a wearable device (such as an Apple watch, Oura ring, Fitbit, etc.) is strongly associated with tracking one’s retirement savings balance. Both health and retirement savings are short-run behaviors that lead to positive long-term outcomes. It’s not surprising that those who make an effort to measure progress toward health goals also track progress in their finances.
Track Health Using a Wearable?
How often do you check your retirement savings balance?
Do those who follow a specific plan or health app save more for retirement? The results are striking – just over half of those who follow a specific workout plan or app save more than 10% of their income for retirement. Only a quarter of those who don’t follow a workout routine save at least 10%. Those who have created a habit of exercising have also made a habit of saving 10% of their income for retirement.
Save More Than 10% for Retirement
Do you have a workout routine?
Before diving into retirement planning as a math problem, it might be more important to help a client imagine how they’re going to live in retirement, what they hope to spend money on, and how this spending will open up opportunities for travel, moving into a dream home, or achieving financial security or a legacy goal. Conversations that build imagination capital can help individuals see how small choices today can lead to a better life in the future.
Likewise, people save more when they track short-term progress. Seeing one’s savings rise over weeks and months can trigger positive emotions and a feeling of accomplishment. In fact, there appears to be similarities in tracking health and the propensity to create specific short-term plans and saving more for retirement. Tracking motivates active choices in both health and retirement that lead those who value the future to be rewarded for making decisions in the present.
There may be a dark side of tracking that doesn’t show up in these results. In March 2020, workers who managed their retirement investments were far more likely to phone up their recordkeeper after the market dropped to sell stocks after they fell in value. Target-date fund investors were generally unaware of the drop and didn’t make a change in their investments. Access to an advisor, however, increased the probability of initiating contact and significantly reduced the likelihood of an ill-timed trade. If frequent trackers are more aware of a loss, they’ll likely benefit more from the counsel of an advisor who can help them manage their emotions and maintain savings habits to meet long-term goals.