Heart to Heart with Anna

End-of-Life Financial Planning: Considerations for the Members of the Congenital Heart Defect Community

January 28, 2020 Season 15 Episode 4
Heart to Heart with Anna
End-of-Life Financial Planning: Considerations for the Members of the Congenital Heart Defect Community
Chapters
Heart to Heart with Anna
End-of-Life Financial Planning: Considerations for the Members of the Congenital Heart Defect Community
Jan 28, 2020 Season 15 Episode 4
Laura Redfern, CFP®

Laura Redfern, CFP® earned her Certified Financial Planner™ designation in 2011, after working for over 10 years in the financial services industry.  Having a background in investment management and retirement planning, Laura was attracted to comprehensive financial planning and the opportunity to serve clients in a more significant way. 

Laura has a passion for educating individuals on financial topics and speaking in “real world” terms to inspire individuals to become confident in making financial decisions.  An experienced speaker and trainer, Laura has presented financial seminars at the American Business Women’s Association, Temple College and McLennan Community College.   

Laura has almost 2 decades of experience working with teachers, baby boomers and women to align financial goals with life values.  Laura’s mission is to reduce clients’ stress, make money meaningful, and take the fear out of finance.

In today's episode, Laura and Anna talk about end-of-life financial planning. Laura helps us understand if people in certain circumstances need to have special financial planning considerations and she talks about certain groups of people in the CHD community and how their plans may be (or may not be) different than the general public. Enjoy this informative program that busts certain myths about finance and provides a lot of information that can help anyone and everyone!

Here are some links we used in putting this episode together. While we found them helpful, we are not responsible for the content and recommend you seek counsel from your own professionals when actually planning your medical and financial future.

HSA (Health Savings Accounts)

Estate planning documents (select your state)

IRS Info on Medical Deductions

Medicare info, specifically on organ transplants

Medicare and Medicaid info and attorneys

Search for Medicare and Medicaid attorneys in your area, including reviews 

Info on CFP/why choose a CFP Pro/search for CFP in your area

Foundation for Financial Planning, Pro Bono resource

Article about free or inexpensive financial advice resources

Shadowridge FAQ page 

Living Will information 

Please take a moment to follow us on your preferred social media platforms:

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Facebook

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If you enjoy this program and would like to be a Patron, please check out our Patreon page

Show Notes Transcript

Laura Redfern, CFP® earned her Certified Financial Planner™ designation in 2011, after working for over 10 years in the financial services industry.  Having a background in investment management and retirement planning, Laura was attracted to comprehensive financial planning and the opportunity to serve clients in a more significant way. 

Laura has a passion for educating individuals on financial topics and speaking in “real world” terms to inspire individuals to become confident in making financial decisions.  An experienced speaker and trainer, Laura has presented financial seminars at the American Business Women’s Association, Temple College and McLennan Community College.   

Laura has almost 2 decades of experience working with teachers, baby boomers and women to align financial goals with life values.  Laura’s mission is to reduce clients’ stress, make money meaningful, and take the fear out of finance.

In today's episode, Laura and Anna talk about end-of-life financial planning. Laura helps us understand if people in certain circumstances need to have special financial planning considerations and she talks about certain groups of people in the CHD community and how their plans may be (or may not be) different than the general public. Enjoy this informative program that busts certain myths about finance and provides a lot of information that can help anyone and everyone!

Here are some links we used in putting this episode together. While we found them helpful, we are not responsible for the content and recommend you seek counsel from your own professionals when actually planning your medical and financial future.

HSA (Health Savings Accounts)

Estate planning documents (select your state)

IRS Info on Medical Deductions

Medicare info, specifically on organ transplants

Medicare and Medicaid info and attorneys

Search for Medicare and Medicaid attorneys in your area, including reviews 

Info on CFP/why choose a CFP Pro/search for CFP in your area

Foundation for Financial Planning, Pro Bono resource

Article about free or inexpensive financial advice resources

Shadowridge FAQ page 

Living Will information 

Please take a moment to follow us on your preferred social media platforms:

Apple Podcasts

Facebook

YouTube

Instagram

If you enjoy this program and would like to be a Patron, please check out our Patreon page

Support the show (https://www.patreon.com/HearttoHeart)

Laura Redfern:
0:00
There is no age limit on when you could hire a financial planner or potentially find that beneficial.
Opening Music:
0:07
Jazzy music.
Anna Jaworski:
0:12
Welcome to Heart to Heart with Anna! I am Anna Jaworski and the host of your program. Today's show is End-of-Life Financial Planning and our guest is Laura Redfern. We'll start today's program by learning a bit about Laura and asking some general questions in segment one. In the second segment, I'm going to ask Laura to help us understand if people in certain circumstances need to have special financial planning considerations, and in the final segment we'll talk about certain groups of people in the CHD community and how their plans may be, or may not be, different than the general public. Laura Redfern, CFP® earned her certified financial planner designation in 2011 after working for over 10 years in the financial services industry. Having a background in investment management and retirement planning, Laura was attracted to comprehensive financial planning and the opportunity to serve clients in a more significant way.
Anna Jaworski:
1:10
Laura has almost two decades of experience working with teachers, baby boomers and women to align financial goals with life values. Laura's mission is to reduce client's stress, make money more meaningful, and take the fear out of finance. Some of you may know that Laura is also a Hearts Unite the Globe board member. She's currently the secretary for the Board and is getting ready to celebrate her six-year anniversary with us in February, 2020.
Laura Redfern:
1:36
Yay.
Anna Jaworski:
1:37
I know that's so exciting. My loyal, longtime listeners, well, remember Laura from Season Eight when she came on a program with Heart Warrior, Austin Wilmot, to discuss insurance and financial planning for adults with CHDs. Welcome back to Heart to Heart with Anna, Laura.
Laura Redfern:
1:53
Thank you for having me, Anna. I always love being on your show.
Anna Jaworski:
1:56
Well, I'm happy to have you here because what we're talking about today is really, really important.
Laura Redfern:
2:01
Yes.
Anna Jaworski:
2:01
The information that Laura and I share in this show is not meant as medical or financial advice. It's for informational purposes only and for us to help you get a conversation started with your family and loved ones. Please contact your healthcare professionals. Please contact your attorney or CPA to get advice that is pertinent to you, but we're hoping that we'll at least plant some seeds to give you some ideas of what you can talk to them about. Now since you're my financial planner, I know the routine you use when you first meet with a client, but I'm not sure that all of my listeners have had the privilege of working with a certified financial planner like you. So can you tell our listeners why it might be a good idea for them to find a financial planner, whether they're parents, survivors, grandparents, are professionals working with adult survivors.
Laura Redfern:
2:54
Yes, Anna, many times what I do is to provide impartial third-party presence for people who are discussing financial planning. Because let's face it, financial conversations are tough. They're difficult, they are emotional, and anyone who tells you otherwise is probably not telling you the truth. So very often my work with couples especially involves simply being that impartial third party who can hear both sides and offer advice objectively. So that's one reason that you might want to have a financial planner. Another reason is, kind of obviously, if you need help planning your future. So very often we might have tools that we're not even aware of. Maybe things that we just didn't know existed. And part of what a financial planner does is to assess your situation and look at what resources might be available to you that maybe you aren't taking advantage of.
Anna Jaworski:
3:52
Sure.
Laura Redfern:
3:52
So that's a big part of why you'd hire a financial planner. And the last part is something that I'm actually working on now, Anna. As you mentioned, I have my certified financial planner designation, but I'm working on a new designation. It is called a certified financial transitionist. And that is equally as important. The planner designation helps us to communicate the financial tools that are available and that would be best used in certain cases. The transitionist designation works on the psychological and emotional components of what financial transitions look like. So I think both parts are very important and both parts are not often talked about. So you need to think about if you need help in either of those places, not just the money and making that work. But also in the psychology and having a thought partner to help you work through what could be some difficult situations.
Anna Jaworski:
4:48
Right. And I don't think there are many situations more difficult than dealing with life-and-death issues, which so many people and a congenital heart defect community are having to face. Whether it's surgery, whether it's being put on a transplant list, hospice. I mean we have very emotional issues that we're having to deal with. So are you ever too old or too young to hire a financial planner?
Laura Redfern:
5:15
I love that question! Somewhat obviously my answer is going to be "no." And the too old part I think maybe is obvious that you always have financial issues to deal with as an adult. No, you're never too old. But the too young part might be surprising to some people to hear. I really don't think you're ever too young either. For example, I have a client, believe it or not, who is 10 years old?
Anna Jaworski:
5:38
Oh my goodness.
Laura Redfern:
5:39
That is because she is a child model. She'll be the girl in the ad that's sitting on a bicycle or something like that. And from that she is actually paid money by the companies that take those pictures. So she has a salary, she has an income source. That means she qualifies for a Roth IRA. Of course it was her mother who approached me because she doesn't know what that is, but they were able to open up a Roth for her. And can you imagine the tax free income that she is compounding from 10 years old?
Anna Jaworski:
6:09
Oh my goodness.
Laura Redfern:
6:10
It's pretty awesome. So there is no age limit either on when you could hire a financial planner or potentially find that beneficial.
Anna Jaworski:
6:18
I think some people are afraid, 'Oh no, I waited too late!' and they're embarrassed to talk to a financial planner. Is that something that you deal with?
Laura Redfern:
6:26
Oh my goodness. And I see that all the time. In fact, even in casual conversation, when people find out what I do, they'll say, "Oh, you don't want to see my finances." And to me I think, 'Well, honey, if you have that attitude, probably you do need some help!' There is no judgment, at least on my part. When I come to a financial planning client, we all make mistakes. We're all human. We all have so much stuff, so much garbage, so much history that we carry with us financially and otherwise. And it is not my job to come in and tell you where things went wrong or went astray. It's our job together to cocreate something that will help to improve your situation.
Anna Jaworski:
7:10
Well I think a lot of people are not only embarrassed that maybe they've started too late, but also feel like there's no way I can afford to have a financial planner that's only for rich people. Can you address that topic?
Laura Redfern:
7:21
Oh, I'm glad you brought that up in it cause that's another myth that I love to bust. Yes. In the past probably financial planners were for those who had a lot of assets and something that needed to be managed. However, in today's reality we all have a financial life and there are programs - one of them that I'm very fond of sponsored by the Financial Planning Association or FPA - that offer pro bono services for those who need it. So there are free programs out there, Anna. For example, the FPA is heavily promoting their cancer program - that when a family has a cancer diagnosis, there are financial planners available who will help with this end-of-life planning for free. So there are resources that are out there and we'll include some of them, I believe in the notes.
Anna Jaworski:
8:12
Right. We'll put those in the show notes.
Anna Jaworski:
8:15
It's so nice to know that you don't have to spend a fortune to get your finances in order, and I think that's something that most people really don't know about.
Laura Redfern:
8:24
Yes.
Anna Jaworski:
8:24
Now I know you've been a financial planner for quite a while and you've even seen some of your clients retire. What's the most important thing a person can do so they have a healthy retirement?
Laura Redfern:
8:34
That's a great question. Yes. A lot of people are transitioning to retirement these days and the number one thing that I counsel my clients is to make sure that they have something to retire 'to.' So often the focus is on retiring 'from.' I'm going to get to leave my job; I'm going to get to get up whenever I want in the morning; and there can be a vacuum there that can be very unsettling and unsatisfying if there's not something to fill it.
Anna Jaworski:
9:05
Right.
Laura Redfern:
9:05
So having something to retire 'to' that will still get you excited to get out of bed in the morning is really important. To have a life's purpose outside of work that helps us as well to establish an identity outside of work because that's something that gets lost if you've always thought of yourself as an employee-of or a doctor or a nurse or whatever, that suddenly changes and you don't have that title anymore. You need to have another way of identifying who you are and why you're in the world. And that's very important.
Anna Jaworski:
9:36
And I think that's why it's so important to pick your financial planner carefully because hopefully you're going to have a longterm relationship with that person and they come to know you almost like a friend. And I think what you were saying about the psychology part of finances being just as important as the numerical part of finances, this all comes into play together, especially when you are planning to make it to retirement age.
Laura Redfern:
10:04
Absolutely. Because the interesting thing about the way humans work is that the drivers of our financial behavior are the emotions and the psychology. And that's why I thought it was so important for me to understand that side as well as the numbers side. So in talking about any transition, and especially retirement, to understand the psychological side of the transition and to know also that it's normal. A lot of people think that retirement is going to be a fairy tale and don't understand what's wrong with them when they retire and they have a feeling of dissatisfaction or even depression is quite common. There is nothing wrong with them. That's completely normal part of passage into a new stage of life like retirement. So having someone that can help to understand you, like you said, Anna, almost like a friend, but someone who also understands the process of that transition into retirement can be very helpful.
Anna Jaworski:
10:59
Right. I know that when Frank and I were working with you and doing our planning, we talked about the legacy that we wanted to leave and I feel like you understand, not only what we're doing today, but where we hope to be in the future.
Laura Redfern:
11:14
Absolutely. That's a big part of what a financial planner should do for you.
H2HwMichael:
11:18
"Texas Heart Institute were offering us a mechanical heart and he said, "No, Dad, I've had enough. Give it to someone who's worthy."" "My father promised me a golden dress to twirl in. He held my hand and asked me where I wanted to go." "Whatever strife or conflict that we experienced in our long career together was always healed by humor." Heart to Heart with Michael... please join us every Thursday at noon Eastern as we talk with people from around the world who have experienced those most difficult moments.
Disclaimer:
11:48
This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. The opinions expressed in a podcast are not those of Hearts Unite the Globe but of the hosts and guests and are intended to spark discussion about issues pertaining to congenital heart disease or bereavement.
Rejoiner:
12:09
You are listening to Heart to Heart with Anna. If you have a question or comment that you would like addressed on our show, please send an email to Anna Jaworski at Anna@HearttoHeartwithAnna.com. That's Anna@HearttoHeartwithAnna.com. Now back to Heart to Heart with Anna.
Anna Jaworski:
12:27
You should be able to find somebody who can either work at the level that you are able to pay and if you're not able to pay at all, there should be somebody out there who is willing to help you.
Laura Redfern:
12:41
Yes.
Anna Jaworski:
12:42
which just makes it even more imperative that everybody take care of their financial situation. The more you understand where your money is going and where you want your money to go, then the more control you have over that. And friends, that just opens up the whole wide world to you.
Laura Redfern:
13:04
It does and it makes you able to sleep at night as well. It really helps with a sense of security that - what they say "knowledge is power" and that's very true.
Anna Jaworski:
13:15
Yeah, so a few months ago I was at a conference in Houston and the conference was for adults with congenital heart defects and we were talking about financial planning for adults with CHDs.
Anna Jaworski:
13:27
I think this is a really important topic for us to address. So this segment is just going to be for adults with congenital heart defects in various unique circumstances. So let's start by talking about an adult with a CHD who has been told 'you're going to need a transplant.' Can you tell me what kind of financial planning a person in that position might need to think about?
Laura Redfern:
13:50
Absolutely. So the first thing that comes to my mind when I hear about a heart transplant would be insurance. So we'll talk about that right now.
Anna Jaworski:
13:58
Okay.
Laura Redfern:
13:59
So with insurance, one of the things that is available to most of us, pretty much all of us that are U.S. Citizens is either Medicare or Medicaid. And that's something you would want to familiarize yourself with to be aware of what might be covered under one of those programs, how you would qualify, how you would make a claim, all of the workings underneath those, those were created as safety nets but the U S government. Use them.
Laura Redfern:
14:26
Get educated on those and use them to the best of your ability. Now having said that, they are not simple or easy to navigate so it might really help you to find assistance with someone who's really familiar with those systems and how to use them. You can look at, for example, medicare.gov or you could even look up an attorney - usually is the type of person you'd want to help you with this question. There are attorneys that specialize in Medicare and Medicaid. And there are resources; you can search for them and read reviews about them before you even walk into their office. You can learn about their fees and so forth. There are a lot of resources out there for you to think about when you are facing this type of life situation. Another tool that's out there if you have an employer, not only looking at their health plan, which would be very important and what does your insurance cover or not, but also the HSA.
Laura Redfern:
15:22
This is a really powerful financial tool. It stands for health savings account was created several years ago. So some people are a little unfamiliar with it still, but many employers offer this now, and it is basically a medical savings account. So it's not insurance, but it is a savings account with a tax advantage, both to you and your employer. It allows you to save extra money for medical procedures. And here's another cool thing - you'd asked me about retirement earlier. With an HSA, it is intended for medical expenses, but when you turn age 65 you can actually access the funds that are in there free of penalty. So it becomes a supplemental retirement account as well.
Anna Jaworski:
16:02
Wow. So if you save $1,000 in a year and you only spend $500, the other $500 will stay in the account?
Laura Redfern:
16:11
That's exactly right. And that's why HSAs are wonderfully powerful tools.
Laura Redfern:
16:15
The early versions were more FSAs or other vehicles where you got to spend it or you lose it, use it or lose it.
Anna Jaworski:
16:21
Right.
Laura Redfern:
16:22
That's not true of an HSA. That amount stays in there and can stay in there so that you can use it for retirement or other things.
Anna Jaworski:
16:31
Wow. That is really, really good to know. So I have had some friends who have found out recently that their condition is terminal and then they end up on hospice. That means that they are expected to live for six months or less. If you were worried that you had a short time to live, what's the best thing a person can do to make the most of what time they have left while still being financially responsible?
Laura Redfern:
16:55
Oh, what a great question, Anna. So when you are facing this type of diagnosis, I think one of the most important things that you can do is to communicate.
Laura Redfern:
17:07
So I had a client in this situation. I think one of the best things that he did was he held a family meeting. He talked to his wife and children. He told them what to expect. Not only from a health standpoint and what his wishes were for the time that he had left, which was very important.
Anna Jaworski:
17:25
Right.
Laura Redfern:
17:25
But also from a financial aspect. So I was not at that meeting. I don't know what level of detail he got into, but if you were thinking about this, you could get into as much or as little detail as you would want to as you're comfortable talking with your family. Right. In other words, you don't have to tell everybody you are going to inherit $10,000 and you're going to inherit $20,000 you don't have to get into that level, but the most important thing to let your family know is where the important documents are and who to contact.
Anna Jaworski:
17:54
Yes.
Laura Redfern:
17:55
That's the biggest thing is just have a list. With our clients, we'll provide a checklist where they can write all of this in one place and provide this one page to their heirs. Again, it doesn't list out personal information. It just says if something happens to me, contact... And here's the number of my financial planner.
Anna Jaworski:
18:14
Right.
Laura Redfern:
18:14
Or my attorney or CPA.
Anna Jaworski:
18:16
Right.
Laura Redfern:
18:16
Just someplace they know to go because when that time comes, there'll be a grieving and you want to try to make it as easy as possible.
Anna Jaworski:
18:24
Exactly. And I know on the document that I put together, I put account numbers, I put the name of my service representative if I had a specific service representative, because that person was familiar with me and so it would be easier for my heir to know who to talk to. And I think that makes a huge difference rather than calling some home office where those people don't know who you are
Laura Redfern:
18:50
Or worse not knowing where the assets are!
Anna Jaworski:
18:52
Right.
Laura Redfern:
18:53
I have clients who will uncover a life insurance policy, but a year later, and it's not uncommon just for them not to know where information is and it's so critical for you to know where the information is. So please share that with your loved ones.
Anna Jaworski:
19:07
Yeah, I think that really does make a huge difference. And we actually have a link to a website that we'll be putting in our show notes for every state in the United States. Sorry to my friends who are overseas, although you might still be able to look at what we have available here in the States and modify it for your own country. But this has a dropdown menu for every single state because it is complicated. Every state has their own rules and that's why it really does help to talk to somebody like a CFP, like an attorney, because they know about the rules for your state.
Laura Redfern:
19:45
Absolutely. And don't assume that they're the same between different States. There's some big differences. So talk to an attorney in your state who knows what the rules are for that state.
Anna Jaworski:
19:54
Right. Now adults with congenital heart defects are living longer than they used to in decades past, which you know, I'm excited about since I have a young man who is now 25.
Laura Redfern:
20:04
That's a wonderful!
Anna Jaworski:
20:05
I know. It really is. So, many of our adults with CHDs are living to retire, living to see their grandchildren, living to have the same aches and pains those of us who don't have heart defects have!
Anna Jaworski:
20:18
And what that means is that a lot of them are living long enough to have, other surgeries, maybe not heart-related surgeries - maybe a knee replacement, maybe back surgery. So what kind of planning should somebody do if they know that surgery is on the horizon?
Laura Redfern:
20:35
So we've already mentioned the importance of insurance and we've talked about communicating with your family and I think that applies in this case as well. One thing to think about as well is to make sure that you have all of your documents in place. So we said, 'make sure that they know who to contact.' Well, also having documents in place really makes that so much easier on your heirs. What documents are we talking about? We're talking about not only a will, which most people are familiar with, but also having the powers of attorney in place. That would be a durable power of attorney for health care and a durable financial power of attorney.
Laura Redfern:
21:12
These are both very important documents that basically breaks down to who's going to make decisions for me if I am not able to make my own decisions or communicate my own decisions. And it falls into two camps. There's the financial decisions and then there's the healthcare decisions. These are two different documents. They could be two different people, but you need to have that stated in an official legal document for the people to be able to have the power to make those decisions for you and be able to execute what you would want to have happen.
Anna Jaworski:
21:44
Yeah, it's really, really important, especially if you have very strong feelings about being put on a respirator or getting a transplant or what if something happens? Because I know that people who have had open-heart surgery are more at-risk even if they are having a knee replacement.
Anna Jaworski:
22:02
Even if they are having something that is not heart-related. Anytime you have anesthesia or you're possibly put on a ventilator or some other kind of device, something could happen with your heart. And if you don't make your wishes known ahead of time, what if your family doesn't know what to do? You know they could make a decision that you would be very unhappy with later. So once again, I think it all goes back to what you said at the very beginning, Laura. And that is communication.
Laura Redfern:
22:32
Absolutely. Another thing that's really important for the listeners to know, Anna, is with all of these documents that can be drafted by an attorney, there's another document that you don't have to contact an attorney about and you probably already have somewhere that you need to update on a regular basis. And that is your beneficiary forms. So if you have any kind of 401k or insurance through your employer, somewhere you had to fill out a beneficiary form and put who gets that money or that benefit when you're not around.
Anna Jaworski:
23:06
Right.
Laura Redfern:
23:06
Keeping those updated is a big deal. Especially this year in January, 2020 they passed a new act. It's called The Secure Act was passed by Congress and it changed the rules a bit on how money is inherited. That has caused people to just take a look at their beneficiary forms and make sure that they are up to date. That's, I believe, imperative. You don't want to have someone on there that maybe the relationship has changed or I've even seen the person has predeceased them. Sometimes some people have put their parents and the parents are gone, so there is really no viable beneficiary on the account anymore.
Anna Jaworski:
23:43
Right.
Laura Redfern:
23:44
So updating your beneficiary forms is very important because many people don't realize a beneficiary form is actually called a 'will substitute.' So if you have that all of your money goes to someone via your will, but you have a different person named on your beneficiary form, guess what? The beneficiary form will supersede that. So make sure those are updated with what you intend and don't be blindsided thinking that everything will be covered under your will.
Home2night4ever:
24:21
Home. Tonight. Forever by the Baby Blue Sound Collective, I think what I love so much about this CD is that some of the songs were inspired by the patients. Many listeners will understand many of the different songs and what they've been inspired by. Our new album will be available on iTunes, Amazon.com, Spotify. I love the fact that the proceeds from this CD are actually going to help those with congenital heart defects. Enjoy the music. Home. Tonight. Forever.
HUG Message:
24:41
Heart to Heart with Anna is a presentation of Hearts Unite the Globe and is part of the HUG Podcast Network. Hearts Unite the Globe is a nonprofit organization devoted to providing resources to the congenital heart defect community to uplift, empower, and enrich the lives of our community members. If you would like access to free resources pertaining to the CHD community, please visit our website at wwwcongenitalheartdefects.com for information about CHD, the hospitals that treat children with CHD, summer camps for CHD survivors, and much, much more.
Anna Jaworski:
25:35
Well friends, we've already talked about financial planning for adults with congenital heart defects, but in this segment I want us to talk about two either groups of people in our community and special considerations for those groups. So let's start with parents, like me! Many parents of children with complex congenital heart defects are dealing with multiple surgeries, having to buy medications, paying for therapy. I mean we have so many expenses that a lot of people don't have money for savings and they're so concerned with day to day expenses we need to know - how important is it Laura, for them to be planning for their children's end-of-life care?
Laura Redfern:
26:16
And this is a tough conversation to have, Anna. Sometimes talking to a professional can be very helpful in guiding you through this emotional conversation.
Anna Jaworski:
26:25
Right.
Laura Redfern:
26:25
One thing to look for on this type of question, when there's so many expenses, is to be working with a tax professional. Someone like a certified public accountant, a CPA, to make sure that you are getting all the deductions for medical expenses that you are entitled to. And again, it can be very complex. So talking to a professional that can help guide you through this can be very helpful. I know that also people will think of, "Well gosh, I have to pay the CPA to do that!" But the CPA should help you to save more money than their fee would be.
Anna Jaworski:
27:00
Right, right.
Laura Redfern:
27:01
So that would be a first tip for a parent who's concerned about day-to-day expenses. Another thing that I've seen recently that's an interesting new development is a fundraiser for a child who was sick. Something like a GoFundMe. There are other ones as well. This is a really interesting tool that's kind of neat in the way that we are very social media based these days. You can get donations, you can get help from friends, even complete strangers sometimes, but the important thing to know about that, Anna, is that any money that comes through that type of gift is considered a gift by the IRS and therefore it is taxable income. That means that if you receive funds in this way, you should remember to set aside some for the taxes that will be owed on top of it, not to spend every penny that's donated.
Anna Jaworski:
27:51
Right, and I think most people don't even realize that, and it may not be the same way in Australia or Germany. I don't know how it works in other countries, but here in the United States, if Uncle Sam can get a chunk of your money...
Laura Redfern:
28:05
They will.
Anna Jaworski:
28:06
I know! If you know ahead of time and say you get $20,000 you might talk to your CPA or talk to your financial planner and find out a whopping 20% or 25% may be due in taxes.
Laura Redfern:
28:21
That's not uncommon.
Anna Jaworski:
28:22
Right. If that's true, then you take a fourth or you take a fifth of the money and set it aside. Don't think that the money will just magically appear.
Laura Redfern:
28:30
Yes.
Anna Jaworski:
28:31
You set it aside to begin with and then you're not in a hurt come April 15th when we all have to pay.
Laura Redfern:
28:35
Exactly.
Anna Jaworski:
28:36
Okay. That's really important to know, but I had a situation just happened with me recently that I think people might need to know about and that is that one of my plans that you helped me with was to prepay our funeral expenses. Frank and I did not want to have a regular funeral with a casket and all of that. So we decided to be cremated and it was my goal for us to go ahead and have all of that taken care of ahead of time so my sons didn't have to worry about that.
Anna Jaworski:
29:08
What surprised me was when I got all of my documentation and in sitting and talking with the funeral director, we discovered that by prepaying our funeral expenses, our grandchildren are covered should something happen to them.
Laura Redfern:
29:24
Wow.
Anna Jaworski:
29:24
I know, and here's the funny thing is I remembered way back when Alex was a baby and we were looking at very dire statistics for his survival. My grandmother took me aside and said, "Anna, if something happens, don't worry my funeral home, will take care of Alexander's burial" because my grandmother had also prepaid her funeral expenses.
Laura Redfern:
29:47
That's amazing. And you can imagine it's very rare that the funeral home would have to cover those expenses. So you can see why they can be generous in that type of offering.
Anna Jaworski:
29:56
Right. So I think this is something for you grandparents out there, if you're thinking, 'Well, should I do this? What's the advantage to me paying ahead of time? Why not just wait until I'm gone and let my heirs take care of this?' This is an advantage that I do not think is well known. I think it's something that's almost like one of those secret benefits. And so I think not only does this make it easier for your heirs to know, Oh, this is exactly what Mom and Dad wanted, but also to know that there's that safety net if something should happen to the grandchildren.
Laura Redfern:
30:28
Absolutely. That's great.
Anna Jaworski:
30:30
It goes back to communication again though, because your parents might have a clause like this and you don't even know it. So unless you're talking about this, having that discussion, you may not even know it. And this is something that might just alleviate some concern that people have.
Laura Redfern:
30:46
Yes, indeed.
Anna Jaworski:
30:47
Okay. So I went to a conference for adults with congenital heart defects; I keep talking about this (Dr. Lin, I'm promoting your conference in Houston!) And Dr. Lin also felt that talking about financial planning was something that was important to address.
Anna Jaworski:
31:04
But here's where I was surprised. A lot of the doctors in the audience actually admitted that they didn't have their financial documents in order. And these are people who see life and death all the time, but they're also people who are super duper busy. So Laura, why is it important for doctors, even young doctors, to consider hiring a financial planner?
Laura Redfern:
31:25
Well, in addition to the reasons we talked about at the beginning of the show, just why you would hire a financial planner, doctors, especially, have some unique financial situations that it would really help them to get ahead by speaking with a professional. Here are two that I'm thinking of right off the top of my head. Doctors very often, or anyone in the medical profession, has a lot of student loan debt coming into the profession.
Anna Jaworski:
31:49
Right.
Laura Redfern:
31:50
So a plan of how to pay off that debt and still have a great healthy financial life can really behoove you and your family in the long run if you're in that situation. I know that that's what you and Frank did Anna, and that's what's really helped you and your family on down the road through the years. The power of a plan is very powerful. Another thing that doctors have specifically is when you start out, you might be making a certain amount of money, but that money can increase the longer that you are in the profession.
Anna Jaworski:
32:22
Right.
Laura Redfern:
32:22
And you might quickly be out of the threshold for making contributions to tools like a Roth IRA. Very often I have clients who reach that ceiling much more quickly than they thought they would and then they say, "Oh, what do I do now?"
Anna Jaworski:
32:38
Right.
Laura Redfern:
32:38
If you're working with a planner who knows your situation, often you could do something about that. For example, a backdoor Roth IRA, we do them for our clients all the time. That can help you to continue to save money on a tax-free basis, which is pretty powerful and pretty cool.
Anna Jaworski:
32:52
Right.
Laura Redfern:
32:53
But if you didn't know that you might continue contributing and then be smacked with a penalty because you weren't supposed to, or you might know that and stop contributing and then not know you had other options that could still help you build your financial future.
Anna Jaworski:
33:06
Right.
Laura Redfern:
33:07
So I see that very often with people whose salaries will increase over time, is not knowing the maximums and not knowing the other things you can do after you reach those maximums.
Anna Jaworski:
33:16
And I'm sure that the laws are always changing.
Laura Redfern:
33:18
Yes.
Anna Jaworski:
33:19
That makes it so hard to keep up with.
Laura Redfern:
33:21
Yes, there are changes every year.
Anna Jaworski:
33:22
And this is why you have to have that continuing education.
Laura Redfern:
33:25
Yes.
Anna Jaworski:
33:25
Because this helps to keep you up to date. And I think that the doctors need to know about this. Really everybody, this is the kind of thing, it doesn't matter if you're a doctor or like my husband, my husband's a nurse and now he's an advanced practice nurse.
Laura Redfern:
33:37
Yes.
Anna Jaworski:
33:38
So like Laura said, we had extra school fees because he went back to school after he had been an RN to become a CRNA, so yeah, you can rack up a lot of school debt very, very easily. This time has just flown.
Laura Redfern:
33:51
It does! It always flies by when we get together.
Anna Jaworski:
33:53
I know and even though we're talking about a really serious topic, I really feel that this show is very empowering and it will give people an opportunity to know what words to use.
Laura Redfern:
34:02
Yes.
Anna Jaworski:
34:03
when they're talking to somebody about their financial plan and what some of the topics are. And friends, there will be a transcript so you don't have to worry about taking notes. There will be a transcript of this show to go along with it in case you're not sure what some of the words were that we said.
Anna Jaworski:
34:18
Let's end this segment by having you tell everybody how they can find out more about you or how they can contact you if they have some questions, Laura.
Laura Redfern:
34:26
Certainly. So it'd be easy to contact me via our website. That is shadowridgeinvest.com. I know that's a little bit long. That's the name of our company, my husband and I have a financial planning practice together. The name is Shadowridge and then the word is 'invest.' So shadowridgeinvest.com. You can read about us. You can also click on the contact tab and send me an email. We also have a great FAQ page, Anna, with questions about financial planning and investments and one of my favorites is questions to ask a financial planner so that you could go out with that armed very well in interviewing a financial planner should you decide to go that way.
Anna Jaworski:
35:07
And it really does pay, friends, to interview your financial planners.
Laura Redfern:
35:11
Oh, absolutely.
Anna Jaworski:
35:12
I went through three before I found Laura and the others just were not a good fit. This is somebody you want to have a longterm relationship with. When you interview them, you want to have a good feeling - not just you, but you, your spouse, anybody in your family who is going to be contacting this person. So don't make a hasty decision. Give yourself time and give yourself permission to interview several different people.
Laura Redfern:
35:37
Absolutely Anna because you want to have someone, as we said before, who's going to understand you, your values and understand how to help align your goals and your financial behavior with those values to help you be a thought partner in your financial decisions.
Anna Jaworski:
35:53
Well, thank you so much for coming back on the show today, Laura.
Laura Redfern:
35:56
Oh, it was a pleasure! I love being on your show.
Anna Jaworski:
35:58
Well, I loved having you and that does conclude this episode of Heart to Heart with Anna. Thanks for listening today. Please come back next week on Tuesday at noon Eastern time or anytime. That's the beauty of podcasts. You don't even have to come back on a certain day. Just go out and find us on Apple Podcasts or Spreaker or Buzzsprout or Stitcher. We're all over the place. Wherever you hear podcasts, you can probably find us. And remember my friends, you are not alone.
Conclusion:
36:25
Thank you again for joining us this week. We hope you have been inspired and empowered to become an advocate for the congenital heart defect community. Heart to Heart with Anna, with your Host, Anna Jaworski, can be heard every Tuesday at 12 noon Eastern Time.
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