The long-term care insurance market is a hot mess. Early on they got the pricing wrong. The thought was people would only need it for a few years or pass away before needing it. WRONG. Not only were early long-term care policy holders using the insurance, they lived for years and years. So the insurance companies had huge payouts they had not anticipated. Here we are now and many people are experiencing steep hikes as the market tries to correct the pricing. I’ve talked to seniors who have policies and got notices for price hikes of 20%, 30% and even 50%. If they cancel they lose all that money. If they keep the policy they are paying out the nose. Many end up reducing the benefits, so that they can afford the price increases. There are some hybrid policies that make it more affordable but the coverage periods are limited.

At your age, you may be too early for it, assuming you stay healthy. I would go over this with a financial planner to determine if it’s right for you.

It’s all about your risk tolerance. Being in all equities right now will try your patience and sanity. Can you sleep during periods when the market bounces in and out of bear territory?

Most experts, suggest you still have some bonds even in your younger years. You want balance. And what that balance will be will depend on how much risk you can stomach.

This is always a hard question for me. I know many people struggle to make ends meet, so perhaps they didn’t have much left to save for retirement. Or, let’s be real, they had the money and made poor decisions. Or, just didn’t know how to save. If you face living just off Social Security, and that’s not a lot (about $1,700 a month as of Dec. 2022), you have to rethink your retirement. First look for ways to reduce your biggest expense – housing. Can you live with someone or get a roommate? Can you move to a less expensive area? If you are able, can you work full-time or part-time? Or, if you can, can you delay retiring until you’ve been able to save a little bit more. Look at all your expenses and see where you can cut. Be sure to tap all the state and federal resources available.

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What are your thoughts on long term care insurance? I am 47 and my husband is 50 and are getting more serious about preparing for retirement.

I love your work by the way! I was a Color of Money chat fan for many years and miss them!

I get this question a lot. Here’s my philosophy based on working with hundreds of folks in debt. Yes, your priority should be to get rid of debt. But if you focus all your extra cash on debt reduction and fail to save for an emergency – and there will be one because life happens – you may end up adding to your debt to handle that emergency. So save some – perhaps up to $1,000 – then stop and concentrate on the debt. If you have an old car that’s giving you some issues, err on the side of a large “life happens fund” (see earlier answer about this fund).

So for example, if you have an extra $100 a month, use say $50 to boost your life happens fund until you reach a safe savings pot. Then stop saving and put all the extra cash toward the debt. For instance, I was working with a woman who had like $25,000 in credit card debt, and about $30,000 in savings. Her credit card was charging close to 20% interest. Her savings was getting less than 1 percent. But she was scared to let go of that money. She had a fairly secure job, no other debt, etc. I told her to pay off the credit card in full. She did, and she built back her savings in no time.

As for tithing. If you believe this religious principle then, yes, you should tithe while paying off debt. For those who are not believers, I know this sounds, well, financially unsound. But faith is a personal thing and if you believe you follow your faith. Because there are always going to be something to pull you away from your beliefs. Now, if you are going to follow this advice, you must, and I mean must, have a plan that will help you get rid of that debt.

If you're in your 20/30s, should you forget about owning bonds in your 401k and go 100% with equities? My concern is that bonds do not provide higher returns over time.

What would you recommend to someone who's retirement age but never saved anything outside of social security for retirement? Let's assume HCOL area.

Hi Michelle,

Do you recommend paying down debt before saving? Or can you work on both simultaneously. And what about tithing when you have debt to pay off?

Wanted to add something. So, if you are hiring a fee-only planner paying $1,000 to $1,500 is about right if the person is doing a comprehensive look at your financial situation and making recommendations. And you will want that to to include an assessment of whether you are on track for certain goals, such as saving for retirement.

Here’s how I typically answer this question. If you have a painful problem with your gums or teeth, would you try to fix it yourself? Or would you hire a professional/dentist to treat you?

Same with your money. If you are unsure of what to do, or you need a second opinion or guidance pay the money to get help. I have and it has made a world of difference. A few years ago, I found an old folder with advice from a financial planner. She had made a number of recommendations – term life insurance in addition to what my husband and I carried at work, disability insurance, stop being so conservative in our workplace retirement accounts, start those 529 plans, create a non-retirement investment account. We followed all the advice and I’m so grateful. We are doing very well because of her guidance. I would have never done that one my own in my 30s because I was too scared of risk. So, yes, pay the money for someone to look over your financial plan.

My first training ground for financial journalism started with my grandmother Big Mama. She rescued me and my four siblings from having to be put in foster care. She was a masterful manager of her money and she never made more than $13,000 a year. I watch her care for, feed, clothe 5 grandchildren, with an alcoholic husband (sweet man) who often drank away his payment. She trained me to be a saver and hater of debt. Then I went to grad school for business, and honed my personal finance skills and knowledge writing the Post Color of Money column for 25 years. Additionally, I run a financial ministry at my church, which for decades has helped people get rid of millions of dollars in debt. I also volunteer in Maryland prisons in a reentry program. So I have lots of experience on the ground, looking at people’s real budgets.

Lol! I wish I could write so well, Found a great font on Word. If I had to handwrite that note, you might have thought the AMA was months away. I have horrible, horrible handwriting.

First, don’t beat yourself up if you don’t have that $1 million all those articles and experts say you should have. Most folks don’t have anywhere near that much. More like a few hundred thousand. If you find yourself behind, focus on cutting expenses so that you can free up money to invest. I mean really cut to the bone. If you can start contributing the max you can in a retirement account, either workplace or traditional IRA. Then think about what you can change about the ideal retirement you envision. You may not be able to retire at 65 and travel the world. You may need to consider a shared housing situation to cut down on the biggest expense in your budget. Manage our expectations for retirement.

Nope. We didn't start the fire. It was always burnin' since the world's been turnin'.

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We have become a society that loves plastic. Cash is frowned upon, and the merchants and credit providers know that because that’s what they’ve been pushing for decades. So, they can charge high interchange fees because folks want the ease of swiping for what they want. The disadvantage is the cost of goods is higher because you better believe they pass along those fees to consumers. The advantage is we do get some pretty good consumer protections when goods and services aren’t delivered. Credit card companies go to bat for you because they don’t want a lot of chargebacks.

I love working with some of the most talented writers, editors, copy editors, SEO folks, designers, etc. It’s like a room full of the smartest kids in your class. They inspire me to bring my “A” game. It can be stressful, but I like be pushed to be a better columnist, writer, reporter. And, not hype, but we want to serve readers. The conversations aren’t what journalism prize can we win, but how better can we inform regular folks to improve their lives. I truly mean that. There is so much misinformation out there, and we want to be a trusted source. Do we get stuff wrong? Sure we do, but we try to deliver the best journalism that we can.

For more AMAs on this topic, subscribe to r/IAmA_Journalist, and check out our other topic-specific AMA subreddits here.

Great question. I do.

1. Build a healthy emergency fund. Aim for at least 1 month if funds are tight, 3 to 6 months if you’ve got some cushion in your budget. If you are a highly compensated employee/self-employed person try for 12 months to 18 months. And I know that’s a lot of dough, but higher earners when they lose their job or income spend that much time get back to that same earnings level
2. Life happens fund. Different from emergency fund, which I call, “I lost my job” fund. This is the pot you tap when your car breaks down, etc. This way you can leave the emergency fund for something dire
3. Retirement account. Save as much as you can, as soon as you can.
4. College fund if you got kids. My husband and I did this starting when our kids were wee little ones. Saved for 20 years mostly in 529 plan. Had enough to send all 3 to college with no debt, plus one to graduate school. Savings and scholarships did the job.
5. Non-retirement investment account. Pay for our cars with cash/earnings built up by investing over the years.
6. Fun money. So we can take vacations, etc. without building up debt

When looking at historical wildfire data for westside cascades wildfire where it says something like 1200 since the last fire/disturbance how much salt would you take those dates and spacial data? Seems like we make alot specific choices based on a incomplete data set.

Also what are your thoughts on prescribed fire and thinning on "wet" side forests?

Thinking about https://www.pnas.org/doi/10.1073/pnas.1112839109#sec-4

From there conclusion it does not seem like ether thinning or prescribed fire will be effective in reducing the risk of catastrophic but relatively infrequent wildfires. Does that line up with you thought?

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Probably okay for retirement but is it worth $1000 to have someone review my finances?

What's your background? How'd you get into this?

I was in the personal finance industry before I got sick and have been trying to think of different avenues where my knowledge can be useful again.