Jane Bryant Quinn The Best of - The longtime AARP Bulletin columnist shares her timeless advice for making the most out
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The Best of Jane Bryant Quinn The longtime AARP Bulletin columnist shares her timeless advice for making the most out of your money 1
The Best of Jane Bryant Quinn 1. The Right Way 6. To Buy or to Go With Retire- Not to Buy ment Money Leasing a car Even if you’ve left the makes less sense workplace for keeps, after retirement you might want to leave your savings behind 7. Mortgages and Retirement 2. Debt After Death Pay it down, sit Know what you owe— tight or sell? and what you don’t 8. Managing 3. Juggling Estate Your Manager Decisions What you need to With a stepfamily, demand from your try not to split heirs financial adviser 4. Make a Plan 9. Risky Pension Bets While You Can You might be making Don’t put off critical life one if you take a lump decisions until a crisis sum early 5. Dream Investment 10. My Parting Advice or Potential Night- It’s time to say mare? goodbye. But first, ILLUSTRATION BY MICHAEL HOEWELER Fixed-index annuities one last set of tips are popular—but have for how to secure problems your future 2
The Best of Jane Bryant Quinn Introduction By George Mannes I n my all-too-brief stint as Jane Bry- ant Quinn’s editor before she retired, I was impressed by many things about her. To name a few: Her desire to im- prove the finances of all Americans. Her passion for consumer protection. Her vast understanding of money issues, gained over many years. Her desire for accuracy. And the clarity of her writing. Jane, I could see, wanted to use her knowledge and her skills to secure peo- ple’s futures. Was she successful? I have no doubt she was. But don’t take my word for it. In- stead, take it from her fans. After Jane announced her retirement in her final Bulletin column, more than 600 read- ers emailed to congratulate Jane and to thank her for her effect on their lives. “I attribute the majority of my successful financial situation to you,” wrote one re- 3
The Best of Jane Bryant Quinn tiree, praising Jane’s “clear writing style and usable advice” and adding, “I felt like you were my personal adviser.” “You saved us!” began another email. “After losing 45 percent of our retirement Jane Bryant Quinn, savings in the 2003 downturn, my who wrote the Financially Speak- husband and I decided that I would ing column for the AARP Bulletin be the one to learn how to manage from 2010 through 2019, has been our money, and take control of our fi- reporting about nancial lives. Your books and articles personal finance for more than five were my primary teachers.... Now, decades. Among her many other we’re comfortably retired and secure achievements, wrote a long-run- she in the knowledge that we’ll live the ning column for Newsweek, a remainder of lives according to our widely syndicated own direction.” newspaper col- umn, and several It would be impossible to capture books, including How to Make Your all of Jane’s wisdom in any book. But Money Last: The Indispensable Re- in this publication, we’ve selected tirement Guide, most recently up- some of her best, most relevant col- dated in 2020. She umns from recent years. Because we received a lifetime achievement honor ILLUSTRATION BY MICHAEL HOEWELER think that reading, or rereading, any- from the Gerald Loeb Awards, the thing that she writes will put your fi- most prestigious prize in U.S. busi- nances on firmer ground. Enjoy! ness journalism. 4
The Best of Jane Bryant Quinn The Right Way to Go With Retirement Money Even if you’ve left the workplace for keeps, you might want to leave your savings behind From the June 2019 AARP Bulletin W hat should you do with the mon- ey in your 401(k) when you leave your job? Maybe nothing at all. Your instinct may be to take your mon- ey with you by rolling it into an individual retirement account (IRA). And a financial adviser may encourage you to do just that. (Not coincidentally, that adviser might earn a commission or be paid a percentage of the money in your IRA each year.) But just as there may be valid reasons to empty your 401(k), there may be equally valid reasons to leave your savings alone. It depends on the qualities of the 401(k) and your personal feelings. To help you decide, here are some questions to consider: 5
The Best of Jane Bryant Quinn Will it cost you more to stay or leave? Small plans — those with less than $10 million or so in assets — charge an average of about 1.1 percent annually for adminis- trative fees and investment management, according to a 2018 study by Bright- Scope, which analyzes and rates 401(k)s. If you’re in such a plan, you can cut your expenses and improve your investment returns by rolling your money into a low- or zero-fee IRA at a no-load mutual fund company and buying inexpensive funds. Large plans ($250 million and up), how- ever, can be competitive with the IRAs. They typically offer low-cost index funds, or target-date funds that allocate your as- sets between stocks and bonds and auto- matically shift that mix appropriately as you age. If you choose these investments, your plan might cost you less than 0.5 per- cent of assets per year. By contrast, invest- ments suggested by a broker or financial adviser will often cost more than that. 6
The Best of Jane Bryant Quinn Do you want more choice? The average 401(k) offers about two dozen mutual funds from which you can create a well-balanced portfolio. It also might offer a stable value fund, similar to a money market account, that pays high- er interest rates than you can get on oth- er cash alternatives. With IRAs, you have access to tens of thousands of funds, but I doubt that’s an improvement. And there’s no stable value option. How easy is it to tap your money? Your old employer’s 401(k) plan should give you the option of withdrawals at any time, or at least monthly withdrawals. If it doesn’t, an IRA may be better. Are you in your 50s, and will you need the money? In most situations, if you roll your 401(k) into an IRA and then make a with- drawal before you turn 59½, you’ll owe 7
The Best of Jane Bryant Quinn a 10 percent tax in addition to the tax- es usually levied upon withdrawal. But should you leave work the year you turn 55 or later, you can take money out of that employer’s 401(k) without paying that ex- tra tax. Are you in legal trouble? Most creditors can’t get at your 401(k). But, depending on the state where you live, they might be able to reach your IRA. Do you like your plan? If you have low-cost funds that have served you well, and your plan adminis- trator is easy to deal with, why change? Stick with what you know. You can always change your mind later. 8
The Best of Jane Bryant Quinn Debt After Death Know what you owe — and what you don’t From September 2018 AARP Bulletin A lmost everyone dies owing at least some debt. Sometimes it’s only last month’s ordinary bills plus fi- nal medical expenses. But there can be shocking surprises for survivors — debts unknown to the children and even to the spouse of the deceased. Heirs might dis- cover large credit card balances, undis- closed home equity loans or gambling debts. Creditors are entitled to payment, from the money and property (the “estate”) that your loved one left behind. But what if he or she didn’t leave enough to get everyone repaid? Can the creditors come after you? Sometimes yes, sometimes no. With loans secured by property, such as mort- gages, an heir has to keep up the monthly 9
The Best of Jane Bryant Quinn payments or else sell the property to cover the debt. Unsecured loans, such as credit card debt and student loans, are another matter. Your liability depends very much on the nature of the bill, the type of prop- erty and your state’s laws. But here’s what I can say, generally. Some money is protected. At death, un- secured creditors cannot collect from life insurance payments, pay-on-death bank or brokerage accounts, jointly held property that passes directly to the surviving own- er, or retirement plans such as 401(k)s and IRAs that have named beneficiaries, says IRA expert Ed Slott, creator of IRAHelp. com. They’re safe — but only if they were handled right. By “right,” I mean that the deceased filled out a beneficiary form for each account, naming the people who were to inherit. If this step was skipped, the funds will be paid into the estate, where they can be used to satisfy the creditors. 10
The Best of Jane Bryant Quinn Your signature matters. If you signed a joint application for a credit card, you owe the balance, even if you didn’t know how high it had grown. If you were merely an “authorized user,” however, most states don’t require you to pay. (Note that autho- rized users shouldn’t use the card after the owner dies if the estate is broke. Such spending could be considered fraud.) Spouses are generally not liable for any separate debts their mate incurred before the wedding or, in most cases, after. Rules in community property states, such as Texas and California, are differ- ent. Your community property can gen- erally be tapped to pay a spouse’s debts. But creditors can’t take your separate property, says Cathy Moran, an attorney in Mountain View, California In any state, you’ll still owe any private debt you co- signed with the deceased, such as a stu- dent loan. Some private student lenders will forgive the loan, but most won’t. 11
The Best of Jane Bryant Quinn You have to pay the doctor. Final med- ical bills are usually considered a spouse’s responsibility. If your mate entered a hos- pital, the admission papers you signed probably included a payment agreement. When there’s no money, however, and the survivor has very little income, health providers might write off the account. Get tough. Don’t be talked into making a few payments on bills you do not owe. Creditors might claim that you willingly assumed the debt. Tell them, “No, no, nev- er.” You know your rights. 12
The Best of Jane Bryant Quinn Juggling Estate Decisions With a stepfamily, try not to split heirs From July/August 2018 AARP Bulletin W hen you say “I do,” you’re en- tering a financial partnership as well as an emotional one. If you say “I do” a second time and have children, your partnership acquires new stakehold- ers — not necessarily willing ones. Adult children have expectations about how much they’ll inherit and how soon. A new spouse scrambles that calculus. “Steppar- ents and stepchildren are natural compet- itors,” says estate-planning attorney Mark Accettura, author of Blood & Money: Why Families Fight Over Inheritance and What to Do About It. “It’s the number one source of conflict in my practice.” All should be well if you and your spouse are each financially independent and leave your own assets to your natural heirs. But if one spouse depends on the 13
The Best of Jane Bryant Quinn other for support, assets will have to be tied up for that spouse’s lifetime. In cas- es of May-December marriages, children of the older spouse might have to wait an extra 15 years or more before any money comes their way. No smiles there. Nevertheless, your first responsibility is to your spouse. When you write a prenup- tial or postnuptial agreement or update your wills, you’ll each want to be sure that the other will have enough to live on if left alone. A surviving spouse does have the right to claim certain amounts of the late spouse’s assets, in the absence of a will or proper prenup. The award can be large or a trifle, depending on state law — be sure you know which. At the death of the first spouse, distrib- ute at least a little cash to all the adult children, equally. It’s not so much the amount as the signal that you cared. In families with good (or good enough) relationships, children and stepchildren 14
The Best of Jane Bryant Quinn should be treated the same in wills. If there’s a reason not to, the results should still seem fair. For example, take a man with a young second family. He might set aside enough for their education and divide the rest of the children’s money equally. A persistent source of conflict is the di- vision of personal property, says John Scroggin, an attorney with Scroggin & Co. in Atlanta. First-family heirlooms might be claimed by second-family children — in the worst case leading to lawsuits. You and your spouse can help by signing and dating a list of where important items should go and attaching it to your will. If you leave everything to your spouse, you can’t be sure that your natural chil- dren will ever inherit any money. That’s because, after your death, the ties between stepparent and stepchildren might fray. Your spouse’s children will murmur, “You haven’t seen Freddie for 10 years — why 15
The Best of Jane Bryant Quinn leave him 30 percent of the estate?” To preserve inheritances, it helps to leave money for children in trust, with income to the spouse for life. Still, the spouse can effect changes. “In real life, the survivor wins,” says Martin Kurtz, a finan- cial planner at the Planning Center in Mo- line, Illinois Memo to self: Discuss options with a lawyer. Memo to children and stepchil- dren: Keep in touch. 16
The Best of Jane Bryant Quinn Make a Plan While You Can Don’t put off critical life decisions until a crisis From November 2017 AARP Bulletin M ost of us think about retirement as the last big plan we’ll ever have to make. But there’s one more thing that’s perhaps even more important. You need a plan to protect yourself against the risk of making poor decisions in your old- er age. Like it or not, we aren’t as sharp at 80 as we were at 60, even when we think we’re fine. For example, Terrance Odean, a Uni- versity of California, Berkeley, finance professor, tells me that his father, weak- ened from a fall, decided to cancel his long-term care insurance at 85. He never asked his son’s advice. Two years later, he wound up in a nursing home, uninsured. “Dad was no longer thinking clearly but didn’t know it,” Odean says. 17
The Best of Jane Bryant Quinn Margaret King, director of the Center for Cultural Studies & Analysis in Phil- adelphia, wrote to me about an ill and widowed neighbor in her 70s. She has no close relatives and zero plans for fu- ture health care or financial management. “Her friends can’t devote their lives to her needs,” King says. Loss of powers might come on us gradu- ally or suddenly in a crisis. The better pre- pared we are, the safer we’ll be. Item one is to simplify your finances, says attorney Martin Shenkman of Fort Lee, New Jersey, to make it easy for someone to take over. Consolidate any scattered CD accounts and IRAs, set up automatic pay- ments to a credit card for regular bills (card companies provide fraud protection) and create good financial files, including user names and passwords. Then choose an agent who’ll help you with your finances if you become uncertain or unable. Give him or her your durable 18
The Best of Jane Bryant Quinn financial power of attorney after having a heart-to-heart about what you expect. Or consider a revocable trust. Chat with your agent about even small money decisions, in order to get in the habit. Any financial advisers should have someone to contact if you start doing odd things (for example, making big gifts to a hired caretaker). Another power of attorney should go to the person you’d want to make medical decisions for you in case you can’t make them yourself. When your medical and financial stand- ins are not the same person, the financial document should order the financial agent to pay for any kind of care that is chosen by the health care agent, Shenkman says. Draw up a living will that covers your wishes for continuing, or final, care. 19
The Best of Jane Bryant Quinn Dream Investment or Potential Nightmare? Fixed-index annuities are popular — but have problems From October 2017 AARP Bulletin I ’m getting mail about an apparent dream investment. It promises gains if stocks go up, zero loss if they fall and guaranteed lifetime income, too. What’s not to like? Plenty, as it turns out. The investment is called a fixed-index annuity, or FIA, and it’s issued by an in- surance company. Sales are booming — $73.5 billion in 2019. FIA contracts vary, but this is how they work: You buy the annuity with a lump sum, which goes into the insurer’s general fund. You are credited with a tax-deferred re- turn that’s linked to the market — for ex- ample, to Standard & Poor’s index of 500 stocks. If the S&P rises over 12 months, you receive some of the gain. For exam- 20
The Best of Jane Bryant Quinn ple, your credits might be capped at an increase of 5 percent, even if the market soars. If stocks go down, you take no loss — instead, your FIA receives zero cred- it for the year. Each year’s gains or zeros yield your total investment return. But I see problems: Low returns. Salespeople might claim that FIAs could earn 6 or 7 percent a year. But with fees, they’ll struggle to match the low returns from bonds, says Michael Kit- ces of the wealth management firm Pin- nacle Advisory Group in Columbia, Mary- land. High fees. You can’t find out what you’re paying for investment manage- ment. Costs are buried in the black-box system used to adjust the credits to your account. Sales commissions run 5 to 7 per- cent and may be hidden, too. Under the new fiduciary rule, which requires advis- 21
The Best of Jane Bryant Quinn ers to put your interests ahead of theirs, commissions have to be disclosed if you’re buying the annuity for a retirement ac- count, but not for other accounts. Sales- people sometimes claim, falsely, that their services are free. Profit limits. Every year, the insurer can raise or lower the amount of future gain credited to your account. You face high risk that returns will be adjusted down. Poor liquidity. You can usually with- draw 10 percent in cash, each year, with- out breaking your guarantee. But you’ll owe surrender charges if you need your money back before five or 10 years are up. You might also forfeit some gains. Lifetime benefits. For about 1.5 percent a year, you can add a “guaranteed lifetime withdrawal benefit” to your FIA. Prom- 22
The Best of Jane Bryant Quinn ised yearly payments run about 5 percent. But, Kitces asks, why do it? Your basic FIA already provides a lifetime income. What’s more, 5 percent is not a return on your in- vestment. The insurer is merely paying you your own money back, in 5 percent in- crements — and charging you 1.5 percent for the “service.” If you live long enough, you’ll exhaust your money and the insurer will pay, but that doesn’t happen often. For a guaranteed income, try a plain-va- nilla immediate or deferred annuity. It’s cheaper, and you’re not apt to be led astray. 23
The Best of Jane Bryant Quinn To Buy or Not to Buy Leasing a car makes less sense after retirement From 2017 July AARP Bulletin N eed a new car? The question is whether — given your budget and lifestyle — you should buy or lease. Here are the two classic rules: 1. To pay the least over the long run, buy the car outright. 2. But lease if you want to drive a better car than you can afford to own. Down payments are lower when you lease, compared with taking an auto loan, and monthly payments are lower, too. No rule is forever. You might have a dif- ferent opinion in your 50s than in your 70s. Before that discussion, however, you need to weigh some other pros and cons of leasing a car versus buying it. 24
The Best of Jane Bryant Quinn When you purchase a car, you pay off an auto loan in an average of about five years. After that, you drive “free” for as long as you like. You become responsible for all repairs, once the car comes off warranty. To save money, consider a factory “certi- fied pre-owned” car that has been inspect- ed and refurbished and carries a manufac- turer’s extended warranty. When you lease, by contrast, you nev- er own the car. You pay for its use over a limited period of time — say, three years. The warranty should cover basic repairs. Maintenance costs may be covered in the contract. At the end of the term, you can buy the car at a price predetermined by the contract. Or you can return it to the dealer and lease another car, brand new. For those who go from lease to lease, car payments never stop. Which approach best fits your needs? People still working often find it attrac- 25
The Best of Jane Bryant Quinn tive to lease. Driving a fancier car might be good for business (or good for the soul). And constant car payments don’t feel burdensome when there’s a steady paycheck coming in. Before signing the lease, be aware of the many incidental fees (such as for acquisi- tion, documentation and title). For exam- ple, you’ll pay penalties for driving more than 12,000 or 15,000 miles a year unless you buy additional mileage in advance. If you want to give up the car before the end of the lease, you’ll owe early termination fees that might run to several thousand dollars. A crash that totals the car is considered early termination; to protect yourself, al- ways buy gap insurance to cover that un- expected cost. At the end of the lease, there might also be a fee for unusual wear and tear. Are you currently leasing a car? At re- tirement, you might rethink. There’s good 26
The Best of Jane Bryant Quinn reason to own rather than lease once out of the workforce. For one thing, you prob- ably won’t be driving as much, so the car will last longer. As an owner, you’ll be able to use it, reliably, for perhaps 10 or 15 years, while making no monthly payments at all. For another thing, owners are better off on that day when you have to give up driv- ing for safety’s sake and start dialing car services for rides. If you’re leasing and turn the car in early, you’ll owe the big termination fee. Owners can sell their cars and pocket the cash. Nice. 27
The Best of Jane Bryant Quinn Mortgages and Retirement Pay it down, sit tight or sell? From June 2017 AARP Bulletin M ore and more older homeowners are carrying mortgages into their retirement. The dollar amounts are much larger than they used to be, and the average loan term is longer by several years. Is this a crisis? That depends. Normally, the larger your debt, the greater the risk that your retirement stan- dard of living is likely to fall. But some retirees keep large mortgages by choice. Others find it possible to carry even an un- wanted mortgage because interest rates are low. Either way, retirees have options for reducing the debt. Hold a large mortgage. This might make sense for people with high income who can deduct mortgage interest, who are comfortable with risk and who invest heavily in stocks. Your long-term returns 28
The Best of Jane Bryant Quinn are likely to beat your mortgage costs, af- ter tax. If your income is modest, however, you’re probably using the standard deduc- tion, so the tax break on mortgage interest doesn’t do anything for you. Your mort- gage is simply an expense. Pay down the debt faster. You might make double payments, or refinance into a 15-year mortgage. Prepaying is easiest when you’re still working and earning a paycheck. Postretirement, it works best for people with comfortable incomes who can afford the extra monthly cost. But prepay with taxable income; don’t take money out of a tax-sheltered retirement account. And don’t tackle the mortgage until you’ve paid off any lingering credit-card debt. Sell and buy something cheaper. You might buy the new place for cash, if you’ll have enough money left over to live on. If not, take a mortgage with lower payments than you’re making now. The sooner you act, the more money you’ll save. And by the 29
The Best of Jane Bryant Quinn way, banks count Social Security income when evaluating your creditworthiness. Sit tight. If you have only a few years left, just run it off. Aim for being free and clear. Even many wealthy people get rid of their hous- ing debt. If bad things happen, you know that the home is yours. And remember, property taxes and insurance premiums can continue to rise, long after your mort- gage has been paid off. 30
The Best of Jane Bryant Quinn Managing Your Manager What you need to demand from your financial adviser From 2017 April AARP Bulletin H ow do you know if your financial adviser has your best interests at heart? They all say they do. Then some of them turn around and sell you products with high (often hidden) costs that line their pockets at your expense. Here’s your path to getting trustworthy advice: Ask the person managing, or offering to manage, your investments to state in writ- ing that he or she will act as a fiduciary at all times, for retirement and nonretire- ment accounts. That’s especially import- ant for less sophisticated investors who depend heavily on professional advice. Knowledgeable clients already demand 31
The Best of Jane Bryant Quinn fiduciaries for all their money. Ask the adviser to compare the costs and benefits of leaving your retirement money in your 401(k) versus investing it through the firm’s IRA. You want a good- faith estimate, in writing, of what you’ll pay in direct fees or sales commissions, plus any payments the adviser’s firm qui- etly receives for selling particular mutual funds or annuities, says Ron Rhoades, di- rector of Western Kentucky University’s financial planning program. Don’t settle for generalities; get specifics. True fidu- ciaries will give them to you. Consider choosing an adviser who charges flat fees — such as a percentage of managed assets or a fixed amount per year — rather than those who also take commissions. Fee-based advisers can be expensive, too, so you still have to check. But commissioned advisers are those most 32
The Best of Jane Bryant Quinn likely to push complex products, such as annuities whose sky-high costs dwarf any benefits. Don’t be blinded by titles like “financial adviser” or “wealth manager.” If they’re not fiduciaries, the advisers can earn com- missions on sales, and they’re legally enti- tled to put your interests last. Even if they are fiduciaries, they still might persuade you (wrongly) that costly investments are in your best interest. Remain on guard. 33
The Best of Jane Bryant Quinn Risky Pension Bets You might be making one if you take a lump sum early From 2015 December AARP Bulletin W ould you rather have a month- ly pension guaranteed for life or a lump sum of money now? Before I address that question, let me say that you’re lucky if you have the choice. Private pensions are on the way out, even among old-line companies. In older age, there’s nothing more comfortable than a check in the mail every month. Normally, you’re not offered the choice of a pension or lump sum until you retire. Rising num- bers of companies, however, are extending this offer to former employees who hav- en’t taken their vested pensions yet. They want to shift the burden of retirement in- vesting over to you. In fact, they’d like to get rid of you in the next 12 months. That’s because the size 34
The Best of Jane Bryant Quinn of your pension or lump sum depends, in part, on how long the people in your age group are expected to live. If you take a lump sum in place of a lifetime month- ly pension, you’re making at least one of three risky bets. Bet 1: You are betting that you can pro- vide yourself (and your spouse) with a guaranteed monthly income for life that’s at least as high as you’d get from your pen- sion. To check this, go to a website such as immediateannuities.com, which shows you what insurance company annuities pay. Enter the lump sum you’re being of- fered, your age and when you want the payments to start, then choose the type of annuity you want. Compare that payment with your vested monthly pension amount. Odds are, the pension will pay you sub- stantially more, especially if you’re a wom- an, says Anthony Webb, senior fellow at the Schwartz Center for Economic Policy Analysis at the New School in New York. 35
The Best of Jane Bryant Quinn Bet 2: That your life span will be shorter than average. The lump sum is intended to last your expected lifetime, not your ac- tual lifetime. If you live longer, you’ll need extra money in reserve. Bet 3: That you can invest the lump sum in stocks and bonds and earn even more than the pension will pay. To check this, look at the “interest rate” in the fine print of your lump sum offer. (If it’s not there, ask the company for it.) Your investments have to grow by at least that percentage annually, after fees, to equal a pension that covers an average lifetime and much more, if you live longer than that. Lump sums make sense if you’re termi- nally ill, if you have so much in other sav- ings that you’ll never have to worry about running out of money, or if the amount is small. To avoid taxes, roll the money into an individual retirement account. But to assure yourself of an income for life, without taking stock market risk, pen- 36
The Best of Jane Bryant Quinn sions are hard to beat. If the lump sum offer confuses you or leaves you anxious, don’t take it, says Ari Jacobs, global retirement solutions leader at the benefits consultant Aon. “You’ll be in the same spot you were before.” For more information, go to pension- rights.org. In the search box, type in “Should you take your pension as a lump sum?” 37
The Best of Jane Bryant Quinn My Parting Advice It’s time to say goodbye. But first, one last set of tips for how to secure your future From 2019 December AARP Bulletin S o much has changed in the world since the day I launched as a baby financial reporter in 1963. When it comes to what to do with our money, we have tons of options that didn’t exist back then. So which should we choose? My advice? Simplify your financial life. Raise the automatic contributions to your savings plans. Don’t have a plan? Auto- mate contributions to an individual re- tirement account (IRA). Buy low-cost in- dex funds that follow the broad stock and bond markets; they will likely outperform any managed fund you own (and, almost certainly, any bag of individual stocks you might select). Rightsize your life to live within your means. Make a will. Check 38
The Best of Jane Bryant Quinn that the beneficiary forms of your IRAs and 401(k)s list the correct people. Then quit thinking about your money and get on with your life. But, but, but … it’s one thing to nod your head to advice on paper and quite anoth- er to set a plan in motion. You might think about making changes but never act, or simply turn your decision-making over to someone else — someone who won’t nec- essarily have your best interests at heart. So how do you gain the confidence to make financial decisions? Personally, I learned confidence by fol- lowing the academic research on what ac- tually works. That’s where I got the advice that I offered above. If you ignore all the other stuff — namely, the stuff that doesn’t work! — you’ve narrowed your choices to a small set of decisions, such as which in- dex fund to choose. At that point, you can hardly go wrong. What throws us off is the vast Wall 39
The Best of Jane Bryant Quinn Street financial machine offering com- plex investments designed to separate you from your money. If you don’t want to manage your money yourself, find some- one who charges only fees (no commis- sions) and works for a firm where no one charges commissions. Keep it simple. Sim- ple is the sophisticated way to save, invest and plan. 40
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