Ask Liz Weston

Get smart with your money

Liz Weston

Q&A: Look for a fee-only planner

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Dear Liz: I am starting to receive marketing mailings from financial advisors inviting me to a free lunch or dinner to listen to annuity investment presentations. I went to one recently by a fee-based financial planner who told me he also acts as a broker when investing in annuities. He’s been pressuring me to invest all of my retirement funds into a fixed indexed annuity. Isn’t this a conflict of interest? I assume he gets paid by both me and a commission from the insurance company if he signs me up for this investment. Why do financial planners force annuities on seniors? Is it because they know they will also get commissions? Is it better to sign up with a fee-only financial planner? I’ve read that the fee-only planner will act only in my interest, not pushing investments that bring in a commission.

Answer: Yes, yes and yes.
Remember your folks telling you, “There’s no such thing as a free lunch”? Remember that the next time you get one of these offers for a “free” meal (or a timeshare presentation, for that matter), because you could end up paying dearly. These presentations are made by salespeople who can be really good at talking people into products that are not in their best interests.

A good advisor would never pressure you or suggest putting all your investment eggs in a single basket. Look instead for advice from a fee-only (not fee-based) financial advisor who will agree, in writing, to be a fiduciary, which means they’re committed to putting your interests ahead of their own.

Q&A: What you need to know about power of attorney documents

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Dear Liz: My husband has Parkinson’s disease and is showing early signs of dementia. I’ve been advised to get a financial power of attorney. If all of our accounts are joint, is this necessary? What will that do for me?

Answer: A power of attorney gives you the authority to make decisions on your husband’s behalf. You wouldn’t need one to pay the bills from your joint accounts, but this document could be invaluable if you wanted to take action on jointly held property, such as selling a car or house or refinancing a mortgage. Otherwise, you might have to go to court to get a guardianship, which can be expensive.

Please don’t wait. For the document to be valid, your husband needs to be able to understand what a power of attorney is and what it does. You’ll also need a power of attorney for healthcare, which is sometimes called a healthcare proxy or advanced directive, to make decisions regarding his medical care.

There are do-it-yourself options, but given your husband’s condition you may want to hire an experienced estate planning attorney who can offer personal guidance and help make sure the documents won’t be challenged.

Thursday’s need-to-know money news

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Today’s top story: A year-end checklist to make the most of retirement age. Also in the news: How the government’s next step to fight inflation could impact savers, myths about iBuyers, and why you shouldn’t spend a dollar to save a nickel on gas.

A Year-End Checklist to Make the Most of Retirement Savings
Age brings unique opportunities and obligations, including some important year-end tasks that can help you make the most of your money.

Inflation Keeps Surging: Government’s Next Step Could Impact Savers
Fed officials project as many as three 0.25 percentage point interest rate hikes in 2022.

The Property Line: Don’t Be Misled by These Myths About iBuyers
They aren’t responsible for runaway house prices and can lessen some seller pain points. So why all the hate for iBuyers?

Don’t Spend a Dollar to Save a Nickel on Gas
It’s about the worst time possible to buy any car unless you absolutely have to.

Wednesday’s need-to-know money news

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Today’s top story: Keep an eye on debt using visual aids. Also in the news: How to make last-minute flight changes, pet insurance can help keep costs for your furbaby in check, and nearly 30% of shoppers haven’t paid off last years holiday debt.

Keep an eye on debt using visual aids
Visual aids provide motivation.

Winter storms, COVID: How to make last-minute flight changes
Be prepared for last-minute flight changes or cancellations this year.

Nearly 30% of shoppers haven’t paid off last years holiday debt
Financial experts give tips on how to limit your debt

Pet insurance can help keep costs for your furbaby in check
70% of U.S. households have a pet, according to the 2021-2022 American Pet Products Association National Pet Owners Survey.

Tuesday’s need-to-know money news

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Today’s top story: Disability and Credit Access: why scores are key in a crisis. Also in the news: 4 features to look for in the best credit cards of 2022, considering the suburbs, and is trading employee equity a good idea?

Disability and Credit Access: Why Scores Are Key in a Crisis
Having good credit can help you get low-interest loans or credit cards to help you cover your bills in an emergency. Here’s how to get started.

Best Credit Cards of 2022: 4 Features to Look For
Credit card issuers are offering more choice and flexibility as they add features to new cards.

Can’t Buy the House You Want? Consider Moving Out of the City
Suburban and small-town living has its perks, including more spacious and affordable choices for first-time home buyers.

Is Trading Employee Equity a Good Idea?
Buying or selling employee equity has become easier and more accessible, but is it right for your portfolio?