Amy: Tonight, today is the day, we have reached a milestone in the fight against inflation, when you should call your financial advisor, and when buying travel insurance might make sense. You're listening to "Simply Money," presented by All Worth Financial. I'm Amy Wagner, along with Steve Hruby. You may not have today circled on your calendar, but maybe you should, because it's actually a big day. In fact, today we've reached something, a milestone that we have not seen since the pandemic, and this has to do with inflation.

Steve: So today is the day that the CPI index fell, and it was by a 10th of a percent month to month. Congratulations, we did it. It's fixed.

Amy: Get out the noise makers and the confetti. Why is this such a big deal? We finally went down, right? I mean, we have been looking...we've been waiting for this month. We have seen so much lag in what the Federal Reserve, our nation's central bank, has done in raising interest rates in order to try to bring inflation down. You know, the economy, Wall Street has been watching this so closely. Why? Well, because the goal here then was to not have to raise interest rates, but get to a point where we can start to lower them. And it was like, gosh, this data was just so, so stubborn, right? You know, it was like coming down, but not coming down fast. And then we finally see a number in the territory that we have been looking for. And, yeah, I think there's cause for a little bit of celebration today.

Steve: It is good news. CPI fell from 3.3 to 3% year over year, which means this is the lowest level it's been since April of 2021. This has been a long journey. This has been a lot of talk about inflation, when for years, it just wasn't on the radar at all. But now it's in our faces because of how quickly it spiked and how quickly the Fed had to kick up interest rates to combat that. And we're finally seeing some success here. Now, core CPI, which is what strips out food and energy because they're more volatile, that rose by just a 10th of a percent for the second month in a row, which is under Wall Street's forecast of two tenths of a percent. So, you know, it's baby steps. We've talked about it for a long time. The Fed has talked about it for a long time, that getting to the finish line is going to take some some time, some effort. But we're finally seeing some of that come to fruition with a tick down in core CPI, or in consumer price index.

Amy: Yeah, yeah. There's 100 ways that you can slice and dice these numbers, right? And the Federal Reserve is looking at it from every possible angle. What they're really looking at is the PCE rate, right? Keep in mind that their goal has always been 2%. And they have been really, really outspoken about the fact that they knew the closer we got to that 3.5, 3%, the harder it was going to get to get to 2%. So this PCE rate now, which is kind of a lesser known rate, but one that definitely the Fed looks closely at, is currently running at 2.6%. I mean, this is really good news.

Steve: Yeah, that's the cost of doing business, is what that PCE reflects. And, you know, looking at the numbers a little bit deeper here, the 3.8% slide in gas prices kind of held back inflation for the month, offsetting the two tenths of a percent increase in both food price and shelter price. Which is, again, a very hefty component of these numbers.

Amy: Well, you mentioned housing, and that's really been the most stubborn thing in all of this. And when you look at what percentage it makes up, right, of this reading, it's 36%. So it is heavily, heavily weighted. And finally, we're starting to see some lessening here. Right? This moving in the right direction. We knew this was going to take a while, just because of the way that rents are reported. Right? When you think about the fact that when you sign a lease on rents or for your rent, you know you're signing for a year. So, you know, if this was a year ago that you signed your lease, you're going to pay the same amount. So it's going to take time, right, for all of these leases to work their way through the cycle, and for that amount to start to go down, and for landlords to realize, okay, we can no longer charge this amount for rent. You know, we're not in the same kind of housing market that we once were. So this is going to take a while. We knew there was going to be a long lag time, specifically in the housing market, and now we're seeing that start to lighten up a little bit.

Steve: Yeah, it's been a long time coming, and I guess it is reason to celebrate when we've seen headline inflation finally drop here. Now, Powell testimony... You know, inflation report came out just hours after Fed chair, Jerome Powell, finished two days of testimony in front of Congress. And of course, he's very cautious about his word choices and signaling what's going to happen, but a lot of economists that kind of dive in and analyze his words, which is a real thing, they're more confident at this point in their forecast for a September reduction. And the news that came out today is really only going to bolster some of their thoughts.

Amy: Well, and Powell used the words considerable cooling. It may not sound amazing, but coming from him, it's probably the most aggressive remark that I have heard him make in the past couple of years, as far as we are seeing results, and we are seeing considerable cooling in what we were looking for here. And so I think that's probably the strongest comment he has made. And as a result of that... You know, and you think back, gosh, to December of 2023, and there were so many people predicting, so many economists predicting that the Federal Reserve would lower interest rates six, seven times this year. I mean, we're in July. Now that's laughable. And now it's like, okay, all sights are set on September, and it appears at this point, and again, we're a couple of months away from this actually happening, but the data at this point is finally pointing in the direction that we could see an interest rate cut. You're listening to "Simply Money," presented by All Worth Financial. I'm Amy Wagner, along with Steve Hruby, as we, I don't know, get out a little champagne and celebrate today. It's worth celebrating when you think about...when you look back on what we have been through in the past few years. You know, you mentioned this, Steve, a few minutes ago. We didn't really talk about inflation much over the past 10, 20, 30, 40 years because...

Steve: Yeah, it'd been a while.

Amy: Yeah, it has been a long time since many of us have thought about inflation on a daily basis. But we have entered this point over the past couple of years, where you were paying almost 10% more than you were just a year before for the same thing. You talk about how that just hammered all of us at the gas pump. Anytime you got your bills out of the mailbox or in your email, anytime you went to the grocery store, it was harder and harder and harder to make ends meet. And now we're getting to a point where the Federal Reserve has said, okay, we see you, we feel you, we hear you. There was a lot of criticism, right, that the Federal Reserve is a little bit late in entering this, you know, arena to try to pull interest rates down. But now it looks like maybe they're at a point, and they have said, listen, we have seen the considerable cooling that we're looking for when we're looking at this data, and now maybe we can start pivoting in another direction.

Steve: And those words were actually used by Powell, considerable cooling.

Amy: I would not mistake his words at this point.

Steve: Yeah, you wouldn't dare. So yeah, it is a reason to celebrate here, it really is, because it's been a long time coming. Now, the jobs report that just came out, initial job list came, they fell by 17,000 to 222,000 in the week ending July 6, according to the Labor Department. Those numbers just came out today. The lowest level since late May. So, you know, we have more news coming out here that shapes some of the decision making that the Fed is going to be looking at here later this year, when it comes to, you know, do we finally bring down interest rates?

Amy: Well, and keep in mind, the Federal Reserve has a dual mandate, right? They need to keep inflation in check, but also keep that labor market strong, you know. And I think it's weird because we've kind of been in this upside down, topsy turvy world for the past year. So we're actually bad labor market. And data is actually a good thing, right? Because it means that likely we're seeing the expected results that you would think as we try to pull inflation down. It's been good though, right? That the labor market has also been a little bit stubborn here. You know, this one reading, you can say, uh-oh, wait, is this a sign that things aren't going well? I don't think so. These numbers are revised 100 times from the time they come out, you know. And this is a weekly reading, you know. And I just think, you know, one piece of data, one data point that's a little off the mark, I don't think is really going to deter the Federal Reserve much at this point.

Steve: No, I don't think so either. There's a lot of data to digest. There's time for them to look at it. And you're right, the numbers do change depending on certain revisions, which is, you know, something that Andy Stout, Chief Investment Officer of All Worth Financial, does a really good job of pulling the curtain back and diving a little bit deeper into that when we have him on Mondays. So, earning season, starting. You know, this is something that we certainly want to make you aware of. It starts tomorrow, and this is Q2 of earning season. It doesn't sound like the sexiest thing in the world, but it's important, because many of the companies that we own, inside of our investments, inside of our 401(k)s, they're going to be revealing the state of their financial health.

Amy: Well, and I think when there's headlines out there that throw out words like recession, you know, that make if you're concerned about volatility, if you're concerned about your 401(k), is it going to go up or down in the future. This is what you pay attention to, right? I mean, the American economy, is built on the backs of these huge American companies, and when they have good earnings reports, your 401(k) shows it. And I think it's a really sort of great Bellwether to show where the economy could be moving in the future. You know, just mentioned the word recession, end of 2022, going into 2023, there were a lot of people telling us the sky was falling, and we could see the worst recession we've ever seen in 2023. Okay, so the first earnings season of this year, we saw less companies use the word recession in their earnings calls than we had seen in years and years and years. So why does this matter? Well, are they still in the same place? Are they not worried about a recession? Are they all growing? Right? All of those things would show growth in the economy, which would paint a really, really good picture for many of us on Main Street, when it comes to checking our 401(k)s, when it comes to job security, when it comes to a lot of things.

Steve: And there's certainly going to be some additional insight tomorrow, specifically, because some of the banks, JP, Morgan, Citigroup, Wells Fargo, you know, they're going to be putting out their earnings reports. And obviously, investors, they are looking out for more signs of weakness in the banking system after some of last year's failures, which some of that was... You know, we've gone into depth in the past about what really caused some of that. It was specifically mismanaged banks and those tied mostly to the tech sector. But, you know, at this point, obviously it'll provide some insight into the impact of the higher for longer, the pause that we've had on interest rates for a while, maintaining to see if it's kind of had that crack in consumer finances, which is an important part of the economy.

Amy: And I think it's worth reminding you that our job, right, our mission here on the show is always going to be to pull back the curtain or pick up the hood, look under the hood and tell you what we think is going on, and why we think it's going on, and how we think it could impact you. This is good information to understand. I always think that knowledge is power. But I also would say, hey, as you have a better understanding of these things, it does not mean that you do anything differently with how you're invested or what your financial plan looks like. If you are a smart long term investor, you kind of set it and forget it. You don't make huge revisions based on what the Federal Reserve is doing, what today's CPI data looks like, what the jobs report looks like, none of that, right? It's good to understand what it is and why it is that way, but not necessarily to do anything with your money as the results of that. Coming up next, we're talking about a great move that more companies are making to try to help you get a secure retirement. You're listening to "Simply Money," presented by All Worth Financial. Here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by All Worth Financial. I'm Amy Wagner, along with Steve Hruby. If you can't listen to our show every night, we still have a lot of great information you need to know about so you can just check our daily podcast. Search "Simply Money," right there on the iHeart app, or wherever you get your podcast. Coming up at 6:43, we're breaking down the times when you should be picking up that phone and reaching out to your financial advisor. All right, so our largest local bank is in the news. We often like to cheer for the hometown team, but this is not news that we are cheering for today.

Steve: No, it is not. So the "Cincinnati Business Courier" is reporting that the Consumer Financial Protection Bureau and Fifth Third Bank actually have reached a settlement where the bank could be required to pay $20 million in fines for...remember that this sounds familiar here, probably from Wells Fargo, creating fake customer accounts, and to add to that, charging unnecessary fees to car loan customers.

Amy: A couple of things going on here, right, with these car loan customers, what it's saying that Fifth Third did was required them to take on some auto insurance, which they already had. So they were paying an additional cost that they shouldn't have. And the fallout for that was incredibly negative for a lot of those customers. And that affected about 37,000 customers pretty negatively. And then addition to that, I guess, so much pressure to meet certain sales quotas that they were putting people into accounts and setting them up for things that no one had signed on for. You mentioned Wells Fargo. And this is why we are sad about this, and also angry and frustrated, is because it's been several years ago that we talked about what happened at Wells Fargo. You know, they had $185 million in fines back in 2016, that was eight years ago, for behavior that's incredibly similar to this. And so it really does make me sad that a local bank was participating in something like this too. It's funny because I was surprised by this. You said you weren't.

Steve: No, that is correct. You know, unfortunately, I've been there, I've worked at a big brokerage firm. I've worked as an advisor for a big bank. Not disclosing, you know, who those places were. And ultimately, you know, as you become a certified financial planner, and if you truly want to be a fiduciary, a lot of the times, we find ourselves employed by registered investment advisory firms, like All Worth, for example, where we are truly a fiduciary at all aspects of our jobs. When it comes to some of these banks, even though Fifth Third is, you know, a darling here in town, it's the biggest bank locally, you see that the sales component of the advisors there that are paid 100% commissions and have these very stringent sales goals to cross sell their own products and solutions, can create scenarios where people are encouraged to go, we'll call it outside the box, outside the law, even, to generate fake accounts and sell people solutions, products that they don't need, such as car insurance. I mean, this is bad, because some of these policies that were canceled, Fifth Third applied the refunds to loan balances rather than sending them back to customers. And in some cases, the bank actually repossessed vehicles when delinquency was caused by the unnecessary charge. Could you imagine how infuriating that would be as one of their customers in a situation like this, where you've been sold something you didn't need, they took it away and they took your vehicle?

Amy: I am not one of these customers, and I am infuriated for you, if this is you. And I gotta say, a $20 million fine is a slap on the wrist, and so is the fact that now they have to maintain policies and develop compliance plans so that this doesn't happen anymore.

Steve: Shouldn't those have already been in place?

Amy: How were they not already in place? Yes, boiling blood. Gosh, gosh. I hope we don't see more banks coming out with situations like this. Because I really thought after Wells Fargo was over, everyone had learned their lesson. Yeah. Okay, so when you start a new job, you remember that first day when there's like, 75 pieces of paper in front of you that HR has you filling out. And I think oftentimes that 401(k) paperwork can kind of get lost in all of that. And a lot of people also assume, like, well, maybe I'm auto enrolled. Okay, well, let's look at that, and what is the impact that's having on your plan? And if you are auto enrolled into 401(k), how much money are you putting in there?

Steve: It's kind of funny, because as a financial planner myself, I'm in the role that I'm going to be in for a long time. But when I start a new job, even before I start, I ask questions about the 401(k).

Amy: As you should.

Steve: I want the details. What's the max?

Amy: But I think you're in the minority. I think most people are like, what's the pay? Okay, good. Sign me up. And not realize...

Steve: I don't want to be in the minority here. I want more people to ask about this stuff. Because 401(k), that's primarily the vehicle that we save in. And currently, companies, historically, well, I should say, recently in history, companies are auto enrolling people into their 401(k)s at a rate of maybe 2% or 3%. Which is good, because people that think that it's happening, but it's not, sometimes they get paid and they think that they're enrolled in their 401(k), they think they're saving for retirement, but they're not. And if that's happening, not only are they shooting their future self in the foot by not starting to save, but they're also potentially missing out on free money. But companies here are actually beginning to increase the contribution rate on auto enrollment, many of them upwards of 6% if you don't opt out of that auto enrollment.

Amy: I think the concern of a lot of companies was, if we enroll people, auto enroll people at 6%, then they're going to get in there and they're going to opt out. And there was some Harvard research that actually showed, okay, if you're going to auto enroll people at 3% or 6%, what is the differentiation here in the number of people opting out? What they found was the people that were enrolled at that 6% rate, really weren't opting out in a greater amount than those that were at 3%. Listen, I like that this is here because I think that this is a safeguard. But Steve, I think you also made an excellent point. You should know how much you're putting in, right? You shouldn't be auto enrolled into anything. This is your retirement. This is your future. You really need to take an active role in it. And while yes, 6% sounds a heck of a lot better than 3%, it's still not where you need to go. Fidelity has done all kinds of research. They say, listen, we think you should be putting 15% in. I have been here for a long time now. We've always said, 20%. Now, not necessarily just 20% in your 401(k), but 20% of your take home pay should go into saving or investing in your future in some way, shape, or form. That can look like your emergency fund. It can look like a health savings account. You should definitely be getting that maximum company match in your 401(k), and look like an IRA or a brokerage account, right? You've got options, but you need to be putting, we would say, at least 15% to 20%. So if you're starting at 3% or 6%, I also like an auto escalation in there of, you know, a little bit more every year...

Steve: One percent per year is totally fine, because as your income increases, even if you get, you know, a little cost of living adjustment in your role, you get your 2.5, your 3%, whatever that is, that additional savings can make a major impact in the long run.

Amy: Here's the All Worth advice, if you can swing it, we recommend saving as much as you can in your 401(k). Coming up next, we're talking about the importance of knowing the ages of your appliances in your home, how that could impact your bottom line. You're listening to "Simply Money," presented by All Worth Financial, here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by All Worth Financial. I'm Amy Wagner, along with Steve Hruby. Okay, when it comes to your home, and full disclosure, I can probably tell you the name of every paint color on the walls in every room of my house. If you ask me, how old is your HVAC unit, or how old is your refrigerator, or how old is your roof? That's going to take me a little longer. Joining us tonight is a real estate expert, Michelle Sloan. You can catch her show. "Sloan Sells Homes," right here on 55KRC every Sunday afternoon. And of course, she's owner of RE/MAX Time. She knows everything when it comes to real estate and what you need to know about your home. And I think this is so interesting, Michelle. I built a home a couple years ago, so I actually know right now how old my appliances are, but usually I'd have no idea.

Michelle: Well, it's an important little piece of information that when I come visit potential clients who want to sell their home, I'm going to be asking those questions. And people's memory is not always the best. So, for example, and I'm just going to bring up a personal situation. I have a refrigerator. We went on vacation a couple of weeks ago. We came back, and the refrigerator, the freezer was no longer freezing. So I had a lot of really soft frozen food.

Amy: Oh no.

Michelle: And I'm like, oh, dang it. So, you know, we lost a whole freezer full of food. But the big question was, between Sloanie and myself, is like, okay, I wanted to buy a new fridge because I felt like the life span of that fridge was over. It was done. You know, I'm not into fixing, give me a new one. He said, "No, it's not that old. We're gonna fix it."

Amy: Knowing you both, that makes perfect sense to me.

Michelle: So the debate went on, but he won out, unfortunately. But unfortunately and fortunately at the same time, because it so happened that we ended up needing, like, a new motherboard or something, it cost $550 to fix, which is certainly much cheaper than it would have been to buy a new fridge. But at the same time then, you know, a couple days later, we realized, well, the ice maker is still not working. So of course, I had to have the technician come back. He said, "Oh, you're low on Freon." Well, then he left and said, "Okay, everything should be fine now." And it's still not. So, personally, I think I was right from the very beginning.

Amy: You think you won that bottle? Yeah,

Michelle: I should have had... But now I'm $700 in and I don't have an ice maker. So I'll just have to go the old fashioned way. But have a fridge that works and a freezer that works. So those are just real life situations. And with that real life situation, number one, if I put my home on the market today, I would have to disclose, if you want my refrigerator, the ice maker does not work and it cannot be repaired.

Amy: Don't expect any ice out of there.

Michelle: Yeah. Don't expect to have ice. And that would make so many buyers really, really upset. They're like, "Fine, you need to buy me a new fridge." And it's crazy, in the 20 years that I've been in the business, that a refrigerator is sometimes a deal breaker for buyers. And just imagine you're buying a house for 300, $400,000, and a $3,000 refrigerator is going to break the deal. And it does. People get very, very passionate about refrigerators.

Amy: It's funny, as you're saying that, I'm thinking, oh my gosh, when I think through the years of, like, looking at a home, the kitchen is very important to me. You know, how it's laid out and everything. But I immediately go to the refrigerator. And probably the last home before the one I'm in now, maybe even bought the house because it was an amazing refrigerator, and my daughter and I were like, look at this is so great. But I think you're making even a bigger point about appliances. First of all, they can be incredibly expensive. So when you're buying a new home and you're being asked to pay what we know are higher prices than ever before, and all of a sudden, then you're looking at every appliance in there, and you're thinking, well, gosh, in the next year or two, I'm going to have to replace this, and then that, and this.

Michelle: Sure. And that's thousands of dollars. Absolutely. Absolutely. And it does make an impact. It really does make an impact. And so if I were to talk to myself, I would probably put a new fridge in because it's going to help sell my house. And so do I want to spend $3,000 on a new refrigerator? No, heck no. But at the same time, do I want to sell my home for the highest price possible? Yes. So an average fridge is 10 to 15 years old. I think we estimated that the fridge that we currently have is about seven or eight years old. So we figured it had a little bit of life left in it. But now that I'm over $700 into the repairs, boy, I wish I would have spent that money and just bought a new fridge. But we're going to live with no ice for a while.

Amy: Well, and, you know, you guys have fixed up your home a lot. You're probably not looking to sell it anymore. And I think that's part of probably the thought process for a lot of people. You've had some stats on here in the last year or so, saying that people are choosing to stay in their homes longer, you know. So I think that probably plays a role in figuring out, do I replace this or do I fix it? But, you know, I love the point that you made that refrigerators can make or break a home. I'm wondering, are there other appliances or things that people need to understand before they put their house on the market that can be that important, that might be worth replacing or updating?

Michelle: Absolutely. I mean your air conditioner, number one, depending on the age of the AC unit. Most air conditioners, the outside condenser unit will last between 10 and 15 years. Of course, there are some that have been running for 25 years. Just understand that when that inspector comes in and says, "Your furnace, or your air conditioner, or your water heater, it's at the end of its life." Whenever you hear that as a buyer, you think, oh, those are dollar signs. You know, you're just throwing money out the window. And you may want to ask your seller, you need to replace that air conditioner. You need to replace that furnace that's "at the end of its life." But as seller, here's my advice, if you can prove that you have been keeping up with the maintenance on those bigger items, you know, if you've had your AC and your furnace serviced every single year, cleaned and serviced, it's going to last longer. So if you have proof of that, you can say, "Hey, listen, it's working perfectly. I've had it checked. I replaced my furnace filters, you know, once a month. I've been really, really diligent." That's going to go a really long way for a potential buyer to understand, okay, we're not going to replace it if it's currently working. Same thing with our roof. You know, asking, how old is the roof? A roof is, generally depending on 20 years, something like that. You could have a 50 year roof. It just depends. But the average life cycle of a roof when that inspector again goes on the roof and says, oh, you've got a lot of granular blah, blah, whatever their technical terms are. And they're saying, well, this roof really is at the end of its life. You hear that as a buyer, and you again think dollar signs. And maybe you want to get money off the sales price as a result. Because, you know, in the next couple of years, you're going to need to buy a new roof. And that's going to be 10 to $15,000, that's a big expense that you have to prepare for in the future or decide not to even buy the home. And so, having your home up to date in the appliances and the mechanical systems, are so very important. And having an idea of how old each item is is also extremely important to the sale of your home.

Amy: Which is something that I would have never thought before to even track. So I think, you know, when you purchase a new appliance, making sure that whatever you keep that paperwork and even date it, so that at least you have the starting point of knowing, okay, is this 10 years old, and it's on its last leg, and this is worth replacing, or does it still have a lot of life in it? And if anyone asks the question, any potential buyers are asking these questions, I have the answers for them. Great insights, as always, on a topic I would have never thought about, understanding your appliances, right? How old are they? Keeping track of those things, from Michelle Sloan, a real estate expert, from RE/MAX Time. You're listening to "Simply Money," presented by All Worth Financial, here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by All Worth Financial. I'm Amy Wagner, along with Steve Hruby. Do you have a financial question you need a little help with? There's a red button you can click on while you're listening to the show. It's right there on the iHeart app. Record your question, it's coming straight to us. We'll help you figure it out. And straight ahead, when should you consider buying travel insurance? Right? Lots of storms out there recently. Could those impact your plans? We'll take a closer look at that. When it comes to money, I would say, Steve, few things really surprise me at this point. One thing, though, that continually surprises me is how many people end up in my office, sitting across from me at the table, who've been working with a financial advisor for a long time, and they have no regular contact with that person, right?

Steve: They don't call each other.

Amy: They do not call each other. They're like, yeah, it's been a couple of years or a few years. And I'm like, what? Why are you even paying them? I think your advisor should be reaching out to you on a somewhat regular basis, once a year, twice a year, right? They should be doing reviews to make sure that you are still on track. But there are also sometimes when I would say it's your responsibility to reach out to your financial advisor. And I think it's important to get into when those times are.

Steve: Yeah, absolutely. So when you're planning to retire, first and foremost, especially if it's a number that is maybe different than what you've shared with your financial advisor, for what you've planned for, what you've built your plan around, you know, this is maybe something that change. If you're planning on retiring, then obviously there's going to be decisions around health care, health insurance. What does that transition look like? If you're retiring, you know, under the age of 65, what are we doing to close that gap? Is it Cobra? Is it some kind of a plan off the marketplace? Social Security, do we explore that now? What about if you have a pension? What kind of options do you have, and what should you deploy in that pension? How are you going to generate a paycheck as you transition into retirement and you're no longer getting a paycheck from work? Now, it's going to be potentially from your investment accounts. Obviously, this is a big one, because there are many different moving parts that need to be navigated, and that's really just scratching the surface from some of those things that I just named off.

Amy: Yeah, if you are retiring without reaching out to your financial advisor, I feel like this is a major mess here. You think about it, you have been in accumulation phase for all the years that you've been working in. You are flipping a major switch here. Steve, you brought up, you know, half a dozen things that are a huge part of that discussion. When you do that, you don't want to make those decisions alone, right? I remember several months ago, someone saying to me, I don't know, I've never done this. I've never retired before. Like, yeah, I get that, you only retire once. How many people have we talked through the years into retirement? Like, we know what to look out for. We know what you can expect. So please, if you're working with someone and they haven't reached out to you and you are getting ready to land that plane into retirement, please reach out to them. Also, if your job status has changed, right? And this is why we always say a financial plan is so important. I had someone reach out to me recently who had just lost her job. She's probably five, seven years away from retirement. She never had a financial plan. So it's like, okay, we're starting from scratch here. When you're not a great place, if you have a financial plan in place already and your job status changes, we say, okay, how does the plan change? What does that detour look like? And how do we get you back on track?

Steve: This is a great example of why it's important to have a financial plan, because it's easier for us to answer those questions when life throws you a curve ball. Another reason to call would be a change in marital status. Obviously, in a situation like this, you're no longer planning as a team. There could be other curve balls, like alimony, child support, splitting up a pension, splitting up retirement accounts.

Amy: Changing beneficiaries.

Steve: Yeah, changing beneficiaries is a really big one. Because if you don't and something happens to you, then there's a decent chance that your money could end up going to your ex spouse, which many of us would not appreciate. You know, sometimes there's additional planning around estate planning. For example, if there's a trust, if you're getting remarried, you know, maybe you're getting with somebody that has children from a previous marriage. Do you need to dive into more of a complex estate plan, rebuilding a trust? These are definitely reasons why you would want to reach out to your financial advisor and not wait for that annual review meeting that they should be reaching out to you for.

Amy: Listen, I have been through this. It is an incredibly, emotional time, and it feels so overwhelming. You have a financial advisor to help hold your hand and walk you through these times. And there's no better time to do that when you are going through this, right? Just to make sure that financially, not only do they have your back, but they're looking out, not only for you right now, but for the future, right? How do you set yourself up best for the future so that when you get on the other side of this, you and your children, if it applies, are really well taken care of. Speaking of children, like, the birth of a child, if you've got one going off to college, right? You go from setting up a 529 when they're born to how do you pay for that college.

Steve: To using the 529.

Amy: Yes. Or if they don't have a 529, can you afford to help them pay for college? Or is it something that you can't afford? All of those things have to be, you know, thought through and discussed with your financial advisor.

Steve: Changes in health is a big one. These can be real bummer conversations, but at the same time, they're important. Those are difficult. We get those sometimes. And it is another reason why having a financial plan is very important. You know, I had one recently. And, you know, sometimes you just have to do your best to remove emotion from a challenging situation. Specifically, this is a guy that knows that he's on his way out. And, you know, what are we doing here to make sure that everything is dispersed in a way that he wants, exactly how he wants. And what can we do ahead of time to smooth out that transition. Very difficult conversations, but certainly value that an advisor can can help add as you prepare to navigate through this, and your family does as well.

Amy: Well, and I also think there's so much dignity and compassion, right, that can be in those situations as well when you have these conversations, and can lovingly think through what's going to happen after you're gone. Here's the All Worth advice, it's pretty simple. Seek the advice of your trusted financial advisor whenever you have a major life event, whenever something major changes in your life. Coming up next, are you worried the weather or maybe some other unforeseen events will cancel your travel plans? Do you need travel insurance? Next. You're listening to "Simply Money," presented by All Worth Financial here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by All Worth Financial. I'm Amy Wagner, along with Steve Hruby. I stepped outside for a few minutes yesterday morning, and I was like, where am I right now? It was cold, it was windy, it was gray. And then my last night, it was nice again. What the heck was going on? Well, we saw the remnants of what was Hurricane Beryl. Okay, that's one thing if you're in Northern Kentucky, where I am, or greater Cincinnati. But for those that were on the coast during that time, that had planned trips... I know someone who had a cruise planned out of Galveston. You know, that's a major... Well, first of all, it's like, what do we even do? But also, you paid a lot of money for those trips. Is there any protection there? Should you be looking at travel insurance?

Steve: You know, probably, if you're going into the Caribbean around right now, because we're entering the shoulder season of hurricane season. And Beryl was a very early hurricane. And I'm sure there are plenty of people out there who had their travel trips or their travel plans derailed. Travel insurance is kind of an umbrella term to cover a range of things that can go wrong. So, trip cancelation, interruption for things like stolen, or damaged, or lost baggage or belongings, to medical assistance, accidental death, to maybe cancelation of a flight or even destination in a hotel that you're going to stay in, because the area was ravaged by a hurricane, for example.

Amy: So let me tell you where I think you should start here. First of all, you reach out to your credit card, especially if your credit card has any kind of travel perks associated, and ask them, what's covered. You know, you mentioned lost baggage. You mentioned, you know, if there's a cancelation with your flight. Many times, you have more coverage in your credit card than you have ever realized when it comes to those kinds of protections. However, and maybe this is because this is, like, my biggest fear, is to be like in Mexico or out of the country and someone gets sick, and they need medical help. Medicare, Medicaid, most health insurance does not cover you when you're in a foreign country.

Steve: Yeah. And it's a great idea to probably explore one of these policies if you have fears like that. Because they can run between about 4% to 10% of the non-refundable cost of the trip. You know, especially if you're traveling around now to somewhere where hurricanes could impact your trip. You know, this is one of those instances where it's probably a good investment, because if you're going to lose 100% of what you spent if your credit card doesn't pick up that cost, at a cost of 4% of the non-refundable costs, then this makes it worth your while in the event that your trip is impacted. I

Amy: I think the more expensive the trip also the more it makes sense to maybe consider this. If it's a Europe trip, if an it's expensive Caribbean trip, it might make sense to look into this, especially depending on what the weather could be expected to be during that time of the year. Thanks for listening. We hope you're going to tune in tomorrow. We're helping you improve your relationship with money. You've been listening to "Simply Money," presented by All Worth Financial, here on 55KRC THE Talk Station.