Smart Money 01.29.2021 by Brentwood Press & Publishing

JANUARY 29, 2021

THE PRESS

Finances, Investments & More

Market Still Hot

East County real estate continues to rise

Planning For The Future

Thinking about retirement? Look ahead now

Pennywise, Pound Foolish

How to save and prosper during the pandemic

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By Michael J. Amthor, Esq.

HAVE YOU TALKED WITH YOUR FAMILY ABOUT MONEY? YOU SHOULD. HERE’S WHY.

I have discussed the importance of estate planning many times in these articles. Saving money, peace of mind and making things easier for those you leave behind are just a few of the benefits. However, with estate planning typically comes difficult conversations with family members that does not come natural. Subjects such as who you want to be in charge of your estate after death, who should receive your assets and end of life issues are just the beginning. Nine out of 10 Americans consider it important to have a financial plan but almost half have difficulty discussing finances with loved ones. There are three reasons for this: It can be overwhelming, it can be awkward and talking about a future plan is difficult when you don’t have one in place. The statistics tell an interesting story. 38% of people do not even talk to their spouse or partner about the other’s financial situation before getting married. 55% of those without a financial plan say they are not confident in their retirement and a full 86% of us do not feel they have saved enough for retirement. It starts with a conversation and

JANUARY 29, 2021

Saving money while slowing the spread

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MIKE’S ESTATE PLANNING MINUTE

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sometimes we just need a little help to take that first step. When I talk to clients about estate planning, I do so without making them feel guilty or being ashamed. The most important step you take is talking with someone. I reassure my clients that it is never too late nor too early to start talking about finances after death. Most of my clients have a very real sense of accomplishment and relief because many have been putting it off for years. I cannot emphasize enough the peace of mind my clients walk away with when we complete their estate plan and they know this important issue has been handled. Make a commitment to yourself and talk to your family today about these issues. Keep it light and do not take it too seriously. Your next call should be to my office and we will put your plans into action. If you have questions on this or any other estate planning topic, call me at (925) 5164888. East County Family Law Group, 1120 Second Street, Brentwood – Advertisement www.eastcountyfamilylaw.com

I would recommend they pay down debt … if they have no debt, then adding extra money to their existing accounts, or establishing a Roth IRA, I think would make very good sense.

or nearly a year, East County residents have stayed home, sheltered-in-place and missed

out on vacations, theme parks and other crowd-filled outings. But one opportunity residents haven’t missed out on has been the chance to save a little money by staying home, making some wise investments, paying down debt and stashing some cash away for a rainy day. With more time spent at home, many families are spending extra time on meal planning and cooking. Instead of eating out multiple times per week, many families found ways to save extra dollars on home cooked meals or by supporting local businesses a few times a week or month with takeout orders. For many, the pandemic has provided the perfect opportunity to invest in their gardens. “We are seeing a lot of vegetable gardens, they are number one right now, followed by succulents,” said Luis Perez of

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– David Roche of Apex Securities and Asset Management Perez Nursery. “The third would be typical flowering gardens. I think the COVID-19 brought in a new interest with people being home and growing their own stuff and it’s a great home project, so people are giving a lot of attention to it right now.” see Money page 4B

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Sellers’ market continues into new year

A lot of properties are selling in one to three days. It’s not unusual to get 15 to 25 offers on some hot properties. The demand is high, and inventory is low.

DAWNMARIE FEHR

n 2020, East County saw a shortage of properties for sale and an increase in homebuyers, leading

to a dream come true for sellers. For those in house-hunting mode, the reality wasn’t so dreamlike, and that reality appears to have no end in sight. “We are definitely in a sellers’ market,” said Jim Graydon, mortgage and real estate broker/owner at All Phase Brokers in Brentwood. “A lot of properties are selling in one to three days. It’s not unusual to get 15 to 25 offers on some hot properties. The demand is high, and inventory is low.” He said the historically low interest rates are driving many people to the market in search of their first home or an upgrade on their current home. Though he can see the evidence daily, he said he is still surprised. “You have the country divided, but it’s been that way for a year,” he said. “The reports from Zillow show that values have gone up 7% in the last 12 months, and they are projected to go up another 10% in 2021. It doesn’t make sense. We have a pandemic, there have been layoffs, but then the economy appeared to be

– Jim Graydon, owner, All Phase Brokers Despite the pandemic, real estate in East County remains a sellers’ market. doing well, but the news said something else. But in spite of it all, the market continued on.” Heidy Hurst, an agent with the Dudum Real Estate Group, said she is seeing the same record-low inventory and difficult journey for buyers. She had some advice to stay competitive. “I’m noticing that there’s a lot of people from the larger cities coming into Brentwood and buying, and they are bringing their cash they are getting from selling their homes in the larger cities,” Hurst said. “They are putting down large

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down payments. You are going to get killed in this market if you come in with 5% or 10% down.” Hurst suggested serious buyers come up with as much cash as they can, or retreat and save a little longer to come up with a better down payment. As for sellers, she said to get the most for your property, make sure it is move-in ready. Reducing the price and calling it a “fixer upper” won’t cut it. “Buyers are definitely willing to pay a little extra for the property as long as the home is turn-key, and I think that’s key

in this market,” she noted. “They don’t want to do the extra work, they want it ready to go.” For those who own their homes and are happy where they are, but might be interested in saving some money on their monthly mortgage payment, Graydon said now is a good time to refinance a mortgage, once again thanks to low interest rates. Jim Graydon can be reached at 925-584-9886. For more information, visit http://allphasebrokers.com/. Heidy Hurst can be reached at 925-584-6377, heidyhurstfirst@gmail.com or visit www.hursthomes.com.

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Money from page 2B Another way people can cut back on spending is to take a look at their subscriptions. Monthly subscription clubs have increased in popularity over the past few years and even more so in the past year. With subscriptions available for everything from food and reading to clothes and makeup to music and fitness, many families may be underestimating what they spend each month on their various memberships. A survey conducted by West Monroe Partners in 2018 found the average American assumed they spent about $80 each month on subscription fees. The actual cost was over $230 a month. Now is a good time to take a look at what you pay for each month and compare it to what you actually use. Though the federal government extended the tax deadline to July 15, now is the time to shop around for the best tax software if you plan on doing your taxes yourself. Some websites, like TaxAct, even allow you to file your returns for free in some cases. If you are fortunate enough to have received a stimulus check and considered it extra money, David Roche of Apex Securities and Asset Management has some advice. “I would recommend they pay down debt,” Roche said. “If they have no debt, then adding extra money to their existing accounts, or establishing a Roth IRA, I think would make very good sense. Post-tax money goes into a Roth IRA and the money comes out tax-exempt.” He also suggested depositing the money into an easily accessible savings account in case of a rainy day. Interest rates are historically low right now. That means this could be a good time to refinance your mortgage or student loans, saving money on your monthly payments and putting cash back in your pocket. Other ways to save money are to avoid retail therapy, search for online coupons when you do shop, and try to buy in bulk. Apex Securities and Asset Management is located at 8660 Brentwood Boulevard, Suite G, in Brentwood. For more information, call 925-516-2739 or visit https://fa.wellsfargoadvisors.com/apexsecurities/index.htm. Perez Nursery is located at 2601 Walnut Blvd. For more information, call 925-516-1052.

Changing jobs, switching employers, or retiring? Don’t leave your 401(k) or 403(b) unattended It’s important that you understand your options so that you can take action now to help ensure your retirement savings continue working for you. Options generally include:

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• Roll over your assets into an Individual Retirement Account (IRA)

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• Leave your assets in your former employer’s qualified retirement plan (QRP) (if the plan allows)

• Cash out and pay the associated taxes

Learn the advantages and disadvantages of each of these options as it pertains to your individual circumstances.

Renee Parrett Senior Financial Advisor Managing Director – Investments 1115 2nd Street Brentwood, CA 94513 Direct: (925) 513-6004 renee.c.parrett@wellsfargo.com wellsfargoadvisors.com CA Insurance # 0C92754 Each option has advantages and disadvantages and the option that is best depends on your individual circumstances. You should consider features such as investment options, fees and expenses, and services offered. A Financial Advisor can help educate you regarding your choices so you can decide which one makes the most sense for your specific situation. Before you make a decision, read the information provided in this piece to become more informed and speak with your current retirement plan administrator, and tax professional before taking any action.

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The pros and cons of early retirement

Some people even work to retire early. But what are the advantages of early retirement beyond starting a life of leisure? And are there any detriments to this plan? A survey by the financial services provider TIAA-CREF found that 37% of Americans plan to retire before age 65. However, many of them will not have control over the matter. Those who do may want to consider the pros and cons of early retirement.

Advantages

One of the disadvantages of early retirement is a loss of income. Contributions to retirement accounts also ceases at retirement. This can lead to financial setbacks if adequate savings were not allocated for retirement. According to the resource Wealth How, some people who retire early fear outliving their savings. While retiring early may be good for health, it also can have negative consequences. An analysis from the National Bureau of Economic Research found that retirement can lead to declines in mental health and mobility as well as feelings of isolation. Retiring early may jump start these health implications. Another consideration is that health insurance provided by an employer typically ends at retirement. That means having to pay out of pocket until a person ages into government-subsidized healthcare, such as Medicare in the United States, at age 65. Retiring early is a complex issue that requires weighing the pros and cons. – Courtesy Metro Creative

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Many people seek early retirement so that they can live a life free of the constraints of schedules. In retirement, time becomes, more or less, a retiree’s own. Leaving a job can be a boon to a person’s health as well. Relieving oneself of the pressures and stresses of professional life can free up the mind and body. Stress can affect mental and physical health, taxing the heart and contributing to conditions such as depression or anxiety. According to the Mayo Clinic, stress can cause headache, muscle and chest pain and contribute to trouble sleeping. The earlier the retirement, the more

Disadvantages

Many people are looking to retire early, but there are both perks and setbacks to consider.

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Financial Advice for 2021 By Eric Soiland

Having been in the financial advice business for over 33 years, Eric Soiland is in complete agreement with Booker T. Washington’s statement, “Those who are happiest are those who do the most for others.” His desire to help and serve others has guided Eric in business and in life. He genuinely enjoys helping people and trying to make a difference in their lives. He has lived and been involved in the East County community for many, many years. As a member of the Oakley Chamber of Commerce, he helped stage several fundraising events to enable Oakley to become a city. As a member of the Brentwood Chamber of Commerce, he held the position of ambassador and welcomed new members. He is a new member of the Brentwood Rotary Club and is involved in several projects in the local community. He strongly believes in supporting charities and has financially supported groups such as Juvenile Diabetes, Disabled American Veterans, Battered Women, Meals on Wheels, and victims of the recent wildfires. In April of 2020 he moved his business from Orinda, CA to APEX Securities and Asset Management, LLC here in Brentwood, and looks forward to becoming even more actively involved in the local community as a local business owner and partner at APEX. One of the main reasons he joined APEX Securities was because of their deep commitment and history of being involved in the local community.

As a financial advisor, he enjoys helping individuals and couples who need and value his planning services and advice. His primary focus is working with pre-retirees, retirees, widows, and divorcees. Helping people reach their long-term goals without running out of money is what motivates and gives him personal and professional fulfillment. Eric is a strong advocate for financial life management which he describes as the intersection of life and money. It goes beyond just investing and planning to discussing what’s important in clients’ lives and the intentions for their money over their entire financial lives. He defines success as helping clients stay true to their ideals. That means asking clients questions, such as “What do you want your life to be like?” and “Are you doing the things that you say are important?” It’s also about helping clients make smart choices with their money and how they spend it, not just how they invest it. Financial life management also recognizes that people want transparency and control over their own money, and at the same time they want access to their information beyond office hours. For Eric, it’s really important to the get his clients’ complete story; that is their history of money, their visions, their values, and their goals. It’s also important to help clients find and maintain purpose in retirement and in the later stages of life. This is especially important for widows and divorcees as well. Eric seeks to help his clients get the most out of their lives. It’s more about building and enjoying a rich life, not about dying rich. APEX Securities & Asset Management, LLC Eric B. Soiland, CFP®, CIMA®, CIMC® Senior Financial Advisor/Partner 8660 Brentwood Blvd., Suite G Brentwood 925-516-2732 / 877-781-2739 eric.soiland@wfafinet.com www.apexsecurities.net Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Apex Securities and Asset Management, LLC is a separate entity from WFAFN. – Advertisement

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Financial planners can help people from all backgrounds establish and achieve their financial goals

How to find help with financial planning

inancial advisors can be invaluable resources for people who need help managing their

money.

There’s an existing misconception that financial advisors are only for the rich, but anyone can benefit from some guidance in regard to their finances. The key is finding a planner who understands your needs and is willing to work with you, no matter how big or small your financial dreams may be. According to U.S. News and World Report, some financial advisors are no longer interested in working with people without substantial portfolios. Certain firms have stopped paying commissions to brokers for accounts that are considered small, including customers with assets worth between $100,000 and $500,000. While that can make it difficult to find financial help, there are ways to receive assistance. ♦ Ask friends for recommendations. If a financial advisor has worked with a colleague, friend or family member, he or she may also be able to provide services to you. To find professionals with reputable credentials, look for someone who has a Certified Financial Planner or Personal Financial Specialist designation. Those who are relying on investment advisors should work with one who has a Chartered Financial Analyst certificate. These credentials are indicative of proficiency in financial planning. ♦ Look around online. Various online resources, including U.S. News & World

Financial planners can help people from all backgrounds establish and achieve their financial goals. Report, offer searchable databases. The Garrett Planning Network at garrettplanningnetwork.com offers a map of the United States where users can find financial advisors in their areas who cater to the middle class. ♦ Contact a professional association. The National Association of Personal Financial Advisors can provide resources for finding local financial advisors. Visit www.napfa.org for a listing. Middleincome individuals can look at the Accredited Financial Counselor website at www.afcpe.org to find professionals. Accredited financial counselors often focus on helping low- and middle-income people at affordable prices with relevant financial assistance. ♦ Research compensation. Financial advisors may receive compensation in one of two ways: fee-only and non-feeonly. A fee-only advisor typically charges an hourly fee or flat rate for services. A non-fee-only advisor may be compensated at a percentage of assets earned or may receive incentives and commissions from their companies based on pre-established sales goals or objectives. There are no right and wrong answers to fee schedules, but find a situation that works for you. – Courtesy Metro Creative.

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Tips to staying solvent, Financial wellness for happier, healthier and recession-proof

inancial planning is an umbrella term that can be applied to various aspects of money

management. Many people associate financial planning with retirement. However, effective financial planning can help people confront today’s challenges just as much as it can help them prepare for their golden years. The pandemic that spread across the globe throughout 2020 posed numerous challenges, including a recession sparked by widespread job loss and declines in economic activity. The U.S. Bureau of Labor Statistics noted that the unemployment rate in the United States exceeded 10% in July 2020. The sudden rise in unemployment and decline in global economic activity underscores the need to plan for recessions, even during those times when economies are thriving. Build up your savings. A recent poll from the Kaiser Family Foundation found that 45% of adults said their mental health had been negatively affected due to stress related to the virus. That poll was conducted in March, shortly after lockdown measures were instituted and the term “social distancing” entered the North American lexicon. As

the pandemic wore on through the summer, fall and into the winter, stress remained a big concern for many people. Each person’s financial needs are different, but many planners recommend clients have at least six months’ worth of expenses in their savings as a cushion to help them get through job loss. ♦ Pay down debt. Debt, particularly highinterest debt, can compromise your ability to save. A 2019 survey from Bankrate.com found that 13% of Americans admitted that debt was preventing them from saving more money. Pay down debt like credit cards and only make credit card purchases if you have the money to pay the bill in full when it’s due. ♦ Avoid overspending. Many financial planners recommend a 50-30-20 approach to money management. Such an approach advises people to devote 50% of their earnings to needs, 30% to their wants and 20% to savings. ♦ Expect the unexpected. The American economy was doing historically well as recently as January, only to have the bottom fall out during the pandemic. If you want to recessionproof your finances, do not take your foot off the gas in regard to insulating yourself from the next recession. No matter how strongly the economy is performing, continue to expect the unexpected and prioritize saving. – Courtesy Metro Creative

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alifornia Payroll announces the upcoming release of Early Wage Access and Financial Wellness

Programs, changing the game for how employees can access their paycheck. Early Wage Access gives workers access to a portion of the money they’ve already earned ahead of payday, so they can cover unexpected expenses without having to use payday loans, paying overdraft fees or being late on bill payments. Previously, if an employee wanted an advance prior to payday, they’d have to borrow using a high-interest payday loan, but Early Wage Access is changing that. Employers can now feel confident giving employees on-demand access to a portion of the money they have already earned, without the fear of risk and overhead. More than 78% of Americans are living paycheck to paycheck, with American households paying $577 annually between overdraft fees, late payment charges and high interest rates. Early Wage Access gives employees control over their finances and brings them one step closer

to financial freedom. Providing employees Early Wage Access to a portion of their earned wages and financial education can reduce financial stress and improve employee productivity and satisfaction. The Financial Wellness Program is included in the Earned Wage Access Program, so employees also gain access to valuable tools and financial education. This employee benefit will help increase employee productivity and promote a positive company culture. For more information on the Early Wage Access and Financial Wellness Program, please call us today at (925) 240-2400 or email: info@californiapayroll.com. California Payroll has been providing Payroll, Time & Attendance and HR Solutions to California-based businesses since 2001. Our clients range in size from 5 to over 10,000 employees, and represent a variety of industry- and company-specific needs. We offer flexible, tailored solutions to meet and exceed those needs using the latest technology coupled with local expertise and world-class service. www.californiapayroll.com

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Can I have a Reverse Mortgage and still leave a legacy to my kids?

Yes, you can with the HECM Reverse Mortgage

he short answer is yes you can! Many people have a preconceived notion that it is one or the other. I either take out

a reverse mortgage and spend my kid’s inheritance; OR I do not take out a reverse mortgage and I have something to leave to my kids. Not the case any longer. In October 2017, HUD made significant changes to the FHA insured reverse mortgage (HECM) program. At the time, the changes were very controversial because they reduced the percentage of the value of the home that could be borrowed under the program. Many felt that the government was withholding what was rightfully theirs or that HUD was overstepping their bounds by reducing how much equity they could pull out of their own property. I heard it all. People were up in arms over the changes. The bottom line is that FHA, as relates to reverse mortgages, is an insurance fund. They insure reverse mortgages; they do not fund loans. We are The Reverse Mortgage Group, a branch of American Pacific Mortgage, and we are the lender, we are the company that funds the loans. HUD was looking at the insurance fund in relation to the percentage of equity they were allowing and contrasting that with extended longevity. The future of the insurance fund was certain insolvency. HUD had to make a move. They did. On October 2, 2017, the new principal limit factors (loan to values) took effect. The reduction in the percentage of the value that could be borrowed was reduced by approximately 20%. For example, if you could previously borrow 50% of the value of your home, you can now borrow 40%. If previously you could borrow 70% you can now borrow about 56%. That may seem draconian, but it was a do or die move. People were outliving the actuarial tables by a considerable number of years. People were unprepared or underprepared for retirement and/or their longevity. Then let us not forget 76,000,000 baby boomers coming into retirement. The baby boomer cohort represents a record number of retirees coming through the pike, and the most underprepared cohort in history, often through no fault of their own. HUD was looking at a national retirement crisis. Pension funds were (are) underfunded, people had lost much of their savings and retirement assets during the 2008 economic collapse, and people were living longer than they were supposed to. The math was not adding up. As I met with seniors to review the pros and cons of reverse mortgages, prior to the changes made by HUD, the two biggest concerns were: What if I need to sell my house later on to pay for health care but I have used all my equity? What if there is nothing left to leave to my kids? The GREAT news about the changes HUD made is that it addresses both of these concerns. Under the previous guidelines, using a 4% appreciation rate, with interest accruing at approximately 5%, it was possible to run out of equity at around year 17 of the loan. This would depend on how the person/people chose to use their reverse mortgage funds, but the point is that it was possible to use up all your equity.

With the new reverse mortgage, it is virtually impossible to “run out of equity” unless we have another 2008, Heaven forbid. As a matter of fact, using just 4% appreciation and 5% accrual rate, you will gain equity over the life of the loan even if you were to draw 100% of the funds upfront. The math is brilliant. Granted if you never borrowed against your home at all, using the same 4% appreciation assumption, you would have more equity by the time you pass away. But, the post 10/2 reverse mortgage, allows you to live in your home without a mortgage payment, or to have your home generate monthly income for you and you still gain equity, assuming a 4% appreciation rate, and a 5% or less average interest rate. It may seem to be too good to be true, but it isn’t. Let me show you, in black and white, and you will see how the math works. Regardless of anyone’s political leanings, this was a great move on the part of HUD. They are a huge government agency. Government agencies, big and small, don’t always get it right but in this case, they did get it right, in a big way. Some of the benefits of the changes include: Having substantial equity in later life if you need some type of long-term care* Being able to leave a legacy to your children when you pass* Having the option to leave a living legacy to your children so you can see them enjoy it. Having access to tax free proceeds depending on your current equity position Eliminating a current mortgage payment and thereby increasing your cash flow *assuming a 4% appreciation rate, and a 5% or less average interest rate. Whether you decide a reverse mortgage is right for you or not, it all starts with education. That is what I provide as a Reverse Mortgage Specialist, I provide you with insight as to how the complex nuances of a reverse mortgage may or may not work for you and your family. I am not a jack of all trades. I specialize in reverse mortgages. I offered traditional “forward” mortgages for 25 years before I decided to focus exclusively on reverse mortgages 12 years ago. The reverse mortgage is a big decision. It will affect the rest of your life and it involves your home, your money, your lifestyle, and your legacy – it is a huge decision. It is important for me to be extremely well versed in all the shades and tones that will help you to make the best decision for you and your family. Sure, you could call 1-800-reversemortgage and talk to a celebrity but then you are working with a call center. Your loan application is passed from one person to the next. You never speak to the same person. No one knows your name. Your loan is closed using a signing service agent who does not know anything about reverse mortgages. You often work with a “registered loan officer” not a licensed, trained, mortgage loan officer. And the worst part is once you make that phone call, they will call you 5 times a day telling you that you have to sign right away before “this limited time offer expires”. They are relentless. I cannot count the number of people who call me in total frustration after waiting months for the call center to come through with what they promised. I ask why they signed the application and they say “I finally gave up, they just kept pushing me, and I finally said ‘okay, fine’!” I am extremely low key. It is not a limited time offer. Sure, things can change but you still deserve time to review the material, think things through, and make an educated decision without pressure.

Beth Miller-Rowe has been in the mortgage industry for 38 years specializing in reverse mortgages for the past 12 years. Beth has degrees in economics and business administration. I meet with you in the comfort of your own home (pre and post Covid). I review the program, the process, the costs, and the pros and cons - face to face. This face-to-face meeting is critical to the immediate success of your reverse mortgage but more importantly it is critical to the success of your reverse mortgage over the long run. If we cannot meet face-to-face at this time, we will be on the phone, zoom, face-time, until you are comfortable with all the material, and feel that you can make a good decision. Call me today, I would love to sit down and chat. – Advertorial

Let’s take a look and see if we can Make Your Retirement Dreams Come True.

Beth Miller-Rowe NMLS: 294774

Branch Manager and Reverse Mortgage Specialist

The Reverse Mortgage Group • A Division of American Pacific Mortgage Corp.

Office: 925-969-0380 Cell: 925-381-8264 Beth@YourReverse.com

3478 Buskirk Ave., Ste. 1000 Pleasant Hill, CA 94523

Your Retirement Dreams Can Come True! A Division of American Pacific Mortgage Corporation NMLS 1850

DRE: 00950759/01215943 • NMLS: 294774/831612/1850 Licensed by the Dept of Business Oversight under the California Residential Mortgage Lending Act

*Reverse mortgages are loans offered to homeowners who are 62 or older who have equity in their homes. The loan programs allow borrowers to defer payment on the loans until they pass away, sell the home, or move out. Homeowners, however, remain responsible for the payment of taxes, insurance, maintenance, and other items. Nonpayment of these items can lead to a default under the loan terms and ultimate loss of the home. FHA insured reverse mortgages have an up front and ongoing cost; ask your loan officer for details. These materials are not from, nor approved by HUD, FHA, or any governing agency. **American Pacific Mortgage Corporation is not financial service company or licensed tax advisors; the material provided is for informational and educational purposes only and should not be construed as investment, tax and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors. We are not financial or tax advisors, please contact your financial professional for your personal financial situation.