← So Money with Farnoosh Torabi
So Money with Farnoosh Torabi
1959: Ask Farnoosh: Prep for a Recession? Also: The Price of Aging and Long-Term care
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Farnoosh Tarabi
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You're listening to so Money with award winning money guru Farnoosh Tarabi. Each day get a 30 minute dose of financial inspiration from the world's top business minds, authors, influencers and from Farnoosh yourself. Looking for ways to save on gas or double your double coupons. Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life. Welcome to so Money.
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Farnoosh Tarabi
Welcome to so Money everybody. I'm Farnoosh Tarabi. It is Friday, March 20, 2026. It is almost spring. Happy Nowruz Persian New Year to my Persian Iranian friends all over the world. It's a challenging time of course to be Iranian and Persian however you identify. I call myself Persian. I was just watching the comedian Max Amini. He an Iranian comedian and he's actually the first Iranian comedian to sell out Madison Square Garden and he's been doing a lot of interviews about the war and just, you know, what it means to be Iranian and what it means to have kind of been witnessing the last 46, 47 years of conflict in the country. You know, living there as an Iranian is incredibly painful. The regime there is just brutal. It's unimaginable. Like, I think that's one thing he said, is that I don't think people really understand how bad it was there for 46 years for people living in Iran. So bad that when your country is getting bombed, as it is currently, that there's a part of you that is happy about that, because at the core, you realize this may be the only way we're going to get through and out onto the other side, that it has to get worse before it gets better. And if this is the worst, then this is the worst. I mean, that's. That's probably hard for a lot of us to imagine. I mean, we probably want to avoid war at all costs, right? Like, nothing is worth war. But for the Iranians, I think they see it as their ticket to freedom. And Maximini, he was also talking about this idea of Persians. We are a diverse community across the world, right? And even within Iran, there are many kinds of religions represented. There are Jewish people, there are Zoroastrians, there are Christians, and, of course, Muslims. But he says the first thing when a Persian meets another Persian. They don't ask, are you Jewish? They don't ask, are you Christian? They don't ask, are you Muslim? They ask, are you Persian? And they instantly bond over their culture more than anything else. And I just thought that was a beautiful statement that he is now making as he's doing the rounds, I think probably promoting his. His tour, but doing a great service for our community and getting the word out. He was on another interview. Somebody asked him, why is it that the beauty of the Persian culture has disappeared? And Max said, it hasn't disappeared. It hasn't disappeared. What has changed is that the media has changed the narrative about what it means to be Iranian. And so if you ask a Persian, their culture has not disappeared. And I loved that answer. And I actually, I thought that exact thing, as the words were coming out of the journalist's mouth, I was like, what are you talking about? Like, disappear? You. You can't make culture disappear, man. All right, where were we? I wasn't planning on saying any of that, by the way, but, you know, I got triggered. Speaking of triggered, if you caught Wednesday's episode on the earlier side of the day. You may have had a double take, or you might have been like, what was that? There was an editing glitch. Some of you reached out very kindly and said to me that there was a little bit of an oddness that happened at the end of the show. So I don't listen to the show once it's out in the world. And so I very much appreciate when you come to me and you say, hey, something's gone a little nutty. And on that particular episode, the issue was that after we said our goodbyes on Wednesday with my guest Nikki Mamano, who. You gotta go back and listen to that episode. She's the author of a memoir called Breaking Good. It's all about how she went to Hawaii for college, got thrusted into the drug trade, basically became a drug dealer, a ringmaster in that drug trade, and then went to jail, and then came back to the States and is now like a suburban mom and actually lives in Montclair with all of us and Crazy, incredible story. But at the end of that interview, you hear us picking up the conversation, like, seconds later, after we say goodbye, you hear us picking up the conversation because we did do a pickup after we were done. We were like, oh, one more thing. And I was like, oh, yeah, I'll put this back in the show. I'll find a place for it. And I guess I never did because it was, like, down the timeline, and I just. My eyes didn't catch it. And so people were listening. And then they're like, wait a minute, now they're. They're still talking. And then also, it got awkward because she said something. Nikki said something like, oh, can you take this out? And luckily, I did take that thing out that she was referring to. It was the name of someone that she had dropped. She didn't want to identify someone. And so, long story short, people were like, what? Is Farnish okay? And yes, the short answer is, I am okay, mostly. But, you know, because it was dangling after the goodbye, that little, like, I guess it was like a few minutes, I didn't realize it was still in the edit. It totally blew past me. It blew past my editor, who mostly just audio edits the show. They're not the ones who are going in and making the cuts. If you want to really know how the sausage gets made, I'm the one who is pre editing the show. Yeah, that's me. I get that credit. And my editor is the one who puts the music in and just makes it sound a little bit sharper. They're not going in there being like, hey, you misspoke here. Sometimes they do catch that stuff, but they're doing a million things also. So I'm very sorry. You know, the truth is sometimes the cost of being a solopreneur is this. It's this. It's getting embarrassed on a Wednesday afternoon when somebody DMs you, texts you, and they're like, hey Farnoosh, we love your show. Listening to the podcast, by the way, you might want to fix a few things. And I did. I did fix it right away. Luckily with technology you can do that. And I re uploaded the show. But of course if you downloaded it early in the morning, you might have that original version already, go back and listen to it for shits and giggles, I guess. But the experience has taught me to slow down once again. Things were running very fast and loose the last couple of weeks, so appreciate y' all reaching out to keep me honest. All right. Spending some time today on the show discussing two major things, really. I wanted to get very clear on two things. One is a lot of people are talking about the possibility of a recession. So we're going to discuss this. Do I think we're going to be headed for a recession? Should we be panicking? Healthy panicking? Of course. And then I also want to get into a topic that I think is sort of evergreen but is increasingly getting tougher, which is affording long term health care. So many of you in the audience have parents who are aging and you're experiencing it through them and their struggles, but also you might be experiencing it because you're helping them afford their elder care. And so next week we're actually going to have Senator Andy Kim on the show. He's a New Jersey Democrat senator and he is going to talk a little bit more about from the policy side, the work that he is doing to help this country get more ahead of things and get modernized in terms of helping everybody find better solutions to paying for these exorbitant costs. My mother in law was telling me it's $350,000 down payment. She lives in Lancaster, Pennsylvania. That's just to like secure an assisted living facility. Like a room I like everywhere, she said everywhere. And she's been through it with her parents, so she knows. So Senator Kim has been working very hard to advocate for the elder population, but also middle aged people who might be helping their elder parents navigate the financial challenges of healthcare, Medicare, Medicaid, all the things. And Senator Kim has a very personal story that has inspired him to really take this on as his main mission lately. And so we're going to talk about how to afford it on today's show, how we're thinking about it in our household. My husband and I recently met with a financial advisor. We really want to understand how to best supplement our financial plan for this particular goal. I'm saving for retirement, yes. But my assumption is that this money is going to go to more or less support my day to day life. In the event that there's some catastrophic health care expense that is outside the financial bounds of Medicaid. What are we going to have to have as a backup, right? Me or my husband or maybe one of our parents? I think my parents are saving enough. But what is even enough these days? So we are in the process of learning more about this and I wanted to share some of the things that we're learning with you in real time. So that's later on in the show. And then we do have some questions from the audience. One, a listener kind of on this topic is curious about how to put her financial oxygen mask on while she's also covering rent for her parents. Something that she wants to do. She's happy to do it, but at what cost, right? What is the trade off? And how does she create her own solid financial plan while doing this as well? And then a question about how to align with your partner when you're fighting and arguing about how to financially help and support your family members. How to get on the same page. But first, a quick announcement for all my aspiring writers out there. I'm going to keep this very brief because we do have a lot to cover. If you want to learn how to get a great book deal under wraps in the near future, you really want to do this. It's important to you. You have something important to share with the world. Some advice, a strategy, a memoir, and you want to write a book proposal. En route to that book deal, I want to share all my strategies. I've written four book proposals. Everyone has landed a great book deal. It's going to be a live free workshop happening next Thursday, March 26th at 3pm Eastern. You can register using the link in our show notes. I'm co hosting this workshop with Richelle Fredson, who is one of my former writing coaches Book proposal Coaches. She's also the creator of the Book Book Proposal Blueprint. She teaches many authors write book proposals. Many of those authors have gone on to secure book deals to the tune of about $5 million in deals. So her system works and she and I are going to be co piloting this workshop next Thursday live and recorded. So if you can't make it live, I know we all are busy and going in a million directions. Be sure to register. It is free. But when you register you will get the link to watch the playback of our hour long workshop. All right, that link again in the show notes how to write a successful book proposal and land a great book deal. All right, let's begin with the topic of recessions. This word is back in the news, although it never quite went away. I feel like there's always a story about a pending recession because truth is, the economy hasn't been stellar for some time. The data might point to an economy that is just humming along, nothing really red flaggy. The stock market has had its days, but now that we are in a war, things are getting real. The discussions around a potential recession in 2026 are ramping up. This week especially. Two pieces of news this week really caught my attention. First story about oil prices, of course. Brent crude is hovering around $100 a barrel, which is up significantly in a short period of time. And historically, I'm learning this for the first time. This really matters. Almost every Post World War II recession, except for Covid, has been preceded by an oil shock. And there's not really a magic number where oil triggers a recession. It's that when prices rise quickly, a shock and stay elevated, it acts like a tax on everybody, consumers and businesses, governments. Higher gas prices equal higher transportation costs, higher prices on everything. Mark Zandi, he's a chief economist at Moody's Analytics. He has been in this space for as long as I can remember, since I think I started reporting on money. He recently warned that a recession is, quote unquote, once again a serious threat. And he points to again this historical data point around oil prices, that recession odds were already elevated about close to 50% and that if oil prices stay high for weeks, not months, even just weeks, a downturn becomes much more likely. So you've probably already experienced this yourselves at the pumps. Gas prices are up about 80 cents per gallon since late winter. And economists say if oil stays elevated long enough or climbs higher, the probability of a recession increases meaningfully. And right now, again, Brent crude hovering around 100 more than a hundred dollars a barrel. And the futures market for oil is definitely showing higher prices. Now what does this mean for us? Are we suddenly going into panic mode? Are we thinking recession around the corner? What's my healthy panic advice? Well, as always, I would say plan for the worst. I Definitely have had a couple of chit chats with my husband this week about. Okay, so just wake me up when this is over, okay? Because I don't know if I can take one more thing. I don't know if I got room for a recession on my plate right now. I got a lot going on, but here we are. Okay. I'll tell you what's on my checklist. I want to just make sure that we do have a healthy cash reserve. Healthy enough where if all my contracts go away, if suddenly no one starts advertising on my podcast because we're in a deep recession and advertising budgets get slashed and no one's hiring me to consult and no one's hiring me to speak. Like, if literally my income drops to $10, I need to make sure that we have a roof over our head for a minimum one year, that our bare bone expenses are covered, are spoken for. I'm not as concerned about my husband's job, actually. He has been through worse at his company. He works for a startup and they have been through a lot of lows and he has survived that. I think, funny enough, I think it would actually be my income that might drop more precipitously than his. And if his drops too, we'll be okay. We're going to try to be okay because we're going to be very diligent between now and, you know, let's say till now, till the end of summer, to just be more careful, cost conscious, make sure that we are saving more. I've been very aggressive with investing for the last 20 years and I've been very fortunate to do that. And now I'm kind of at a point where I'm thinking to myself, is it okay to maybe not invest as aggressively so I can take some of that money and put it in a liquid bank account? Because I just feel like my life needs it right now. Given where we are in our life stages with our family, looking outside of our doors, the economy being where it is, and kind of all the uncertainty, we need to make sure that our cash reserves are robust. And to the extent that we gotta do that, we gotta do that. And I say this to everybody listening, if you need to pause on being super aggressive with your credit card payoff strategy or super aggressive with your 401k contributions or your IRA contributions, because it's gonna mean not having as much in your bank account, in your savings account, I would say switch the focus to the savings account. I've been through at least one giant recession and maybe a couple Smaller ones. But the biggest, of course, that I went through and really experienced the consequences of was the 2008, 2009 Great Recession. I lost my job during that recession. I saw my investments plummet during that recession. And the one thing, the one thing that really carried me through that, without needing to sell my apartment or go back and live home with my parents or take some random job, was that I had financial Runway. And it wasn't like I had five years of Runway, but I had just enough. Like, I had about nine to 12 months. And I was a single person back then, so I didn't need a lot, right, to support myself. I could live off of very little. I could make harder sacrifices as a mom. It's not so easy. So I'm caveating. But the point being that having the cash was my savior. And I'm not singular in that situation. You ask anybody during any financial crisis, what was the thing that got you through it? Chances are they're going to say, we had liquidity, we had cash. Okay? So do yourself, do your future self a favor, and just this weekend, take some time to review your expenses, your cash flow. If you lost your job tomorrow, I talk about this in the healthy state of panic. Okay, so you're in a panic. What's the healthy thing to do? You're catastrophizing about the sky falling, your job going away. Let's actually imagine that I'm okay with it. Let's. Let's get scary for a little bit and imagine that you get called into a meeting and your HR manager says, we're sorry to tell you that we've had to right size the company and eliminate a number of jobs, including yours. I think that was actually what they. How they broke it down to me in 2009. And, you know, you can go back to your desk and collect your things and good luck, and you're going to get maybe three weeks of severance. What are you going to do? Okay, so let's imagine that happens on Monday. Hey, small business owners, let's talk about how Found can help you wrangle your finances once and for all. When was the last time you felt like you had your business finances totally under control? Every expense categorized, every receipt tracked, every invoice sent. Oh, and you were prepared for tax season. If the answer is never, you're not alone. And that's what found is for. Found eliminates the clutter by giving you one platform that handles it all. 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Farnoosh Tarabi
Go and look at your bank account. How long would you be able to actually survive, actually pay all your bills in the event that happens, assuming you do get some severance and you're going to start collecting your state's unemployment insurance, do you know your state unemployment benefits? Good. Time to go check that out. Right? And start creating a model for the worst case scenario. Worst case scenario, I lose my job. I only have this much saved, plus my state unemployment, plus I get this much in my severance. And by the way, your severance package, you could probably go figure that out in advance as well. It's not a secret. Your company usually has a policy around this. So go figure that out. This is the work that is going on in my head right now. And as I'm thinking about if there is a huge drop off, I'm actually also, I'm telling my agent, like, get those contracts in. Sir, I gotta sign these contracts, these talks, these deals that were in conversation. Great. But like, I need to see the contracts and I want to sign them sooner than later because I remember March 2020, I had two contracts that we had gone through legal review. These were deals that were going to probably support my entire year. And they vanished because, yeah, I mean, the world was over. March was probably the most frightening of the months of. During COVID Right. We just like my kids, I remember they came home with a few packets of homework and we'll see you on Zoom. And then that turned into a year and a half of Zoom school. I've been through that fright and. And that was an even scarier time financially for us because we had just put an offer on a home. So we were in a lot of transition. And then to lose your income plan for that year as an entrepreneur, I got scrappy real quick. And so that could happen again. And I'm just, you know, hustling a little bit. I'm like, okay, let's get those contracts in yesterday. So that's happening too behind the scenes. I also want to say that it's important while you're looking at your cash reserves to also look at your budget. Right. Are you spending in areas. I call it like the passive, quiet spending. I just realized this morning I got charged $60 for an AI tool that I signed up for last year. This time last year, never used it. I thought I was going to use it. Obviously I paid $60, thought it was a good deal. It's like $5 a month. But I'm not doing it again because that was unnecessary. And I know that $60 is not going to move the needle, but I bet you there are 10 things like that sitting on my credit card statement that I could pull the plug on. So these are the assignments for us right now. The healthy state of panic. Work as we read these headlines and try not to get too worked up, but also realizing, look, recessions, they run on a historical cycle. History isn't a repetitive thing, but it tends to rhyme. As they say, hope for the best, plan for the worst. It's the best we can do, right? What is actually within your control? All right, so that's my recession wrap. Let's move on to talking about health care costs, specifically the health care costs that are impacting our elder population, our aging population. I recently sat down with a financial planner and asked if she could look into some options for us, my husband and I, as we're in our late 40s and if we really want to be ahead of things now, believe it or not, is the time to start thinking and planning out our long term health expenses. Now it's a big wild card in retirement. But the data says out of pocket medical expenses for retirees, average for a 65 year old individual retiring in like around now. Expected to spend approximately $172,500 on health care throughout retirement. But of course it depends on where you live. It depends on your health, depends on inflation. Right, because health care costs often rise even faster than general inflation. And then outside of health care, there's assisted living facilities and things that are usually outside of what Medicare would cover. I remember a financial planner we met with 15 years ago who told us about long term care insurance and she touted the benefits. She herself then was in her like 40s and said, I just bought a policy because the earlier you buy it, the lower your premiums and da da, da, da. And I thought, okay, well when I get to be your age, that's what I'm going to do. And now I'm like, heck no, I don't think so. I don't know. So I'm, I'm just kind of confused right now. What is the best way to plan for these costs? And I, I'm not thinking it's going to be $172,000 for us. I'm thinking it's going to be more like half a million to a. I mean, who knows because I'm, I had a con, like I said, I had a conversation with my mother in law over the weekend and she Was here actually a couple weekends ago and she said, you know, her mother's uh, down payment on her assisted living facility was $350,000. And that was just for the down payment. And then you pay obviously more than that. But it's very easy to spend like a million dollars on if you need it, right? Assisted living. And of course she didn't need it until she was about 90. But what if you get disabled? What if you don't live near your children and no one can help you and you do need to go and live in one of these places. Medicare is not going to help. Long term care insurance, I'm learning, might not be there to help you either. Even though you have been paying the premiums, it's getting more and more difficult to claim those benefits. And so let's talk about first long term care insurance plans and what they are and how they have become a little bit more or a lot more, I guess, challenging to opt into and buy and sustain frankly. And, but long term care, okay, what is that? Ltc. It is the ongoing help that people need when they can no longer fully take care of themselves. It's not medical treatment that they need, but it's just assistance with daily life, the activities of daily living, they're called ADLs. Things like bathing, dressing, eating, using the bathroom and then getting around, walking, getting and out of bed. You can get long term care at home through your home health aides, through assisted living facilities, nursing homes, adult daycare centers. Long term care, it's very common, but it's very expensive. It can cost 70 to $120,000 per year. That's on top of the down payment that my mother in law was talking about. And it is not covered by Medicare in most cases. How people usually pay for it, they pay for it out of pocket. They pay for it through maybe Medicaid after they've spent down a lot of their assets, but that's very difficult to usually qualify for. Then there is long term care insurance, although less common now. And then there are what's a kind of a growing category, a financial instrument that is coming more and more into play as long term care insurance has become less and less of a viable option. These hybrid products that are kind of a combination life insurance or annuity with a long term care rider or a long term care feature. And I'm going to explain these and this is again I'm learning a lot about this last category, these hybrid products in real time. And so we haven't made a decision yet. As to what we're going to opt into, if anything. But I just thought this is really rich information and I know a lot of us in the audience are in my demographic and would benefit from this information. If you're not and you're really young, hey, you know what, consider this a bonus episode and you know, file it in the back and then refer to it later. Now, long term care insurance for many years was a financial product that people bought to protect themselves against these costs that I just outlined. But increasingly, this plan, this long term care plan, it's become more and more expensive. Premiums can run thousands of dollars a year, especially if you're buying later in life and it's unpredictable. More so more and more. Many policyholders have reported significant premium hikes over time, sometimes more than 100% increases, which then you can no longer afford it and then it's harder to qualify. Insurers have tightened underwriting, so if you have certain health conditions, you might not be eligible. And then there is this like use it or lose it aspect to the product. If you never need the care, you may never see that money again. So that is also a tough sell for people, I guess, you know, like any insurance. But it's particularly hard when you're talking about spending this kind of money in your later stage life when you could have been actually just saving it. And then if you do needed it, you have like this bank account, like why wouldn't you have just done that? So replacing that, sometimes it's family caregivers, the kids, it's these hybrid solutions I mentioned. Let's talk about these hybrid solutions. So sometimes they're called like the middle path for long term care. When traditional long term care insurance is inaccessible, people are looking more at these products and this is something that again we're in the preliminary learning stages of these and we're, we still haven't looked at all of the options, so I'm going to speak generally about these. But again they're called hybrid solutions. These are financial products that combine long term care benefits with something else, usually a life insurance policy or an annuity. And the big shift is that you're not paying for something that you might never use. With these hybrids, if you need long term care, you can tap into the policy for those expenses. And if you don't, there's still value like a death benefit or an income stream with, in the case with an annuity, which makes these products far more appealing. But. And there's a catch, right? What do you think? I'm Going to say they can be pricey. I'll get to that in a minute. But let's first explore these two types of hybrid plans. One is life insurance with a long term care writer. This is probably the most popular option right now. I'm learning. So essentially you buy a life insurance policy. If you need the care, you can access part of the death benefit early to pay for your care. And if you don't, then your beneficiaries receive the full payout. So it solves that use it or lose it problem. Then there are annuities with long term care features. Now, full disclosure, I've never been a huge fan of annuities. Still not a huge fan of annuities. But in this case I'm kind of warming up to the idea basically because I have feel like my back's up against a wall here. And annuities in this case, how it works with the long term care feature is you invest a lump sum and the annuity grows or provides income. If you need the care, your payouts can increase significantly, sometimes two to three times as much. So people think of it as like self funding with a boost. So here's how it works. You take a chunk of money, let's say a hundred thousand dollars, and you throw it into an annuity. Now on its own, that annuity might grow over time or it will pay you a steady monthly income later in life. So that's the basic plain vanilla version. With the long term care feature, this is what happens. The insurance company will say to you, if you do end up needing long term care, we'll let you access more money than you normally could. Um, so again the simple example is you put in a hundred thousand. Normally you might see a payout of a thousand dollars a month. But if you qualify for long term care, which means that you cannot perform two daily activities that I listed earlier, like maybe it's bathing and dressing, or maybe it's getting around and bathing. That monthly payout could double or triple 2000 or $3000 a month for a set number of years, let's say maybe three to five. So it's not forever, but it's not free money. So just be to be clear, you are using your own $100,000 lump sum. There is a small built in insurance feature. It stretches your money further if the care is needed. Okay, so the simplest way to explain it is without this long term care rider or addition, your money pays you X a flat rate. With the long term care feature, your money pays you the X. But Pays you more if life gets to be more expensive due to healthcare costs. Just remember the boosted payout does not last forever. It's usually limited to a few years and unfortunately it might still not cover all of your costs, your care costs. So I look at these products as supplements, right? I'm still, like I said, I'm still diligently investing for retirement in my IRAs. That's how I'm mainly doing it in addition to a brokerage account. And then we're going to have maybe an annuity. And the way this financial planner explained it to us with the annuities is that she has done a lot of the research, she's narrowed it down to two products. She feels good about the pricing. So now let's talk about pricing a little bit. Some annuities are more affordable than others, but the key difference will come down to how much protection you're building in a basic annuity with without that long term care rider is going to be your least expensive, but it leaves you fully responsible for your care costs. Right? Adding a long term care writer, it increases the cost, often through slightly lower returns or embedded fees, but it provides a meaningful financial cushion if you need care. It'll give you boosted income. It might give you access to a larger benefit pool. Basically the more robust the versions with higher payout multipliers or longer coverage periods, those tend to cost more upfront or they'll further reduce your growth. Now to end on this, I want to segue to my conversation actually with Senator Andy Kim. I know I teased that it's coming out next week, but I wanted to share an excerpt from our conversation where I asked him specifically about long term care insurance. I mean he's on the Senate floor talking about these exorbitant financial costs that families are facing every single day, including his. His father was diagnosed with Alzheimer's recently and his family has been really through the wringer, emotionally, financially, all of it. And so he brings not just the facts but also the emotions, the empathy to the Senate floor and is trying to push through some, some changes. And so speaking of, I was like, are there changes on the horizon to make long term care insurance more affordable, more accessible? I interviewed the New Jersey Democrat Senator this week along with my co host of the Montclair pod, Michael Schreib. In this portion is just the Senator and I talking about long term care insurance as well as what he wishes he had known or at least the patterns he wishes he had picked up on prior to his father's diagnosis. It's A. It's a very emotional story. Take a listen. Senator Kim. One of the issues that's comes up on a lot on my show is long term care insurance for many years was considered the, a wonderful resource if you can afford it in the later stages of life to come to your rescue essentially, if you needed it to support you financially as you aged. But increasingly people are finding that the premiums keep going up and sometimes the insurance companies are not coming through with it. It's becoming less and less accessible. What are you finding as far as that and how we can make long term care insurance, that industry, more, more affordable? Because for many years that was sort of the, the alternative to affording this and I don't know if that's even a possibility anymore. For people.
- [41:17]
Senator Andy Kim
Yeah, I mean, like the market for long term care insurance has really shrunk dramatically and the number of providers of that insurance have dwindled significantly. It's something that we're looking at in terms of just all the different tools that we have at our disposal. But I think part of the process problem is the costs have gone up so significantly as we've seen in so many other aspects of healthcare. Right. But this is one of the aspects of healthcare that's, you know, risen in terms of costs the most dramatically. As a result, it really has limited the impact that long term care insurance can do. Yes, the premiums have gone up because the costs have gone up, but also in terms of what you get back from it, it's been difficult. So that is something that we're looking at and trying to figure out, you know, what are all the different tools that we can use. There's no silver bullet to this, but we're trying to line up hopefully a series of options and tools that people can engage in. And also it's about just getting people to be thinking further ahead. You know, I say this as someone like, you know, the fact that my father has Alzheimer's makes me probably have a higher, you know, predisposition to having this when I get older. So I am thinking about this personally too in terms of what I was saying of early detection and, you know, other things that we need to be thinking about. So I think for me, when I look back on him, I feel bad sometimes. I was like, oh, maybe I should have saw that this was coming. And I was telling you I was cleaning up my father's, you know, apartment after, after a lot of this decline was happening and I found this kind of diary of his, a notebook of his where he would take notes, and you could just read like day after day. You could just see his handwriting disintegrating. Like, you know, you could see that it just was really turning into scribbles. And I look back on there with a lot of heartbreak. Like, I should have known, you know, maybe if I had just kind of woken myself up to the reality of what was happening and move past my busy days, that maybe we could have done something earlier. But, you know, that's what everyone always feels. Right? The point is, regardless of when you find out, you know, what tools do you have, how do you have the help you need? Because when we got that diagnosis and the doctor told us, you know, this was going to be help for us for a couple of years, there wasn't really a lot of other follow up to help us think through what next. You know, no one really helping shepherd and guide us through that, both financially as well as medically. You know, and those are the types of things I think a lot of Americans could use.
- [43:54]
Farnoosh Tarabi
That was Senator Andy Kim. The full interview will be out next week. And what really stood out to me as I spoke with him, you know, is like, here we have a US Senator, and he is struggling with how to navigate the finances of his dad's medical life. Where does that leave everybody else? Right? This is not lost on him, by the way. He knows if it's difficult for him, someone who is more connected than most people, who has, along with his fellow lawmakers, the ability to influence things like how we structure Medicare and Medicaid, then, you know, where's hope for us? He. He is actually in the position to change the law, and he is struggling, but he is committed to this. This is going to probably be his legacy, so to speak. That's all airing next week. All right, pivoting now to a couple of questions from the audience, kind of on a related topic concerning our parents finances and health care and all of the things Lacy in the audience writes in. Hey, Farnoosh, I'm 35 and I recently began financially supporting my parents by helping cover their rent and their medical expenses. It's something I feel really committed to, but it's definitely cut into how much I can save every single month I'm contributing to a Roth IRA. I have about $75,000 saved so far, but I don't have access to a 401k at work. Am I putting myself behind by taking this on? All right, Lacy, thanks so much for your question. You know, first, I just want to acknowledge what Lacey's doing. She's doing the work of angels. I mean, really. And not to say this is like the most virtuous thing because I, I don't want to shame anybody who's listening and is like, well, my parents need my help, but I can and I won't. It's a, it's a personal choice. And I think your parents are extremely lucky, extremely lucky to have you in their lives to be willing to make this trade off. And yes, yes, you are making trade offs. Absolutely. I'm not going to sugarcoat it and say, oh, no, it's all going to be fine. You'll have plenty of money left over for all your financial dreams to come true. You're going to have to make some tough choices along the way. But I will give you some good news as well, that you're not off track at your age, at 35, to be 75,000. To have $75,000 invested already is a real triumph, I have to say. Now, I don't know what your income is. That's sometimes relative to what we make, right? If you told me you're making millions of dollars a year, I'd say, well, maybe get a little more aggressive with the retirement. But I'm going to assume that you're making, you know, not that. And anything you can save every year is meaningful. And to get to $75,000 by 35 is commendable. So great job. You don't have a workplace 401k either, so that is even more difficult, right? Because with a Roth ira, while we love the Roth ira, the annual contribution is much smaller, right? The limit on that is smaller than a workplace retirement plan. There's no match with a Roth ira. So it is a slower pace with the way she's going. I would say if you have extra money to invest, you might want to look at a brokerage account outside of a Roth ira. This won't give you any tax benefits in the way that a Roth IRA gives you or there's no even tax deduction like a traditional IRA would give you. But it is a way to supplement your investment portfolio. It will give you more liquidity as an investor if you need to tap that money in your near future or later future, there's no penalty for taking the money out. You can use it for anything you want. Now, I don't want your financial life to become a permanent trade off, okay, where your future always comes second. And I just want to say that, like, I think there's a way, right, to support your parents and also realize that your Financial life is of great importance and it needs a strategy, it needs a plan, it needs commitment. So don't like give yourself sloppy seconds. Don't think of your life as an afterthought. It's not. It's the new month and I'm going to put what I got to put towards my parents expenses. And then with whatever's left over, I'm going to make do. No, you're going to figure out ahead of time what you need, what is important to you from a savings standpoint, from a monthly cash flow budgeting standpoint, from an investing standpoint, from a giving standpoint, all your goals. And as well, I would put giving, you know, your parents in there like I'm giving to my parents. How does that all work out? How does that all align? I really want to make sure that you are protecting your faces while you're doing this because here's the thing I always tell my friends and my everyone listening to the show, there's so many people, wonderful people out there that are supporting their aging parents. I say, look, you cannot continue this if you don't have savings, if you don't have stability in your financial life. So get that stability going and don't feel bad. If it means that for a while you can't do as much to support your parents, if it means taking a little bit of time, carving out three months, four months to get yourself financially well adjusted so that you can go back and support your parents more robustly, take the time to do that because you will hit a wall at some point and then you can't support anybody. Really explain this to your parents. I, I think that they would understand. But you're not behind. You're carrying a lot of financial weight, a lot of emotional weight, and I think you should just sit down and create a financial plan for yourself. Supporting your family can be part of that plan, but it's not like it's the plan to support your family and then everything else falls around it. I also just interviewed in Montclair, this nonprofit called Aging in Montclair. You might have a resource like this where you live. It's not tied to the local municipality. It is a separate organization, a not for profit. Essentially what they do is they raise funds and then they support the seniors in town with a variety of things, including helping them navigate their healthcare, helping with their budgeting, helping them with social work. They have a social worker on staff, they have events. Because what they're realizing is when you get older, the biggest problem is loneliness. And so they're pooling a lot of their resources to make sure that they're. The aging population here stays connected. They have things to do, they're together, they're trying to build a senior center. So I say this because I think sometimes we, we carry all the weight. And as the children of our parents, you know, we want to prove to them that we can do it, that we're there for them, they were there for us. But don't neglect all of the other potential, free, even resources out there that can supplement and be there for you and be there for your family or parents. Don't neglect these resources. All right? And lastly, a question about partnerships and the financial tension that couples can feel when, let's say, one partner is supporting a parent or a relative and it's resulting in some trade offs in the couple's finances. Okay. Now the first question was about a single woman's concerns about supporting her parents and that money not being accessible to her for her financial plans and saving. What if now you're two, how does that work? And I will just say that my parents definitely dealt with this. I don't know if dealt with is the right term. I feel like my father supported family back in Iran and didn't tell my mom. And she sensed that that is what was happening. She sensed it. And I think he was scared to tell her. And I think she found out. I think they had a huge fight. I think it almost broke up their marriage, honestly, one of the many reasons I've written all about this. So it's no secret. They know, they know I've told the world all about their dirty laundry. But basically, I mean, it made me who I am. And I gotta tell you, where I come from, I'm being honest, they're still married, so it all worked out. But this was a point of major contention in my family growing up. And I didn't quite realize it until I became an adult. My brother actually was the one that brought it to light. He was like, don't you realize, like, dad did really well at his jobs and we were always struggling. Like, it was true. Like, there was never, like a lot left over, really. Like, we had all the basics. We had a great house, but we never took vacations. We never had, you know, a lot of the extras really, for, for the fact that my father worked all the time. And so my son, my brother said to me one day, he's like, duh, of course. He was like supporting bunches of people over in Iran. And honestly, good for us for being able to do that. But I think the fact that there was no transparency around that created a lot of, you can imagine a lot of unhappiness and a loss of trust. So that's the first thing is just making sure that there is transparency around what one person is doing or what one person wants to do. Let's, let's not do it yet. Let's have a conversation. How much should we want to be giving each month? How long is it going to be going on for? Is it going to be temporary? Is it going to be an open ended commitment? Let's not have it be ambiguous because that is where anxiety loves to hang out. I think it's important as a couple that you define your non negotiables. So before you decide how much to give to a relative, decide what do you need to protect first, such as your retirement contributions, your emergency savings, your core household expenses. And I say this to everybody, whether you're in a relationship or not, you know, if you're supporting a relative or a loved one, that this is what we call that oxygen mask. That's the, this is the metaphor. Like this is your oxygen mask. Your emergency savings, your core household expenses, your retirement contributions. Supporting others should not come at the expense of this stuff. And then rather than making this about like we can't afford this, I would say how do we support our family member in a way that still protects our future, Right. So then it becomes more of like a team problem and not a you problem. And that again, this is so often not even about the money. It's about how we're communicating our problems. It's about the emotions attached. And I probably haven't even scratched the surface because I know so many households, families are, are designed differently. You might be coming into a partnership with your own trust. You might be coming into a partnership with a prenup that outlines this and you follow the prenup. And for those who have trusts, like that has all of its own legalities and ultimately you gotta do what works for the relationship first. I think that would be my opinion. And you know, Amy, my opinion is not everyone's opinion. But I think it's important to first consider your relationship first and everybody else second. I mean, it's hard to put people in a ranking in your life. But at the end of the day, I do see couples breaking up over this because they said, you know, you chose your mom over us or you chose your dad over us, and not meaning like you love them more than me, but that you chose to pool more of our resources towards supporting them than building a life over here. It's hard to keep being in a relationship with someone after that consistently happens. I've seen it and I understand at the end of the day, being generous. It's a wonderful thing. We want to do it as much as we can. But in a partnership, it has to be sustainable, right, for everybody, not just one person. And that's our show, everybody. I'll see you back here next week as promised. Senator Andy Kim. We're also speaking with Brooke Taylor. She's a career coach and she's got a new book out called Healing the Success Wound. Yeah, this really hit home for me. I realized I have success wounds. I also realized I'm a grinder. I'm believing that the more I work, the more successful I will be. Yeah, Some deep revelations on the Sew Money podcast next week. Thanks for tuning in, everyone. I hope your weekend is so money.
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