Kate Ashford
Appearances
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And so once you've got that aid application filled out, next go to your creditors. Knowing what they offer is a huge relief too.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
You might have guessed, a big fan of keeping track of things on your phone. And so having just a note in there where you're going to store like Here's what this group will do. Here's what's available. Hey, I heard about this for help. I find that helps out a lot. But I will say after a disaster, people are working very hard to try and get assistance programs out to folks.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And so if you are stuck and you don't know where to go, calling your bank can be a help. FEMA sets up recovery centers even after FEMA has left. Most government and municipalities have some kind of local recovery center that they'll set up that is full of resources and help. They're often volunteer-based.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And then if Congress has allocated funds for that disaster, once those funds make it into the community, which is usually one to two years later, they'll have long-term disaster caseworkers who are there to help too if you haven't finished your recovery at that point.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So first off, take pictures. After a disaster, take pictures of what your home looks like. Even though that can be really emotionally difficult to do, take pictures of everything. And as you are paying for things to recover or repair or have debris removed, keep all of those receipts.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
There are several different programs that can come out and, you know, depending on the disaster and depending on your situation and your expenses, like governments have a lot of options for tax relief. And having those receipts, having those pictures makes a world of difference.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
The other side is even if you're not receiving tax relief, often the congressional allocated dollars that they give after a disaster, they're called CDBGDR funds. When those come into a community, they often have programs where they will reimburse people for expenses.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And so having pictures of all of those receipts that you've used for your recovery, the whole recovery, can help you take advantage of those as well.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Absolutely. And you're right. Scams are incredibly common after a disaster. So the first thing to know, I think the most common scam that we see are people pretending to be insurance adjusters or pretending to be workers from FEMA or SBA or even the government who are telling people that
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
in order for them to complete their inspection or complete an evaluation, that the consumer has to pay that person directly right away. That is never, ever the case. Volunteers will not charge you money. FEMA will not charge you money. Your insurance company is not going to charge you money like that. So if somebody comes to your door claiming they're from some agency out there,
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And they are asking you for cash. Do not give it to them. My second recommendation is when someone calls you or comes to your door, check out their credentials, make sure they are who they say they are. Look, you know, if they're with FEMA, they're going to have a badge. If they're with your insurance company, they're going to have a badge. If they say they're with your bank, same thing.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
They're going to have ID on them. And if you're even a little bit worried, call the, you know, if it's, you know, your insurance or your bank, whatever, call your insurance company or your bank and confirm that they actually sent someone out to your home. The second most frequent scam that we see is scams around money. contractors and repairs and materials.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So very frequently we see folks who they've got a contractor, the contractor is going to buy the materials that they need to do the repair. They charge you for those materials, but they the way the contract is written, it doesn't mean that they actually have to use the money that you gave them to buy the materials. And so the consumer gets stuck with the cost of those materials twice. It's awful.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And it comes as a surprise frequently once they're moving forward in collections for those folks. The best way to avoid that is to make sure you read your contracts in detail first. And second, to look really closely at your contractors. It is hard to get a contractor out after a disaster. There's incredible demand, but you should still vet them and make sure there's someone reputable.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
It is better to have to wait a little bit longer in your recovery to get someone who can do the job and will do what they say they're going to do in the timeline they say they're going to do it rather than having somebody who takes all of your money and walks away a quarter of the way through the repair.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Thank you for having me. Thank you.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Most people are not prepared. Most people underestimate how much they will need. They underestimate their real risk of a disaster. It feels like something that happens to other people. You hear about 100-year storms, 500-year storms, and that seems so far away and so not something that's likely to happen to you or in your lifetime or in your town. But unfortunately, that is just not the case.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And so understanding things like how much you're going to pay for your insurance, what your deductible is, right? And having some amount set aside for things like just refilling the fridge after a disaster, that is important. And folks generally aren't prepared for that.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Oh, absolutely. And there are so many other things that are demanding our financial attention. I can't blame people. Getting ready for a disaster is... difficult to do and it can feel like an unending task. And there are so many other things around us that we would frankly rather pay attention to. It's not surprising. But I also think, you know, that's part of why it isn't just on the individual.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
It is on employers to help people out. It is on local governments. Like this is all of us together working. It shouldn't just be on the individual to be prepared.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Our take is to try and make it as easy as you can. And so our recommendation is turn on your video on your camera, on your phone, and start walking around your house. So go through every room, go around the outside, try and take pictures of everything, open every drawer, open every closet. Those images, those pictures that you get are invaluable after a disaster.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Because if you are asked to sit down and make a list of every single thing you own, you Even when you're not stressed, right? Like even when it is a perfectly peaceful time and you're feeling very at ease, that is an impossible task for most people. Right. And then trying to do that same task when you are going through the chaos and the trauma of a disaster is even more impossible.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So we encourage people, get your whole family into it. Give your kid the camera and see what they can get. It doesn't have to just be you, but at least once a year going through and getting those videos and pictures.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So for big items that you have, or if you have a particularly expensive collection, something like that, trying to take pictures of receipts as you purchase things is definitely a good policy. I think for most people, for the average person, just thinking about like maybe your computers, those kinds of things, and even just keeping those receipts electronically.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
A lot of us are purchasing these items online anyway, or... retailers allow us to email a receipt over, that can be a big help too. So it's not something you have to paper, you have to keep up with in your house.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Our recommendation is when you go through to pay your bills, starting this month if you can, listeners, but as you're paying your bills, take a picture of that bill and that payment coupon. And so what you're going to have on there is the name of the institution that you're paying or reviewing if you're looking at your bank statements. You'll have the name of the institution.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
The phone number of the institution is usually right there. Your account number is going to be on that. Take pictures of them on your phone. Store them in the cloud securely. And that can be a great way and a great easy way to do it. I know a lot of people who also have the kind of a Ziploc bag approach that they'll take.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So they'll take one page of their statements for all of their different accounts, all the different things they pay. Once a year, they'll put them all into a Ziploc, shut that Ziploc and put that Ziploc wherever they put other items that they are planning to either evacuate with or put it in an area where they plan to shelter in the event of a disaster in their area. That absolutely works as well.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Yeah, so I think having cash on hand is a great idea as long as having cash on hand isn't too much of a temptation to spend it immediately or isn't too much of a temptation for someone else in the home to spend it immediately. And so keeping cash kind of wherever you feel like is safe and out of sight
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
I know people who literally keep it in their sock drawer, or my preferred option is to keep it in a bag where the rest of your disaster preparedness stuff is. So for instance, where I live, tornadoes are the main thing.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
threat in our area and so that's sort of what we are most prepared for in the basement where we would go to shelter in the event of a tornado we have a bag with a change of clothes it's got a little cash it's got our bills and statements in it and a couple other things but kind of the things that we would want close at hand immediately after a disaster and for us that's a really good place to keep it but really wherever is safe and won't be a temptation and as for how much the minimum amount i would say that you really want to shoot for but again you don't have to be perfect
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
is enough to refill your fridge and to fill your gas tanks, assuming your car or cars are on empty. Okay.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So we don't necessarily specialize in insurance, but the one thing that I would say to make sure that they're looking at is not all types of disaster insurance that you might need are necessarily part of just a standard homeowner's insurance policy. So flood insurance is a separate insurance plan.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And I would encourage everyone, regardless of where they live, even if you're on top of a mountain in the desert, go ahead and get flood insurance. It is absolutely worth it. I have one other trick advice that we use for insurance, and that's most people that we work with don't have any idea what's covered until the disaster occurs. And that is the worst time to find out what's covered.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So I encourage people to Take your insurance company's phone number, their customer service phone number, and stick it in your phone. And every time you hear a news story or a podcast or you read something about a disaster, call them and ask them if you would be covered for it.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Yeah, so saving is the, again, the number one thing. If there's only one thing people do, savings is the thing I would encourage folks to do. But the other piece is understand what options are available for the debts that you have in the event of a disaster. So for instance, if you are a homeowner, most mortgage companies offer some kind of after disaster assistance.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Same thing with credit cards, with auto loan companies, and they're usually happy to tell you kind of general terms about what they do. Finally, minimizing credit card debt is also a great way to be prepared for disasters. It's good for you financially anyway, right, to minimize credit card debt.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
But in the immediate aftermath of a disaster, once machines are back up and you're able to use credit cards and you're able to use your bank cards, whatever, having available credit can be a real lifesaver. For most folks, when they go through a disaster, there's a period where they aren't working and they may or may not be getting paid.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
There's also just a lot of expenses that are unexpected and the cost of things, everything rises quickly in the aftermath of a disaster. And so having some available credit can make you more resilient in those first couple of months. So we encourage people, maintain a low amount of credit card debt if you can.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Yeah, absolutely. So after, you know, I just mentioned after a disaster, there are just a ton of expenses. But one of the ways that you can sort of overcome those expenses is with borrowing. And so the Small Business Administration offers disaster recovery loans for consumers. It sounds a little crazy.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Small Business Administration, they're lending to people who aren't small business owners in this case. But that is based on your credit score. They look at credit worthiness and they're not the only ones. So having a really strong credit score makes a big difference in how much you can borrow and the terms of those loans.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Your insurance company should be your very first stop. Let them know there's going to be a long line for having someone come out and look at your property and sort of do that evaluation. So getting to them very quickly is important. After your insurance company, I would say FEMA is really your next stop to put in that FEMA application.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
And I will say those applications can be really complicated in the aftermath of a disaster. It is going through a disaster, particularly one that fully destroys your home, right? That is incredibly traumatic and it is hard to overstate how much of a barrier that can become to your recovery. So my next piece of advice would be to ask for help if you need it.
NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
So if you are going to FEMA, you're struggling with that form, don't wait. Reach out for assistance. There are groups like Project Porch Light and MMI that I work with. There's also volunteers that FEMA uses and FEMA employees who can help. But don't let challenges with filling out a form be the thing that slows down or even stops your recovery.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
So thankfully, my stepfather has an enormous family, and they circled the wagons, and he was kind of taken care of. So he was not on my plate, but my mother very much was my responsibility at the time.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Exactly.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
I think you're exactly right to call it a series of conversations, because sitting down and saying something like, Mom, it's time for me to take over your finances probably isn't going to create the back and forth you're looking for. Yeah. So ideally, this should happen over time in little moments, starting years before you might actually need to do anything before anyone is worried or sick.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
It can be one big conversation if it needs to be. One approach is to bring up your own planning, estate planning, financial planning, and ask your parents how they've prioritized. So what sorts of things have they put in place and how did they make those decisions? It puts them in the position of being the advisor, which helps.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
I actually didn't. I was really lucky in that my mom and stepfather had done all their estate planning without me having to prompt them. So when I had to step in to manage things, it was really just a matter of going back to their attorney to alter the names on the paperwork.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
If we had had to start from scratch, it would have been a big process in the middle of something that was already really stressful.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Yeah. I mean, it would have been a big sticky thing to try to broach that in the middle of the situation.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Yeah. So sometimes people can bring up something that's happened to a friend of theirs or something they've seen in the news. Make something up if you have to, where something happened to a parent and their adult children didn't know where to find all of their accounts, say, or their estate planning wasn't done at all.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
It's a good way to find out how organized they are and to kind of subtly poke them on the things that they should be doing. Because ideally, they've got something like a will, a living will and powers of attorney in place. But this is a good chance to talk about that if they don't.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Absolutely. And again, the more you can do this in little doses, the less anxious everybody gets, I think.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Oh, for sure.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
there are two kinds of powers of attorney generally, financial power of attorney and healthcare power of attorney, which is sometimes called a medical power of attorney or healthcare proxy. Having financial power of attorney means you can handle your loved one's finances. So you can sign checks, you can make payments, you can talk to the bank on their behalf.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
And this can be super helpful if you're in the position of having to move money around or pay bills or pay caregivers. That said, even though I had power of attorney from my mom, sometimes I had to have her on the phone while I made calls to people so that she could verify that I had her permission to discuss things or to take actions. So it depends on the company.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
In that case, and I did have to do this in a couple of cases, you can fax over a copy of the power of attorney paperwork and then they will talk to you. But it's kind of a thing to get the right person on the phone and fax it to the right place.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Who has a fax machine now? Right.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
So having health care power of attorney means, as you might expect, you can make health decisions on your parents' behalf. So if they are incapacitated, you can make decisions about their care. And even if they're not incapacitated, being a parent's health care proxy means you can speak to medical professionals about what's going on with them.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
When my mom was in the hospital in her state and I was here in New York, I could call and get an update on what was going on with her care. I also had access to her healthcare portal so I could see test results as they rolled in. That was super helpful. That's a password that's nice to have if your parent is willing to share it, particularly if they're sick or getting a lot of medical care.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Honestly, this is really going to depend on your parents' financial situation and where they're sitting tax-wise. And this can vary from year to year because there may be years when they have more income, like they've sold a home and they may not need to or want to withdraw as much taxable income. And there'll be other years when they've got more wiggle room or they need to pull more out.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
So to the extent that it's possible, a financial advisor or tax professional can really help you here. And advisors are really accessible these days. You can see them in person or online. Some of them charge a percentage of assets or charge by the hour or charge a fee for a one-time consultation.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
So you can generally find someone whose services and fee structure kind of match up with what you need. You mentioned sort of a pension and annuity setup. That would usually show up in steady income payments over time. So that's just something to factor into the budget along with whatever they're getting for Social Security.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
I think the biggest thing to know here is that Medicare does not cover long-term care, which can be a huge expense. If your parents have a long-term care policy or life insurance with a chronic care rider, first of all, that's good to know, but take a look at it and understand its limitations and what it covers.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Unfortunately, most people don't have long-term care coverage, so paying for things like in-home care, assisted living, or a nursing home will be out of pocket. There are lots of organizations that can answer questions about this. Your local agency on aging is a great place to start. They can generally point you towards some resources if your parents need help.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
If you have questions, I'm a big believer in asking questions. And then to the extent that they need to see a doctor or be in the hospital, Medicare does cover that kind of care. Although the way Medicare covers it depends on whether they've chosen original Medicare or Medicare Advantage. And about half of people 65 and over are on each.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Original Medicare is provided by the federal government, and you can see any provider in the U.S. that accepts Medicare. On the other hand, Medicare Advantage is provided by private insurance companies and works more like health insurance you might have had with a job. So there's a network, and you have to use doctors in that network who accept your insurance.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
At NerdWallet, we generally recommend that if you can afford Original Medicare with a Medigap plan, which is a supplement that helps cover costs, that's the most flexible way to make sure you're covered if something serious happens.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
You know, it's really hard to be managing both things at the same time. And I definitely put some things on the back burner because I didn't have the time or energy for them. But to the extent that you can be present in your life when you're in your life, you know, help your kids with their homework, take them to school, ask for help when you need it.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
So they need rides from people or their parents are there to help you. Remember that you do have a life and needs of your own. So take walks and get exercise and play with your dog and spend time with your kids. I got really good at appreciating the small joys during this time in my life.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
And if you have work benefits that offer access to a therapist or online therapy services, don't be shy about using them. It really helps to talk to someone who isn't your spouse or your friends because you will repeat yourself a lot. And the situation can be frustrating and overwhelming and heartbreaking. And sometimes it's just nice to lean on a professional.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
I think it was really helpful for them to see this play out because they were able to see that you at some point may have to take responsibility for an older loved one. And that's a lot of work. And it's really helpful if they put some things in place. And certainly it does help me think about what would I want to have in place? What do I need to do to make their lives easier?
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
So it is a situation that kind of made all of us think about things.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
At the time, so they were probably 11 and 13. So right in the middle of middle school.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
They did.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Yeah.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Yes, I do. One thing that doesn't get mentioned a lot is making sure you have at some point all the usernames and passwords for your parents' accounts. So even if you don't need to use them now, they are really good to have for the future. And I would say, depending on whether your parents are tech savvy, my mother was not, this may be something to put together with them physically next to you.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Because if they've forgotten a password, so many sites now have two-factor authentication and require you to provide a code that's sent to your email or phone. That could be a nightmare to work through with a parent long distance. And I say this because it's helpful to have this for lots of reasons.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
It's a huge help to be able to get into their bank or credit card statements so you can check on things or you can manage things if you're in that role. But if they have an issue with the website and they can't access something, you can go in and fix it, even if you aren't on site and that's helpful.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Although it's incredibly sad to think about when a parent dies, you will need to shut down their accounts. And that's the last thing you want to be struggling to figure out. Like I needed to cancel my mom's subscription to Netflix and her Amazon Prime account. And I was super grateful that I had all information before she wasn't able to give it to me anymore.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Yeah, and I really didn't want to get on the phone with Netflix. It just, it seemed so complicated. I was happy I had all the information.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Absolutely. Thanks, Sean.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Hi, Sean. I'm always happy to be here.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Yes, actually, I do have experience with this, fortunately or unfortunately. I landed in a long-distance caregiving role a couple of years ago when my stepfather, who was my mom's primary caregiver, got sick and he wasn't able to care for her anymore and she wasn't able to care for herself.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
It was really sudden and I had to step in and put some complicated systems in place to manage things at home and then manage things in assisted living when she moved out of the home and then in the hospital when she got sicker and finally in hospice care. I live in New York, and she lived in very rural Virginia. So none of this was easy. Getting services for her wasn't easy.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
And by the way, I also have two teenagers and a full-time job. So I understand the stress. It was very stressful.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Oh, thank you.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Well, for a time, we had to put caregivers in place. She couldn't be home by herself. She wasn't mobile. So we had to put caregivers into the home. But that's complicated, finding people in a very rural part of the state who could be there at the times when we needed. And then sometimes people didn't show up and family had to step in. So it was the whole thing.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Yeah, in-home care is not the cheapest of options, but we were trying to keep her in the home for as long as we could. So it was a good in-between option, and she didn't want to leave. So for the time being, it was helpful to be able to bring in care.
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Are We in a Recession? What the Data Says—and How to Protect Your Finances
Consolidating with another HSA makes it easier to keep track of your balance, and it can help minimize fees since you're only being charged for one HSA, not two accounts, which might each have their own administrative charges. And since HSAs usually require that you have a certain balance in order to invest the money, combining two HSAs can make it easier to reach that balance.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And you may just want to roll over to a company that has better investment options. So those are all options for you.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So you're basically just moving funds from one HSA to another, presumably with another HSA provider. And there are three ways that this can happen. There is a trustee-to-trustee transfer, which is when your current HSA provider transfers the money to your new HSA provider.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
There's a basic account rollover where your current HSA provider sends you the check, and then you deposit that money into a new account. And then there is an in-kind transfer, which works like the company-to-company transfer, except everything can be moved over in its current form. So cash is sent as cash, and investments are transferred as investments.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Of the three ways that I just mentioned to rollover an HSA, the first two are cash only. So if you do a trustee to trustee transfer or the kind of transfer where your money gets sent to you and you deposit it, those have to happen in cash. So you would have to liquidate investments before transferring. And so it sounds like that's what Vicki is doing here.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
There's the potential to do that third in-kind transfer where you can transfer investments directly, but not all HSA companies offer this, so it's not as common to do it that way. If you do have investments, you can ask your provider whether this is an option.
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Are We in a Recession? What the Data Says—and How to Protect Your Finances
You are correct. Selling investments can certainly have tax implications depending on where you live because some states tax your capital gains. So this applies if there's been any growth on any of the contributions to your account. Capital gains treatment is state-specific, so Vicki will need to check on the laws in their state to see how that would be handled.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And to clarify, you're only going to owe capital gains taxes if you roll over your HSA. If you leave the account alone, those gains are tax-free.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, Sean, the good news is that HSA rollovers are tax-free unless you're dealing with capital gains taxes, and that's going to depend on your state. So if you have investments and there's the option to do an in-kind transfer, that would be the best way to avoid taxes on the rollover.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, Vicki is right to be keeping an eye on the timing, but the timing is only a worry if they're managing a transfer themselves. So if the HSA company is sending them a check and they have to deposit it with a new provider, they've got 60 days to make that happen. But if the HSA company is just moving that money directly to the new HSA company, they don't have to worry about a deadline.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
If you are managing a transfer and you don't get the money deposited within 60 days, the IRS basically looks at that as you taking a taxable withdrawal. So you may owe income taxes, plus there will be a 20% penalty. So we do not recommend missing that deadline.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
In general, if you can do a trustee to trustee transfer directly from one company to the other company, the risk of penalties is low because the money never comes to you. So you don't risk missing any deadlines. So if that's an option, it is your best and easiest choice.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And I also want to note that if you decide to do this on your own, you decide to roll over your HSA by having the money sent to you and then depositing with a new HSA provider, you can only do that kind of transfer once every 12 months.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
It's a little hard to tell from the question, but it sounds as though the reader is rolling their HSA to another provider, even though they're still employed with the same company. They've just stopped matching. So maybe they're not planning to contribute anything else to this HSA, in which case it wouldn't really matter. But it's worth noting.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
that if your employer offers an HSA with your health plan, those contributions can be taken directly from your paycheck, and you won't have to pay Social Security and Medicare taxes, which is not the case if you're saving to a non-employer HSA with after-tax money.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So if they're going to continue making contributions, it may be better for them to keep their HSA where it is until they change jobs, even if their company is no longer matching. And it might be a good idea to consult a tax professional on all of this. The other thing to just repeat for the general public is that you can only contribute to an HSA if you have a high deductible health plan.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So if you change jobs and you get a different type of health insurance, you can still roll over your HSA money into an account with lower fees or different investment options, but you won't be able to keep making contributions to it.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Of course. Thank you so much for having me.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Absolutely. A health savings account, an HSA, is a savings account that lets you put money away pre-tax for medical expenses. To save to an HSA, you have to have a high deductible health plan, so this isn't available to everyone. But for people with access, HSAs are super useful because, as you mentioned, they have three tax advantages. You make your contributions pre-tax.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
If you invest the money, any growth is potentially tax-free. And as long as you're using that money for qualified medical expenses, the distributions you take are tax-free. So it's a really good deal. And it rolls over year to year, so you don't have to use the money in the year that you save it.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Sure. The nice thing about an HSA is that even when you leave your job, you take your HSA with you. So it can be a good idea to move your HSA money if you're changing jobs, either because you're consolidating it with your HSA or your new position, or you're rolling it into an account with lower fees.