Skip To Content

Test ADA Page Title

Test ADA Page Description

IT CAN BE ENORMOUSLY CHALLENGING—both financially and emotionally—to care for a someone suffering from Alzheimer’s or another form of dementia. Your advisor can help you come up with a plan that helps you manage the extra financial costs involved, but keeping your loved one safe at home often falls on you alone. Merrill Lynch Wealth Management’s director of financial gerontology, Cynthia Hutchins, recommends taking the following simple steps to care for your family member even as you grapple with the financial challenges of caregiving. For more tips, insights and advice, read the "The Journey of Caregiving: Honor, Responsibility and Financial Complexity,” a Merrill Lynch study conducted in partnership with Age Wave.

MORE INSIGHTS

MORE INSIGHTS

5 questions to ask before becoming a stay-at-home parent.

Read This Next

While it was difficult for us to imagine not being here for our son, we quickly realized how important it was to name a guardian. And not just any guardian—the right guardian: Someone who would be able to provide the love and support we hope to provide. Someone who shares our values and can pass them on to him. Someone who can keep our memories alive. Picking a guardian for our son may have been the most important parenting decision we've made so far.

Almost as important as naming a guardian is naming an executor—the person who wraps up your affairs, pays bills and expenses, and makes sure your property is transferred to those named in your will. A will allows you to stipulate how your assets will be managed and used to see your child through to adulthood. More specifically, you can use a will to outline exactly how your children can gain access to whatever money you may leave, and at what stage in life.

The terms can be quite specific: Money could be allocated for private school, to cover the cost of flying to visit grandparents, or even to help the guardian with additional expenses associated with raising your children. But regardless of the details, Kim-Wall says, it's important to start somewhere. "It's easy to spend so much time trying to get each provision perfect that you become paralyzed," she says. It's best to get a basic version down on paper, and then revisit it every few years to address changes in circumstances.

"We're sleeping better knowing we've taken steps to protect our little family."

Get your insurance in order. Next, it was time to consider life insurance. For the first time, we took a good, hard look at all that paperwork from the human resources departments at our employers and saw that my husband's employer offered $500,000 in coverage, while I had a little less.

Those amounts would probably cover only a few years of lost income, says James D. Gothers, director, Merrill Lynch Personal Wealth and Retirement. So we considered what would be required in the long term to help minimize major disruptions to our family’s lifestyle if one of us died. One tip: Don't underestimate the need to insure the spouse who has less income or stays home. Childcare needs and other day-to-day rhythms change when a parent dies, straining the surviving spouse both financially and emotionally.

Don't postpone college planning. When I was fastening my son's diapers, sending him off to college seemed light-years away, but I couldn't think of a better way to help secure his future than to give him a good education. And I knew we'd be foolish not to think about those costs sooner rather than later, given tuition's steady march skyward. Years from now, when my son packs his bags for the college campus of his choice, we could be facing a bill of $300,000 to $400,000.

"Those numbers seem so daunting and unrealistic that a lot of people just do nothing," says Richard J. Polimeni, director, Education Savings Programs at Bank of America Merrill Lynch. Polimeni, who has two children in high school, suggests starting with a specific goal in mind.

"Picking a guardian for our son may be the most important parenting decision we've made so far."

His family, for example, has set out to invest enough to cover four years of tuition and fees at an average-priced private school for each child. Once you have your goal established, you can then figure out what you need to put away each month to help you achieve it. "Even if I can only put aside a portion, that's money I or my child won't have to borrow down the road," he notes. After my conversation with Polimeni, my husband and I set up a 529 savings account and started making automatic monthly transfers, and we feel better having taken that step. Because of the new tax bill, 529s now cover elementary and high school tuition up to $10,000 per year , in addition to college and graduate school costs.

My son is now five years old, and I recently had another child—a daughter named Ivy. Even with two children, my life has a more regular rhythm than it did during those frenzied early days and nights of first-time parenthood. We're still adding new items to our financial checklist every day—like remembering to calculate the childcare credit come tax time. But with each planning item we address, I feel that we've done a little something more for our family. And that leaves us more mental energy to focus on our growing children—and all the possibilities that lie ahead for them.

Simona Covel is a financial writer and editor based in New York.

3 Questions To Ask Your Advisor

  1. How can I best plan for health-care costs for my new baby?
  2. Do we have enough life insurance and disability insurance?
  3. What strategies should I consider to help pay for my child's college education?
Switch to Accessibility Friendly View

“These simple steps can help you keep your loved ones safe, as you grapple with the larger financial and emotional issues of caring for someone with Alzheimer’s or another form of dementia,” says Cynthia Hutchins, Merrill Lynch’s director of financial gerontology.

These include an advance medical directive, which describes your loved one’s treatment preferences, a durable power of attorney, which specifies who is allowed to make medical decisions for the patient, and an updated will. Talk to your advisor about other documents that might help, plus steps you might take to protect your assets in the future.

Consider installing smoke detectors with flashing lights to help alert loved ones who may have impaired hearing. Find out about the cost of making other structural changes that could increase safety.

This will inform a medical professional about any specialized needs your loved one might have in case she wanders off.

Install childproof locks on medicine and liquor cabinets, on kitchen cabinets containing cleaning supplies and on drawers containing knives, scissors or matches.

Remove scatter rugs, exposed extension cords and clutter. Install grab bars in bathrooms and increase lighting in stairwells, entries and halls. Use night-lights where needed.

Turn down the thermostat on your water heater to prevent scalding from hot water.

Create and post a list of phone numbers for fire, poison control, your hospital and a designated friend who’s willing to help.

Read “The Journey of Caregiving: Honor, Responsibility and Financial Complexity” to learn more about how you can navigate life’s toughest and most rewarding job.

LISTEN TO THIS AUDIOCAST for insights on the longest-running bull market in American history

Download Transcript

Women can’t afford to ignore these issues, says Lorna Sabbia, head of Retirement & Personal Wealth Solutions, Bank of America Merrill Lynch. “There’s a huge wealth gap between men and women, caused by such things as the pay gap, and the fact that women tend to spend more time out of the workforce caring for family. Our saving and investing is impacted by these things, which makes it all the more important for us to take control of our finances early on.”

Warren realized she needed to pay closer attention to her finances when, after a number of years of investing, she realized “I wasn’t really making money. I would have done as well if I had just put cash under my mattress.” It turns out Warren had been paying almost as much in fees as she’d been making on her investments.

A cross-country move from Arizona to Florida provided her with a fresh start. Working with a new financial advisor, she shifted her investments into a range of low-fee options, and she’s now much more comfortable with her returns.

That new advisor, Mitch McLendon, of Merrill Lynch Wealth Management, has been a valuable sounding board for Warren’s business decisions as well as her more personal long-term goals. He has regularly offered advice on everything from setting up loan financing to talking through the various choices she might have as she phases into retirement and can focus on giving back as a volunteer to various animal charities close to her heart.

One of the biggest challenges many women face when it comes to money: “I’m just super busy. I work 11- to 12-hour days. I have enough on my plate.”—Christi Warren, veterinary ophthalmologist

Saving and investing more
Time crunch aside, all too often the financial deck is stacked against women of all ages. For starters, the pay gap remains a stubborn stumbling block. In 2017, women earned 82% of what men earned, according to a Pew Research Center analysis.1 “Very few women push back on salary offers compared to men,” Sabbia says. “That has huge implications when it comes to your ability to save.” Boning up on negotiating skills can help turn the tables.

Complicating matters, the career breaks many women take to care for family give them fewer years to fund a retirement plan. Career interruptions also cause women to lose potential raises and can reduce how much they’ll collect from Social Security. When you earn less, you have less to save—and the natural inclination is to guard it by choosing investments that are more conservative. Over the long haul, those investments tend to have a lower growth potential.

“As a result, women—who have a longer life to look forward to and fund—can end up with smaller nest eggs, and they deeply regret not having invested more,” says Kirstin Hill, managing director, Global Wealth and Investment Management at Bank of America Merrill Lynch. “Something as simple as making sure we take advantage of critical wealth escalators, like company matches in our 401(k)s, in the same way that men do, can help us become more financially secure.

“So can working with an advisor who understands women’s different financial journeys and can help you create a portfolio that has the potential to last your lifetime,” she adds. “Financial independence is a goal worth pursuing. It can unlock doors for us to achieve all of our aspirations, as professionals, as entrepreneurs, as policy influencers, as single women, as mothers, as partners and spouses.”

ml_household-giving-charts
Alt Test Text
Test Description

Women can’t afford to ignore these issues, says Lorna Sabbia, head of Retirement & Personal Wealth Solutions, Bank of America Merrill Lynch. “There’s a huge wealth gap between men and women, caused by such things as the pay gap, and the fact that women tend to spend more time out of the workforce caring for family. Our saving and investing is impacted by these things, which makes it all the more important for us to take control of our finances early on.”

Warren realized she needed to pay closer attention to her finances when, after a number of years of investing, she realized “I wasn’t really making money. I would have done as well if I had just put cash under my mattress.” It turns out Warren had been paying almost as much in fees as she’d been making on her investments.

A cross-country move from Arizona to Florida provided her with a fresh start. Working with a new financial advisor, she shifted her investments into a range of low-fee options, and she’s now much more comfortable with her returns.

 

How do I get comfortable with—and knowledgeable about—investing?

“Just talking about money with friends can be powerful and empowering. Talk leads to action.”—Lorna Sabbia, head of Retirement & Personal Wealth Solutions, Bank of America Merrill Lynch

Forty-one percent of the women surveyed for “Women and Financial Wellness: Beyond the Bottom Line,” a 2017 Merrill Lynch study conducted in partnership with Age Wave, said that “they wish they had invested more of their money” and only about half (52%, compared with 68% of men) said they felt confident about investing. “Just talking about money with friends can be powerful and empowering,” says Lorna Sabbia, head of Retirement & Personal Wealth Solutions, Bank of America Merrill Lynch. “Talk leads to action.”

To get the conversation going, you might start an investing book club or circle discussion group. A money-circle group gives you and your friends the opportunity to share financial goals and ideas, ask questions and learn from one another.

You can also try creating a stock watch list online. Check the performance of the stocks you’ve selected on a weekly basis. It costs you nothing to do that—and it’s a great way to begin to get a sense of how the stock market works.

My employer offers a 401(k) plan—how much of my salary do I need to put away for my future?

Ideally, you should try to save at least 15% of your salary every year. This is particularly sound advice for women, who live longer than men and can be at risk of outliving their assets. But the wage gap can make saving difficult. Last year women earned 82% of what men earned, according to a Pew Research Center analysis.1 “That puts women at a retirement savings disadvantage,” says Lorna Sabbia, head of Retirement & Personal Wealth Solutions, Bank of America Merrill Lynch. If you’re earning less, you’re likely to save less as a result.

“Try to increase your savings a little every year—when you get a raise, increase the amount you put away for your future.”—Lorna Sabbia, head of Retirement & Personal Wealth Solutions, Bank of America Merrill Lynch

Sabbia recommends sharpening your negotiating skills. “Then ask for a raise, if you think you deserve one. Try to put as much away as you can toward your retirement—you’ll be glad to have the financial resources you need when you reach retirement.”

If 15% isn’t possible, at least see if you can contribute enough to qualify for the full match, if your employer offers one. Many employers require you to put in between 4% and 6% of your pay to get the maximum match. “It’s like free money,” notes Sabbia, “so do your best to capture it.” And then try to increase your savings a little every year—when you get a raise, increase the amount you put away for your future.

If I marry, should I keep my finances separate from my spouse’s?

This is a tricky one. It’s certainly appropriate to have joint accounts and a mortgage in both your names. And separation of money can trigger feelings that one partner doesn't trust the other. But generally, it’s smart to keep separate retirement accounts, a bank account, and at least one credit card—plus a utility bill—in your own name.

“There are several reasons for the ‘me, you and us’ approach.”—Kirstin Hill, managing director, Global Wealth and Investment Management at Bank of America Merrill Lynch

There are several reasons for the “me, you and us” approach, says Kirstin Hill, managing director, Global Wealth and Investment Management at Bank of America Merrill Lynch. It’s important to preserve your access to your own spending money. It’s also not unusual for couples to have different investing styles—you may prefer to invest more aggressively than your spouse, for instance—and having your own brokerage account allows you to express that style. It’s critical to maintain a financial identity in your own name for another important reason, as well: Should the unthinkable happen and you divorce or become widowed, having a solid credit history and financial accounts in your name can help smooth the way as you transition to a solo financial life again.

Can I afford to be a stay-at-home mom for a while? Will that hurt my career and my future financial security?

Chances are you can, as long as you and your spouse have planned ahead financially. If you’re thinking of taking a career break, it’s a good idea to sit down with an advisor and discuss the impact relying on one income, instead of two, might have on your family’s finances. Keep in mind that during that period you won’t be socking away money for retirement through an employer plan. What you can do, says Kirstin Hill, managing director, Global Wealth and Investment Management at Bank of America Merrill Lynch, is have your spouse contribute to a spousal IRA, instead.

Staying in touch professionally by attending conferences or consulting can help you if or when you decide to re-enter the workforce, she adds. Read “Can You Afford to Be a Stay-at-Home Parent?” for more insights.

  • Connect with the right advisor for you
  • See how online degrees are moving into the mainstream

Connect with an advisor and start a conversation about your goals.

Give us a call at

1.866.706.8321

9am - 9pm Eastern, Monday - Friday

Have questions for your financial advisor?

Connect with to continue the conversation.

Investing involves risk, including the possible loss of principal.
Past performance is no guarantee of future results. 
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.
Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.
Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice versa.

X

You need to answer some questions first

Then we can provide you with relevant answers.

Get started