VESTED Summer 2021

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Friendship Knows No Age

Jesse O’Neal: Tending Hearts and Souls PLUS A Spouse’s Guide to Loss Conventional Wisdom Navigating Skilled Care Life on the Wire

SUMMER 2021

At CAPTRUST, we believe we have a profound responsibility to share our success with those less fortunate than we are. One way we do that is through the activities of the CAPTRUST Community Foundation, our in-house, employee-run charitable foundation. Its mission is to enrich the lives of children in communities we serve. The foundation, a registered 501(c)(3) charity, was formally organized in 2007 to provide our employees with opportunities to participate as a group in community outreach efforts and to offer their time, passion, and financial support as a way to give back.

“Children are likely to live up to what you believe of them. ”

Lady Bird Johnson, Former First Lady

We invite you to like the CAPTRUST Community Foundation on Facebook.

COMMUNITY FOUNDATION

captrustcommunityfoundation.org | toll-free: 855.649.0943 4208 Six Forks Road, Suite 1700 | Raleigh, NC 27609

LETTER FROM THE CEO

Volume 7, Issue 2 | Summer 2021 PUBLISHER

With falling COVID-19 case counts, ongoing progress on vaccinations, and the rollback of mask mandates, I’m sure we’re all breathing a little easier and, hopefully, getting back to some version of normalcy.

J. Fielding Miller Chief Executive Officer EDITORS John Curry Editor-in-Chief

In fact, the firm is making plans to get back into our headquarters office in Raleigh by mid-July. I very much look forward to seeing everyone in person again. If a business-as-usual summer trip to the beach, mountains, or city is in your plans, I hope you’ll take VESTED along to catch up on the latest thinking and news from CAPTRUST.

EDITORIAL ADVISORY BOARD

This issue’s Second Act hero is Jesse O’Neal.

After a 35-year business career, O’Neal now tends to hearts and souls as a chaplain at WakeMed here in Raleigh. He spends his days with patients and hospital staff, providing necessary emotional and spiritual care as they cope with trauma and loss, including serious illness and death.

This issue also features a wide range of other topics, including: • the merits of intergenerational friendships; • preparing for the death of a spouse or partner; • boxing as a way to stay fit and sharpen motor skills; • selecting the right nursing home for a family member; and

Alysa Cronin Managing Editor

Finally, in this issue’s investment feature, Investment Strategist Sam Kirby explores how the conventional wisdom about investing and personal finance has—and hasn’t—changed despite the many major developments in the world in recent years.

As always, we appreciate your article ideas, reactions, and feedback. Please keep the suggestions coming.

Jeremy Altfeder Senior Financial Advisor

Ted Lew Vice President, Financial Advisor

Buck Beam Senior Vice President, Financial Advisor

Cara McAuley Manager, Advisor Group

Kathleen Carlson Vice President, Financial Advisor

Greg Middleton Senior Director, Advisor Group

Mark Chamberlain Principal, Financial Advisor

Steven Morton Principal, Financial Advisor

Mike Gray Principal, Financial Advisor

Kathy Waters Senior Financial Advisor

Kathleen Hopkins Manager, Advisor Group

Edward Welch Managing Principal, Head of Wealth Management

ART DIRECTION AND MARKETING Lonzetta Allen Associate Art Director

Elizabeth Altman Distribution Manager

John Curry Art Director

Kaylin Ridge Designer

• avoiding FOMO in your financial life.

This issue’s must-read feature, “Life on the Wire” by longtime contributor Jeanne Lee, explores an extraordinary and unique family’s legacy through the experience of Nik Wallenda, seventh-generation aerialist and son of the famed Flying Wallendas circus troupe.

All the best,

J. FIELDING MILLER CAPTRUST Chief Executive Officer

WITH THE ASSISTANCE OF Azul Photography Raleigh, NC

Worth Higgins & Associates, Inc. Richmond, VA

Gabrielle Burke Pittsburgh, PA

Getty Images Seattle, WA

Justin Gartman Raleigh, NC

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CONTENT AND CONTRIBUTORS

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18

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JOHN CURRY

NANCI HELLMICH

SAM KIRBY

As chief marketing officer, John Curry is responsible for all areas of strategic marketing and branding for CAPTRUST. In the industry since 1986, Curry has served in senior management roles with firms such as ProShares and AllianceBernstein and has experience in areas of strategic marketing, including product development and design, market research, branding, and sales campaign management.

Nanci Hellmich, an award-winning multimedia reporter, covered personal finance, retirement, nutrition, and health for USA TODAY for more than 30 years. She now enjoys writing for AARP, encore.org, and other organizations. She has been named a top online influencer on weight loss and nutrition. Hellmich has appeared on numerous television shows, including NBC’s TODAY Show.

As leader of CAPTRUST’s Investment Strategist team, Sam Kirby works with the firm’s financial advisors to assist clients with investment strategy, portfolio construction, and monitoring. He has 15 years of financial services experience. Kirby earned a Bachelor of Arts degree in journalism from the University of North Carolina and a Master of Science degree in management from North Carolina State University. He is a CFA charterholder.

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Features 4

Columns

FRIENDSHIP KNOWS NO AGE

15

PASSION PURSUITS

33

MONEY MINDSET

JESSE O’NEAL: TENDING HEARTS AND SOULS

23

GLEANINGS

36

LASTING LEGACY

A SPOUSE'S GUIDE TO LOSS

24

EXPERT ANGLE

39

CLIENT CONVERSATIONS

CONVENTIONAL WISDOM

32

MARKET REWIND

42

CAPTRUST HAPPENINGS

by Kim Painter

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Power of the Punch

by Jeanne Lee

FOMO No More

by John Curry

Life on the Wire

by Jeanne Lee

by Nanci Hellmich

18

by Kim Painter

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Navigating Skilled Care

by Sylvana Smith

by Sam Kirby

JEANNE LEE

KIM PAINTER

SYLVANA SMITH

Jeanne Lee is a freelance writer living in the lovely college town of Oberlin, Ohio. She has written about consumer and business topics for 20 years, including stints at Fortune and Money. Her work has appeared in publications such as USA Today, Fortune Small Business, and Health. She loves thinking about ways for people to hack their finances and daydreams of paying off her mortgage before she has to pay for college for her two boys.

Kim Painter is a freelance writer specializing in health and lifestyle issues.

She was a USA TODAY staffer for many years and has continued to contribute to the newspaper as a reporter, columnist, and blogger. She lives in McLean, Virginia, where she practices what she preaches: wearing sunscreen, eating broccoli, and getting at least 10,000 steps a day.

Sylvana Smith is a freelance writer living on an antebellum farm in central North Carolina. Educated at Carnegie Mellon University and the University of North Carolina, she writes marketing communications for Fortune 100 companies. She has been a professional journalist and marketing writer for more than 20 years.

All publication rights reserved. None of the material in this publication may be reproduced in any form without the express written permission of CAPTRUST: 919.870.6822. ©2021 CAPTRUST Financial Advisors. The opinions expressed in this report are subject to change without notice. This material has been prepared or is distributed solely for informational purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. CAPTRUST does not render legal, accounting, or tax advice. If you require such advice, you should contact the appropriate legal, accounting, or tax advisor. The information and statistics in this report are from sources believed to be reliable but are not warranted by CAPTRUST Financial Advisors to be accurate or complete. Performance data depicts historical performance and is not meant to predict future results.

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Friendship Knows No Age

by Kim Painter

When Marisa Varalli, 44, unexpectedly found herself living alone in Hawaii during the pandemic spring of 2020, she was eager to make new friends. So, when she saw a man walking by as she stood on her balcony one morning, she called out, “Good morning,” and was delighted when he said “Good morning” back.

“It turned out he was my upstairs neighbor. Pretty soon, we got together to share food, and I met his wife and their best friends,” says Varalli. Before long, the group was boating, snorkeling, and enjoying other adventures together.

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The fact that her neighbor was 83, and that his wife and their friends were in their 60s, wasn’t a problem—it was a bonus, Varalli says.

“I have plenty of really close friendships with folks who are in their 60s, 70s, and 80s,” says Varalli, a high school Spanish teacher living in Honolulu while on sabbatical from her job in San Francisco.

Friends of varying ages, she says, share perspectives and stories that broaden her horizons and make life more fun.

Varalli and others who seek out intergenerational friendships are on to something, say social scientists, mental health advocates, and others working to break down artificial age divides.

Finding Common Ground A dozen years ago, the word intergenerational was unknown to most people, says Elly Katz, of Los Angeles. Back then, Katz, now 70, was a graphic designer working in Boston and itching to do something new and meaningful. She had a vague idea that she wanted to combat ageism.

Her epiphany came one day when she was driving her 16-year-old son to school: What if, she thought, she could get teens to share their phenomenal energy with older adults?

76-mile bike ride, liked some of the same TV shows she did, and had once struggled with college chemistry, just as she did. BryantAzmar learned that Akkinespally was thoughtfully planning a 25th anniversary party for her parents and was a sympathetic listener when Bryant-Azmar talked about missing her late husband.

Bryant-Azmar, who has participated in the program four times now, says she’s learned that “there are some young people out there who are just wonderful.”

Akkinespally says she’s found a new role model in Bryant-Azmar, who skis, hikes, and travels widely. “When she told me how active she was, my mind was totally blown,” the younger woman says. “She has inspired me to take my health more seriously because I want to be as active as Nita is when I’m her age.”

“

I never expected in my wildest dreams that I would connect with someone that young about these things I’d been going through these umpteen years.

Clif de Cordoba

”

The result was a matching program called Sages & Seekers, which Katz started with one private school in Boston and later expanded to Los Angeles. The program now includes college students, as well as high schoolers, paired with adults aged 60 and above. And because the pandemic forced it to go online, participants now come from all over.

Michelle Cavelier, 18, an American of Colombian descent, who just finished her last two years of high school in Bogota, and Clif de Cordoba, 76, a retired educator from Los Angeles, who has Puerto Rican roots, say they also formed a true connection in their video chats. They chose to speak entirely in Spanish and spent a lot of time discussing struggles with their cultural identities, the two say.

The program brings small groups of younger and older people together for brief gab sessions and then allows self-selected pairs to bond in longer sessions over several weeks. There are no mentors or mentees—the idea is to encourage friendship and understanding among equals, Katz says.

“I never expected in my wildest dreams that I would connect with someone that young about these things I’d been going through these umpteen years,” de Cordoba says.

Older people often come to the program believing that “kids are disrespectful and not interested in doing anything off their phones,” Katz says. Teens and young adults often expect to have nothing in common with elders, she says, but both groups are regularly proven to be wrong.

Cavelier says: “It doesn’t matter the age; you can connect with anyone, as long as you are able to open your heart.”

That was the case for Nita Bryant-Azmar, 76, of Los Angeles, and Mrudula Akkinespally, 19, a pre-med student at UCLA who lives in San Diego. Bryant-Azmar, a retired nurse and administrator, says that after some negative experiences in the workplace and elsewhere, “I had decided that people under age 30 were not my cup of tea.” Akkinespally says she thought people over age 40 were lazy and boring.

But over the course of their online chats this winter, Akkinespally learned that Bryant-Azmar had celebrated her last birthday with a 5

Expanding Your Friend Zone Most of us, of course, don’t meet our friends through a formal matching program. When we are young, we meet friends at school and through activities. Later, we make friends at work, in our neighborhoods, and through our various roles: Parents meet parents, retirees meet retirees, worshipers meet other worshipers, and golfers meet other golfers.

Often, those paths lead us to form friendships almost exclusively with people of our own approximate age. Killam says: “People don’t even think to diversify the ages of their friends.”

Levine agrees: “Unfortunately, there is a natural tendency to seek out friends who look, act, and talk like us. Being open to intergenerational friendships and other differences expands the potential pool.”

Thinking outside the age box comes naturally to some but takes more effort for others.

“There are so many wonderful opportunities if we just think about them,” says Colby Takeda, a senior manager with Blue Zones Project

by Sharecare, an organization that promotes healthy communities.

Takeda, based in Honolulu, says any outing in your neighborhood is an opportunity to seek out new faces of various ages—not just the

“

When you are in the community garden and see the lady in the plot next to you, just say, ‘Hello.’

Colby Takeda

”

other stroller pushers, power walkers, or whoever looks the most like you. “When you are in the community garden and see the lady in the plot next to you, just say, ‘Hello,’” he suggests.

Likewise, when you are looking for groups to join and activities to pursue, consider whether they might attract people of various ages.

And, Takeda says, don’t dismiss a group you think is only for older or younger people.

Varalli had that kind of open mind when, during her first months in Hawaii, she joined a bicycling group called the Red Hot Ladies Cycling Club. Originally formed for women over age 50, it now includes women and men with an age range of 27 to 78, says cofounder Patricia Johnson.

Johnson, who happens to be the oldest member, says she started cycling in her early 60s to connect with young tech workers when she was a personal development consultant in California.

A LOOK AT INTERGENERATIONAL FRIENDSHIPS Did you know that nearly one in four U.S. adults has a close friendship with someone who is 15 years younger or older than they are? Read on for more findings about friends of varied ages, according to AARP. They most often met at work (26 percent), as neighbors (12 percent), at a place of worship (11 percent), or through mutual friends (10 percent).

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Friendships between various ages are reported by similar numbers of men (38 percent) and women (36 percent).

Intergenerational friends do and discuss the same sorts of things together that other friends do— going to the movies (39 percent), dining (26 percent), and talking about hobbies and interests (27 percent), as well as their pasts, their families, and their work (all 21 percent).

Gen xers (now ages 41 to 56) are most likely, at 41 percent, to have friends from other age groups, closely followed by boomers (now ages 57 to 75) at 39 percent. Nearly a third, 32 percent, of millennials (now 25 to 40) have such friendships.

The most common benefit cited by those with intergenerational friends: They help me see another perspective. Many see older friends as role models, or say younger friends keep them up on trends and boost their energy.

Summer | 2021

“The young people were not using golf as a way to connect,” she says.

She now helps lead weekly rides in which participants, regardless of age, can break into self-selected groups that ride at various speeds and challenge levels. The slower groups “are not necessarily older,” she says— something that helps break age stereotypes and makes the rides more fun and interesting. She and Varalli often ride in the same easygoing group.

“Cycling definitely is a place where age doesn’t make much of a difference,” Johnson says.

Riding with younger people has helped keep her connected with the broader world. For example, Johnson says, during the early months of the pandemic, members who were healthcare workers talked about the stresses of their jobs; other working adults in the group shared their financial worries. Those are perspectives a group composed entirely of retirees would have missed, Johnson says.

“

It doesn’t matter the age; you can connect with anyone, as long as you are able to open your heart.

Michelle Cavelier

”

Varalli says she is convinced that having friends across the age spectrum just makes life richer.

“When we segregate by age, we tend to start segregating in other ways,” she says, “and putting ourselves in very small boxes.”

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SECOND ACT

Tending hearts and souls

by Nanci Hellmich

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Winter | 2021 Summer | 2021

After a successful 35-year career in the business world attending to spreadsheets and project plans, Jesse O’Neal now tends hearts and souls as a chaplain for Emergency Services at WakeMed Health & Hospitals in Raleigh, North Carolina.

His days are packed with emotional conversations, prayers, and acts of kindness for patients and their families as they confront all kinds of loss, including serious illness and death.

“Each day, people surprise and inspire me with their courage, their humor, their generosity, their grace, and their love,” O’Neal says. “The work is uplifting.”

He felt called to this ministry after reinventing himself several times during his business career. “Since I was a kid, I have always thought that life is about adventure. I have always been looking for the next adventure,” O’Neal says.

“Being back in the hospital is a kind of coming home for me,” O’Neal says. “I was pre-med as an undergraduate, and I had worked in Washington, D.C.-area hospitals as an orderly and then as a surgical assistant.” When he didn’t get accepted into medical school, he found industrial chemical sales a natural fit. He had success there and was recruited at a young age to be a sales manager in a small company.

Recognizing that business would be his career for a while, he earned a Master of Business Administration degree from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. From there, he went to Northern Telecom and then to the American Social Health Association, where he helped get the National AIDS Hotline up and running.

But O’Neal missed his roots in the natural sciences and, after several years, found his way into the environmental consulting field, specifically around ambient air quality. He and his colleagues at a small firm in Chapel Hill guided sections of industry on air quality science, policy, and regulations. Seeking a solid foundation in the field, he went to graduate school and earned a Master of Science degree in environmental science. In his final role before becoming a chaplain, he was a project manager on a hydrological forecasting project in Eastern Europe.

Turning an Avocation into a Vocation While juggling demanding careers and raising three children with his wife, Janice Whitaker, O’Neal participated in pastoral care work with his church, Christ Episcopal, in downtown Raleigh. One of these pastoral care roles was that of Eucharistic Visitor, where laypeople take the Eucharist to those who are homebound or in the hospital.

“I think I wore the rector out with my unending stories about ‘how powerful this seems, how meaningful it was to me and to those I minister to.’ He suggested I investigate clinical pastoral education (CPE) at one of the local hospitals. I hemmed and hawed for about a year,” O’Neal says.

Finally, he had the opportunity to talk with a veteran hospital supervising chaplain. About 20 minutes into their conversation, she said, “Jesse, you know what your problem is? You are afraid you are going to get into this, and you are going to fall in love with this work. Then, what will you do?”

He accepted the challenge and took his first CPE training at WakeMed during the summer of 2014.

“I did fall in love with the work,” O’Neal says. “I fell hard.” His first internship with WakeMed’s Clinical Pastoral Education Program led to a second and then a yearlong chaplain residency.

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The timing was right. His three children were grown, his wife had retired from a successful career as an executive with a pharmaceutical company, and they had saved well.

“Emotionally, I don’t think I could have done this in my 20s or 30s, maybe not even in my 40s or 50s, because I hadn’t accumulated the life experience that supports me in the work,” O’Neal says.

He draws on his project management experience for his new field.

“There are lots of ways to be successful as a project manager,” O’Neal says. “My style was to be aware of and invest in the emotional dimensions of the team, hoping to understand what keeps them moving forward and what holds them back,” he says. “Knowing them emotionally was a dimension of that.”

He says, now, instead of caring about people as an adjunct of the work, caring for people is the work.

Like his other endeavors, O’Neal wanted to be sure he was well trained for his new career, so he recently completed his Master of Arts degree in pastoral and spiritual care at the Iliff School of Theology in Denver. Before COVID-19 hit, he traveled to Denver for several days each 10-week quarter for in-person classes. Under 10

Summer | 2021

COVID-19 restrictions over the past year, all hybrid classes have become completely online.

Finding Those in Need Every day is unique for a hospital chaplain. O’Neal leans on emergency room nurses, whom he calls “absolute rock stars,” for guidance on where the pastoral needs might be.

He often meets with patients who have had heart attacks, strokes, or other serious illnesses. He also meets with the patients’ families to help them negotiate their feelings as well as hospital procedures.

Once family members arrive, he stays with them. In all these situations, there is loss: loss of function, loss of capabilities, and, sometimes, loss of life, O’Neal says. “My job is to provide the emotional and spiritual support that allows them to initiate their grieving process.”

“When people lose a loved one, their grief can be overwhelming. The reason people grieve is that they had the courage to love as if that love could last forever. I appreciate that courage. And I want to be around people who have that kind of courage,” O’Neal says.

When they’re grieving, they’re coming to terms with the reality that this grief is going to be with them in some form forever, he says.

“When you live in a world that has great love, you also live in a world that has great grief.”

Being there is important, O’Neal says. “I cannot ever fully understand the suffering of another human being, the depth and the texture of their suffering,” O’Neal says. “They are on their own unique path through this world. I don’t know what their suffering can or should mean in this journey.”

Although he doesn’t leave anyone’s side during difficult times, he knows it’s a process that people have to go through themselves with the help of their families, friends, and beliefs. “They have to find emotional traction. They have to find something that allows them to get through to the next minute, and the next, and the next,” O’Neal says.

“

When people lose a loved one, their grief can be overwhelming. The reason people grieve is that they had the courage to love as if that love could last forever. I appreciate that courage. And I want to be around people who have that kind of courage.

Jesse O’Neal

”

“When our kindred humans, in the face of devastating grief, find that inner resolve that their life can go on, that their life must go on, and gather their family and their love and leave the hospital burdened with grief, but strengthened by hope, this fills me with wonder,” O’Neal says. “I cannot explain it without God.” 11

Unfortunately, comforting people with physical touch hasn’t been possible this past year because of COVID-19. Everyone keeps the recommended distance, says O’Neal, and hugging has been replaced with elbow bumping.

O’Neal says physical touch is very important, and it can be reassuring to everyone. “I am a hugger, but, during COVID, we try to keep our distance,” he says.

Offering Company to Others When he has time, O’Neal does what he calls “cold calls,” visiting patients and their families throughout the hospital dealing with less serious conditions.

Sometimes, these visits and conversations last for five minutes. Sometimes, they are an hour long. “I never know where conversations are going,” says O’Neal. “I try to be receptive to where the patient or family wants to go.”

During the visit, O’Neal usually learns something about the person’s faith. “Some people want to immediately open that door and want spiritual and emotional support, and some don’t.”

Often, the conversations lead to a request for prayer. “I do that with great delight. I am in prayer multiple times a day, really continually throughout the day, which is a great joy to me,” O’Neal says.

He lets patients initiate prayer requests. Sometimes, the requests come in as O’Neal is leaving the room and he asks them, “Is there anything else I can do for you today?” They might look at him and look at his badge and say, “Well, you are a chaplain. You could pray for us?”

“I can never predict what people want me to pray about. Sometimes, they’ll ask to pray about healing or good results for a test they’ve had.” But sometimes, their prayer requests catch him by surprise.

Sometimes, the requests come in as O’Neal is leaving the room and he asks them, “Is there anything else I can do for you today?” They might look at him and look at his badge and say, “Well, you are a chaplain. You could pray for us?”

In one case, the patient said, “I have been lying here for the last couple hours, and I can see that the people working here are good people. They have been exposed to all kinds of risks in the last year. I want you to pray for them.”

Another patient spent an hour explaining why he was an atheist. As O’Neal was leaving, the patient said, “You’re a chaplain. Aren’t you going to pray for me?”

He did.

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Often patients repay him in kind. “I can’t count the times patients have prayed for me and over me,” O’Neal says. “They lift me up with their humor, resiliency, and grace. It would fill up your heart to the breaking point.”

O’Neal has been trained to minister to people of every faith, including those who are Christian, Jewish, Muslim, Buddhist, and Hindu.

One day, early in the pandemic, he stopped to talk to a Hindu woman. She was quietly weeping against a wall in the emergency department because visitation was so constrained. O’Neal asked how he could be of assistance. “Would you pray for me?” she asked.

He told her he knew a little about Hinduism, but he didn’t know how to pray in her faith. She said to him, “You just pray how you pray. That will be enough.”

Giving It All He’s Got O’Neal is in awe of his medical colleagues. “I feel extremely grateful to be working with rock stars every single day. If you could see what this team is able to accomplish with their clinical skills and their compassion, it would touch your heart,” O’Neal says.

“I believe in the mission of WakeMed,” says O’Neal. “It’s an extraordinary place that began as a community hospital in the 1960s, with a mission of serving all. It has grown and expanded and is regularly mentioned in the same sentence as the well-known university-based hospitals in the area.”

His wife, Janice, says, “Jesse has been successful in various business roles but never as fulfilled as in the chaplaincy work. Each day, he feels that he’s making a difference by helping patients and families, some of whom are experiencing the most difficult times in their lives.

“He is a compassionate extrovert who is able to sense what people need and how to help them,” she says. “He loves his work and has found his calling.”

His daughter, Meaghan O’Neal Woodhouse, adds, “If I or one of my loved ones had to be in the emergency department, I would want someone like my dad there to help support us through the process.”

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“

I feel extremely grateful to be working with rock stars every single day. If you could see what this team is able to accomplish with their clinical skills and their compassion, it would touch your heart.

Jesse O’Neal

”

PASSION PURSUITS

Power of the Punch

by Jeanne Lee

The word is out. You don’t need to be a fighter to train like one.

Without setting foot in any ring, exercisers of all ages can reap the enormous benefits of boxing training—a fantastic way to stay healthy as you get older.

Air boxing and boxing-based fitness classes don’t involve sparring or the risk of getting clocked in the head. Jab, cross, uppercut, cross, cross.

Beginners may punch it out on a speed bag, learn proper form, and practice their footwork with conditioning drills while timing their moves to energetic music.

Noncontact boxing boasts virtues for anyone who wants to get stronger, fend off age-related cognitive decline, or improve handeye coordination—and feel exhilarated while doing it. According to experts at Rock Steady Boxing, a program that utilizes boxing

training to combat Parkinson’s disease, a passion for shadowboxing can even help fight off certain neurological conditions.

“My students love boxing because they just feel so powerful,” says Leigh Anne Richards, who has a Master of Education degree in health and physical education and specializes in training people in midlife and older. She brought the Rock Steady Boxing program to Montgomery, Alabama, a few years ago.

“When you’re 50 and above, it’s not so much about how high you can jump or how much weight you can lift; it’s about functional fitness—being able to work in the yard, play with grandchildren, 15

or carry boxes up to the attic,” she says.

Amazingly, HIIT workouts appear to correct the decline in My students are so attached to each other, cellular health that naturally Shadowboxing is safe for those comes from aging, making and they are cheerleaders for each other. with arthritis or osteoporosis muscle cells actually act while still getting your blood younger, according to research Leigh Anne Richards pumping and lifting your from the esteemed Mayo Clinic. mood. Exercises that use In fact, people in their mid-60s bodyweight, such as boxing, strengthen and stabilize the muscles and older who did HIIT workouts for 12 weeks had more and around joints and provide important weight-bearing exercise to healthier energy-producing mitochondria in their muscle cells stave off osteoporosis. Plus, the intense full-body workout that compared to those who did other forms of exercise, such as riding boxing provides uniquely connects body and mind in a way that a stationary bike at a moderate pace, The New York Times reported. can make you feel on top of the world.

While the punches are intensely physical, the shifting patterns Richards, 61, draws inspiration from seeing her clients transform bring intense focus to the mind. When Richards calls out a series themselves physically and mentally. One 85-year-old man, who of punches by number—one, two, four, two, two—students have to used a walker and had a shuffling gait due to his condition, came to concentrate and make their bodies respond. the class helped by a caregiver. With regular boxing practice, he gained increasing awareness of his balance, his foot placement, and “You’ve got to quickly process, what punch is a two? What is a four?” weight distribution, and he learned to aim punches at a target with Richards says. “Other times, we put dots with numbers on the bag. deliberation. Over time, his lost abilities began to return bit by bit.

While they look at the center dot, I’ll call out different numbers.

That works the brain and promotes hand-eye coordination.”

“It was unbelievable, the progress he made. He started picking up his feet and walking [into the gym] ahead of his caregiver—and he With one student, a former certified public accountant whose stopped using the walker,” says Richards. abilities with numbers were slowed by Parkinson’s disease, Richards offered the number sequence in different ways to Another student, in his late 60s, had been a competitive cyclist in encourage the use of multiple neural pathways. She did this by his earlier years, before Parkinson’s disease robbed him of mobility having him listen to the numbers, read them from a whiteboard, in one leg and caused him to hunch forward. “We work on and say them out loud, all while performing the punches. everything that older adults need, including balance, gait, walking, and agility,” says Richards. “Boxing-based drills enabled him to Pushing hard with bursts of intense exercise beyond one's comfort gradually regain his posture and ease of movement, together with a zone can increase dopamine production in the brain even more class full of other people who were similarly giving it their all.” My than medication, according to a Cleveland Clinic study of people students are all so attached to each other, and they are cheerleaders for each other, says Richards. “It is such a time of camaraderie.”

“

Benefits for Mind and Body Medical research backs up the power of fitness boxing as a way for older adults to gain vitality, strength, and balance. “Balance issues are common with everyone who starts aging,” says Richards. “With boxing, we may have you stand on one foot, keep one leg up, or stand on a balance object while you hit the bag first with one hand and then the other, so you’re constantly challenging your balance.”

As a form of high-intensity interval training (HIIT), boxing involves swapping between short periods of going full tilt and then doing something low intensity. “We do a burst of punching as hard as you can for one minute, then switch to jumping jacks for 30 seconds,” says Richards. “High-intensity workouts have been shown to improve and delay the symptoms of Parkinson’s, but they’re also anti-aging for everybody.”

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”

with Parkinson’s disease. The research subjects that did this type of exercise enjoyed better motor function that persisted for four weeks. “It’s what they call forced exercise because you’re making yourself go harder than you normally would for a short time— unlike, for example, when you’re just walking,” says Richards.

Another part of youthfulness is having the hand-eye dexterity that lets you pick up tiny objects. Those fine motor skills begin to slip away as the brain ages, but hitting a speed bag or repeatedly reaching out to aim at a target is known for improving coordination and that can translate into increased ease when doing daily activities.

Getting Started The popularity of fitness boxing has skyrocketed in recent years, and many gyms now offer different types of boxing classes for people of all fitness levels. To find a Rock Steady Boxing gym, which specifically serves those with a diagnosis of Parkinson’s disease, visit the website at rocksteadyboxing.org. There, you can find a gym by a zip code or city search.

You can also practice boxing at home, either with a fitness boxing video or some simple pieces of equipment from a sporting goods store or online retailer, says Richards. One of her favorite exercises uses a reflex ball, also called a boxing fight ball, which is basically a headband with a tennis ball attached by an elastic band.

Professionals and beginners alike practice punching, dodging, and weaving for an addictive workout that burns calories and improves hand-eye coordination.

The popularity of fitness boxing has skyrocketed in recent years, and many gyms now offer different types of boxing classes for people of all fitness levels.

Those who want to spar with a spouse, friend, or grandchild can use a pair of boxing pads or focus mitts that one person wears on their hands while the other throws punches—as hard or lightly as you want—for a great way to work up a sweat and improve aim, accuracy, and timing.

Fighting Off Disease At Rock Steady Boxing (RSB), Parkinson’s disease is the opponent.

Founded in 2006 by former Marion County, Indiana, prosecutor Scott C. Newman, RSB is a 501 (c)(3) nonprofit organization giving people with Parkinson’s disease hope by empowering them to fight back and improve their quality of life through a noncontact boxing-based fitness curriculum.

RSB initially began through the friendship of Newman and Vince Perez after Newman had been diagnosed with early-onset Parkinson’s at the age of 40. Refusing to let his friend go down without a fight, Perez turned to his experience as a Golden Gloves boxer to design a program that attacks Parkinson’s at its vulnerable neurological points. Exercises vary in purpose and form but share one common trait: They are rigorous and intended to extend the perceived capabilities of the participant.

Perez’s intuitive insight is now proven to have merit through an increasing body of medical research. In fact, in the last seven years, there is evidence that progress is made in all stages of the disease by those participating in the RSB program.

Another piece of home equipment that gained popularity during the pandemic of the past year is a speed bag, which is just a light punching bag on a base that’s filled with sand or water. You can hit it with padded gloves, hand wraps, or your bare fists, and it springs back after each hit. There are also inflatable punching bags— reminiscent of the blow-up colorful clown versions that 1970s kids loved. With home boxing equipment like that, you’re sure to be a hit with any visiting grandchildren.

17

A Spouse’s Guide to Loss

by Kim Painter

For one month each year, Chelsea Brennan, 30, and her husband, Jeremiah, 36, run what they call a financial fire drill. Chelsea, who is usually in charge of family finances, turns all bill paying, budgeting, banking, and investing over to her husband, who is usually fully occupied as a stay-at-home dad to their two young sons. At the same time, Chelsea takes over the tasks Jeremiah usually handles in their Storrs, Connecticut, home.

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The point of the exercise: making sure each spouse would know what to do if the other were not there—especially if one of them died.

“I think a lot of people are afraid to think about those situations,” says Brennan, a former hedge fund manager who quit her job to start the financial education website smartmoneymamas.com.

But thinking about a spouse’s death is something every married couple should do because not thinking about it can leave you unprepared for one of life’s most difficult transitions. When a spouse dies, money is not the only thing on your mind, but it can be more or less of a burden depending on what you do before and after the loss.

Couples who discuss and plan for every possible scenario, including dying together or separately, soon, or far in the future, after a long illness or quite suddenly, are less likely to be blindsided by the financial fallout, says Mike Gray, a CAPTRUST wealth management advisor working in Raleigh, North Carolina.

“When you do this kind of planning, you have to put on the dark glasses, not the rose-colored glasses,” he says. “The bad stuff, even though it’s remote, might happen.”

And when it does happen, knowing exactly what to do about money, at least, can make a horrible situation just a bit more manageable.

“

When you do this kind of planning, you have to put on the dark glasses, not the rose-colored glasses. The bad stuff, even though it’s remote, might happen.

Mike Gray

”

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Before a Spouse Dies Most people know the basics of estate planning: You draft and sign wills and set up trusts, perhaps along with letters of intent to make sure your wishes are fully understood. You also assign powers of attorney to those who would handle financial and healthcare decisions if you became incapacitated. Likewise, when you sign up for life insurance or open a new 401(k) account, you name beneficiaries for those funds in the event of your death.

But if the documents detailing your last wishes are sitting in physical or digital files somewhere, gathering real or virtual dust, that is a problem in and of itself.

For example, a spouse you expected to act as executor of your estate may no longer be suited for that role years later if he or she develops cognitive impairment. An adult child who you thought was too immature when you first drew up the documents might be a better choice.

Divorces, new marriages, deaths, births, and estrangements can also change your intentions. That’s why it’s so important to review your estate planning documents at least every few years, Gray says.

That includes often overlooked details, such as naming beneficiaries on pensions, insurance, and investment accounts.

Many people don’t realize that named beneficiaries will almost always get the designated funds, even if the deceased expressed different wishes in a will.

“There are horror stories out there about former spouses who are named beneficiaries and who get money intended for a new spouse or children,” Gray says.

But updating your directive documents is not enough. It’s also important to talk with your spouse often about what is going on in your financial life and what should happen if you die or become incapacitated.

Some people go as far as insisting their family and, sometimes, business associates run a dress rehearsal of sorts, says Mark Chamberlain, a CAPTRUST wealth management advisor in Chesterton, Indiana.

Chamberlain says he heard of one executive who called his family and associates together one day and announced: “My plane just disappeared, and I’m dead. What’s next?”

In about three hours, Chamberlain says, the group put together a draft document that would guide their actions if the death had actually happened.

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Loss of a Spouse Checklist Losing a spouse is one of the most stressful experiences in life, one you can never fully prepare for. But you can take steps, before and after a death, to protect your finances and peace of mind.

While Both Spouses Are Alive • • • • • •

Sign wills and review them every few years.

Write letters of intent for executors, including funeral wishes.

Set up a trust or trusts and mechanisms for money to flow to them.

Sign durable and healthcare power of attorney (POA) documents and review them every few years.

Review beneficiary designations on retirement accounts, insurance policies, and investment accounts, making sure they match your current wishes.

Gather contact names, passwords, and document locations your spouse would need after your death. Keep a hard copy in a safe place that is fireproof and waterproof.

As Soon as Possible after a Spouse Dies • • • • • •

Get multiple death certificates from your funeral director or vital statistics offices in your state or city. You may need a dozen to handle bureaucratic and financial tasks.

Notify Social Security and find out if you or any children are eligible for new or adjusted benefits.

Inquire about pensions or other benefits from your spouse’s current or former employers. If your spouse served in the military, contact Veterans Affairs about funeral assistance or other benefits.

Notify life insurers and health insurers to cancel the late spouse’s coverage.

Meet with a probate attorney if you are the executor of the will. If you are not, meet with the executor.

Make a list of bills your spouse was paying, and make a plan to continue payments or, in some cases, cancel services.

Soon after a Spouse Dies • • • • • • •

Prevent identity theft: Cancel your late spouse’s credit cards, email, social media accounts, and driver’s license. Contact the local election board and credit bureaus Experian, Equifax, and TransUnion.

Update names on deeds or titles for homes, vehicles, or other assets.

Ask a tax professional how the death will affect your tax situation and how you can optimize it.

Discuss managing your assets and your investment goals going forward with a financial planner.

If your spouse is named beneficiary on insurance and investment accounts or a healthcare decision maker, revise your legal and financial documents.

If your spouse owned a business, contact the business’s attorney and any partners to discuss transition plans.

Make a new household budget based on your change in circumstances and any changes in income.

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Couples who try the same thing might learn that the wife does not know the passwords for her husband’s bank and credit card accounts or that the husband does not know how his wife pays the water and phone bills online, Chamberlain says.

Experts recommend putting such vital information, including contact information for key people such as employers, attorneys, and financial advisors, in a single, safe place.

Smartmoneymamas.com founder Chelsea Brennan recommends compiling a family emergency binder containing everything from bank and email passwords to military records and memorial service wishes.

One more consideration: When a crisis hits, neither of you may be around nor fully capable, so besides making sure each other knows where all this stuff is, make sure someone else does too, Gray says.

After a Spouse Dies In the days and weeks after a spouse’s death, financial and other logistical tasks can seem overwhelming.

“When it happens, take a deep breath and realize you need to grieve and most of this stuff doesn’t have to happen the day after or the week after you lose your spouse,” Gray says.

“I think you need to understand that you are going to feel literally like someone has put you on a raft and dumped you in the middle of the Pacific Ocean,” says Marie, a 61-year-old attorney who lost her husband a few years ago. “I felt completely set adrift in a sea of uncertainly and confusion.”

Funeral directors also offer more help than many people realize. For example, they often notify Social Security of the death and order death certificates. Other essential early tasks include notifying employers and insurers and making sure bills get paid.

But Marie, who had been married for 11 years, says the fact that she and her husband had shared complete transparency and complete trust about their finances gave her confidence as she went through the settlement of his estate. “As insecure as I was, had I not known that I was financially secure, it would have been even worse,” she says.

Not everyone is as fortunate. Jan Warner, 70, a retired mental health professional who started a Facebook group for grieving spouses after her own husband died in 2009, says that surviving

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spouses sometimes find unpleasant financial surprises: “There are people out there who think their net worth is in the millions, and they find out they are bankrupt.”

Warner, of New York City, says she was blindsided by her own late husband’s decision to leave about $1 million she was expecting to other family members. While the decision did not leave her destitute, it added pain to an already painful time, she says.

Warner, who wrote a book called Grief Day by Day, says her advice for new widows and widowers is to set some goals but cut themselves some slack.

“I gave myself a chore for the day. One of them was paying my bills. I really didn’t have the capacity to do much of anything.”

Warner says she found inspiration from a wall plaque that said, “Have an Adequate Day.” Many bereaved spouses find that activities such as meetings with probate attorneys actually make them feel better, Gray says. Such professionals “have been through this dozens of times,” Gray says. “They know what to do and where to go. The conversation can give the bereaved a lot of comfort. There are people there to help you.”

Funeral directors also offer more help than many people realize. For example, they often notify Social Security of the death and order death certificates. Other essential early tasks include notifying employers and insurers and making sure bills get paid. But some tasks, such as updating names on deeds and titles, can wait a bit.

Once you have more immediate tasks handled, it’s important to meet with both a tax professional and your financial planner to assess your new situation and make plans for your future, Gray says. Meeting with a planner to go through assets, income, and a forward-looking investment strategy gives many people “a huge chunk of peace of mind,” he says. “It helps them see that they are going to be OK.”

Famous intergenerational friends: LeBron James and Warren Buffett; Bette Midler and 50 Cent; Martha Stewart and Snoop Dogg, and Lady Gaga and Cyndi Lauper, Elton John, and Tony Bennett.

The NFL’s Russell Okung is the first professional athlete in any major U.S. sport to be paid in bitcoin.

American Dialect Society's 2011 Word of the Year: Occupy.

The runner up? FOMO.

Staff at NBA team the Sacramento Kings, including players, will soon be able to receive their salary in bitcoin, club owner Vivek Ranadivé told Forbes in April.

This issue isn’t VESTED’s first goround with the boxing world. In fall 2019, former undefeated pro boxer and 2004 Olympic gold medalist, Andre Ward, graced our cover.

Fountaingrove Lodge in Santa Rosa, California, is the nation’s first lesbian, gay, bisexual, transgender (LGBT), and friendsfocused independent senior community with the option of continuing care services.

Jesse O’Neal carries a highlighted copy of Finding Meaning in the Second Half of Life in his briefcase. One of his favorite quotes is on page 184.

Older Americans who don't have wills or estate plans? Nearly 50%, according to TheStreet.

Nik Wallenda almost became a doctor.

He changed his mind in 1998 when, alongside his family, he helped recreate Karl Wallenda’s sevenperson pyramid.

At least 6,000 healthcare chaplains work in the U.S., with roughly 50% in hospitals, according to the Journal of Health Care Chaplaincy.

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EXPERT ANGLE

N AVI G AT IN G S K IL L E D C A R E

by Sylvana Smith

At some point, many of us will need to take on responsibility for an aging loved one. And when that time comes, there is an enormous amount of pressure to consider all factors and make the best decisions regarding his or her health and finances. Where will your mother, father, wife, or husband receive the highest-quality care? Where will he or she be treated like a resident, not just a patient? Where is the cleanest skilled nursing facility with the best food? Where will your loved one feel safe?

Kathy Waters, a wealth management financial advisor working in CAPTRUST’s Lake Success, New York, office, knows the circumstances all too well.

As her own mother’s cognitive mobility became impaired, Waters noticed the gas and water were sometimes left running in her home.

“It wasn’t safe for her to live on her own anymore,” says Waters. “She had started to become a danger to herself and possibly to others.”

The elder Waters was 89 years old when her family made the difficult decision to move her into an assisted living facility.

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Choosing Wisely Most of Waters’s clients only start to plan for long-term care once the loved one in question reaches 82 or thereabouts. But Waters says that whether you’re considering hiring aides or finding a long-term care facility, it involves a considerable amount of planning.

Ideally, she says the discussion of whether an individual should go to a facility or stay at home should happen closer to age 60 or 70.

“Although it’s hard to face the fact that health problems may

someday result in a loss of independence, if you begin planning now, there will be more options open in the future,” says Waters.

Of course, there are several key considerations when selecting a long-term care facility.

Waters suggests starting with recommendations from the hospital or doctor’s office and then from friends, relatives, social workers, and religious groups. Consider what is important to your loved one—nursing care, meals, physical therapy, activities and trips, religious services, location, hospice care, or special care such as for dementia. Once you’ve got your short list of choices established, here is what to consider next.

Quality of care. Waters

recommends doing your homework by making sure that the nursing home or assisted living facility is certified by the state and asking to see the inspection report and certification of any safe facility you are considering. Ask about the credentials and training of the staff, including doctors, nurses, and aides.

Can residents see their own doctors, or must they see the staff physician?

Do they have access to dentists, eye doctors, and other specialists? Does the facility have clear procedures that it follows in medical emergencies?

You can get this and more information through Medicare’s Care Compare site, which uses a five-star rating system to help the public find and compare nursing homes, hospitals, and other providers. The website, medicare.gov/care-compare, includes an overall rating for each facility and separate scores based on health inspections, staffing, and quality measures.

Transportation. Arranging transportation for medical services

can be a challenging process, especially for someone in a wheelchair or restricted to a bed. Waters says it can get complicated if a resident in assisted living needs to see a specialist, such as a urologist or cardiologist, or even needs to go for routine health checkups and the facility does not have people to escort them.

In fact, Waters tried something new last month when she called the neurologist’s office on behalf of her client. “I wanted to have the doctor go and speak to my client at her facility,” she says. “In this case, it did not work out, unfortunately.” It’s important to make sure you understand how transportation is arranged for nonemergency, routine, or unexpected medical services.

Location. Location is important for myriad reasons. It can

affect how often an individual is visited by family and friends, which, in turn, affects the resident’s mental and emotional wellbeing. The right location can also help ensure quality-of-care issues are more easily addressed as problems arise. Moreover, proximity to things like religious services, shopping, socialization, and opportunities for outdoor activity can be important factors for your loved one.

Waters considered each of these components when choosing living arrangements for her mother. “I was able to join my mother for breakfast and dinner, and my brother came for lunch.”

Location isn’t everything to everyone, however. “Many clients rely on financial advisors to guide them, particularly around understanding what they can afford,” says Waters.

Cost. Waters helps her clients plan

accordingly by either looking to purchase long-term care policies, which can be expensive, or doing estate planning and allocating money into Medicaid-protected trusts so they can go to a facility that is paid through Medicaid.

The major advantage to using income, savings, investments, and assets (such as your home) to pay for long-term care is that you have the most control over where and how you receive care.

Long-term care generally ranges between $6,000 and $12,000 a month nationwide, says Waters. In New York, Waters’s home base, nursing homes run from $15,000 to $20,000 a month. Full-time aides in your home can cost about $12,000 a month. Some facilities also offer a buy-in—where you actually buy the apartment. “It can be rather expensive,” Waters says. “One set of clients paid about $700,000.”

Safety and security. Ask when the facility was built or

updated. In general, the newer the building, the more fire-resistant it will be due to changes in building codes. Look for safety features such as wide hallways, doors that unlock from the inside, handrails, and grab bars.

Healthcare aides and nursing home caregivers are compassionate people, but they are also among the lowest-paid healthcare professionals—and that makes some of them vulnerable to temptation. “You have to be cognizant of valuables,” says Waters.

“Unfortunately, my mother’s wedding band was stolen.”

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To some degree, Waters says, you can counter this temptation by making healthcare workers feel important and valued. “I tell them they are my eyes and ears; I’m counting on them to communicate to me.” Don’t make them feel like the hired help, she says. “Make them feel like a person who is respected for taking care of a loved one.”

While it can be difficult to take objects of sentimental value like a wedding ring or a special watch, if it’s of any monetary value, Waters recommends replacing it with something comparable but less expensive.

“

Some extras, particularly those that Medicare or a long-term care policy cover, can really make a difference.

”

Kathy Waters

Soft aspects. What kinds of social and entertainment activities are planned for the residents? Is there a library? A place where residents can purchase personal items? Is there a safe place to enjoy the outdoors, such as an enclosed garden? Are meals served in a communal dining room or are residents served in their rooms?

You have to do your research and find the special extras unique to each facility, says Waters. “Some extras, such as medication management, are included in the monthly maintenance and some facilities bill separately for them.”

In Waters’s mother’s case, the family felt fortunate—a good friend’s mother lived at the same facility. “That was part of why I wanted my mother going there—she would know somebody,” says Waters.

“Many clients wish they could bring their parent into their home, but that’s rarely feasible,” says Waters. “So, we are fortunate that these long-term care facilities are available, and, overall, they do a good job providing care and entertainment for people who are very vulnerable.”

Many local and national caregiver support groups and community services are available to help you navigate the process of finding long-term care for yourself or for loved ones. If you don’t know where to find help, contact your state’s department of eldercare services. Or call 800.677.1116 to reach the Eldercare Locator, an information and referral service sponsored by the federal government that can direct you to resources available nationally or in your area.

Housing Options for Aging Individuals

As people grow older, their housing needs may change. Perhaps you or someone you love will need to live in a nursing home or an assisted living facility. Or, after considering the options, you or your loved one may decide to stay at home. When the time comes to evaluate a housing situation for an older adult, you’ll have numerous options available to you. Here is a high-level breakdown of what to consider, types of care provided, and some pros and cons.

When to Consider

Types of Care Provided

Potential Advantages

Potential Disadvantages

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In-Home Care

Assisted Living Facility

Nursing Home

Can live independently but needs some assistance

Can live independently but needs some assistance

Cannot live independently and requires regular nursing care

• • • •

Rental rooms or apartments Housekeeping services Meals, social activities, and transportation Limited healthcare services

Can remain in familiar surroundings May be less expensive than assisted living or nursing home care if limited services are needed

• • •

Staff available 24/7 Social interaction with other residents Home-like atmosphere

Strangers in home Can be difficult to coordinate care

• • •

Limited privacy Long waiting lists High fees for extra services

• • • •

Medical care (nursing or health aide) Household help Companion or caretaker services Meal delivery and transportation

• •

• •

• • •

24/7 access to medical care Help eating, bathing, dressing, or taking medications Skilled nursing care

• • •

Social interaction with other residents Access to 24/7 medical care Special care units for individuals with Alzheimer’s disease or related conditions

• • •

Limited privacy Long waiting lists Very expensive

CONVENTIONAL WISDOM

by Sam Kirby

Each spring, a rite of passage occurs in stadiums, auditoriums, and Zoom calls across the nation: The latest graduates cross the stage to begin a new phase of financial independence. As has always been the case for graduates, the class of 2021 will face an array of financial choices for the first time—simple decisions on saving and spending that may seem small in the moment but have financial repercussions that can extend far into the future.

Today’s graduates also face a very different environment from their older siblings, cousins, parents, and grandparents. Instead of the anxious yet still carefree final months on campus, many students endured a more solitary experience from their dorm rooms or apartments—or their parents’ basements. They will also enter a job market that is far from normal. The pandemic has altered the landscape for how and where work is done, and it’s unclear how many of these changes will persist once the crisis has passed.

Even so, there will be no shortage of financial wisdom showered upon new grads from commencement speakers, proud parents,

well-wishing relatives, and friends on social media. The advice they receive will likely include financial rules of thumb that have, in many cases, been passed down through generations, like a battered, leather-bound portfolio or briefcase.

Rules of thumb are simple frameworks to help us make complex decisions based on limited information and imperfect knowledge of the future. Some, like the widely used rule of 72, are rooted in math, while others are driven by behaviors. Either way, their value is that they don’t have to provide perfect predictions to be useful. Instead, they serve to nudge us toward more successful behaviors and 27

provide simple frameworks to consider the long-term consequences of everyday decisions.

Even if the current environment is very different from the past, there is always value in learning from people who have survived and thrived amid any number of challenges, shocks, and prior tectonic shifts in how we live and work. Many of the financial tips offered to graduates 50 years ago remain just as true today—while others have likely changed.

Budget What hasn’t changed. The most fundamental driver of lifelong financial success is the ability to set and keep to a budget. You can only save or invest what you don’t spend, and this simple truth forms the basis for perhaps the most famous financial axiom of all time: Pay yourself first.

so-called gig economy. And all else being equal, gig workers probably need an even larger emergency fund for two reasons: to smooth out the more variable nature of their income and to protect against events (illness or even a flat tire) that prevent work. And as many experienced during the pandemic, unemployment benefits for gig workers are also less clear.

Workers in more traditional jobs may also need to adjust the six-month target to the current environment. A contemporary and clever twist on the six-month rule is to take the current unemployment rate (in percentage points) and keep that number of months’ expenses in reserve, at a minimum. But with a recent unemployment rate of 6.1 percent, this takes us right back to where we started: a six-month target. Things may not be so different, after all.

Debt and Credit

This phrase, coined in a 1926 book on personal finance, titled The Richest Man in Babylon, has certainly stood the test of time and has been expanded over the years with additional parameters. The 80/20 rule, for example, suggests spending 80 percent of take-home pay on needs and wants, with the remaining 20 percent aimed toward savings or debt reduction. This provides a useful, simple framework for the budget-savvy.

What hasn’t changed. As with budgeting, the most basic advice with respect to debt management is both simple and timeless: Live within your means. Whether drawn from a philosophical basis—such as the belief that money doesn’t buy happiness—or from the practical recognition that debt reduces flexibility and limits future choices, debt management is a key to financial wellness.

But after the initial shock subsides—Wait, you want me to reduce my paycheck by 20 percent?—the natural next question is what to do with that money. There is no shortage of competing and worthwhile priorities, including paying down college debt, saving for retirement, or building toward a down payment on a home. But the experienced advice-giver will have a ready answer: The rainy day fund. Conventional wisdom calls for three to six months of living expenses kept safe in a savings or money market account that may be just a little inconvenient to access, thereby reducing the temptation to raid the piggy bank.

In addition to the stress that accompanies a high level of debt, debt carries tangible costs. Establishing a solid credit history and high credit scores can lead to far more attractive loan terms. For example, the difference in annual percentage rates (APR) for 30-year fixed-rate mortgage loans recently reported for borrowers with the highest (760 to 850) and lowest (620 to 639) Fair Issac Corporation (FICO) scores was 1.59 percent.1 For a $300,000 mortgage loan, this equates to a mortgage payment that is more than 20 percent (or $265) higher each month and total interest costs more than $95,000 greater over the life of the loan for those with the lowest credit scores.

This is sound advice indeed, and what’s great about the second tip is that it requires knowledge of the first. After all, you can’t plan for six months of living expenses until you actually know what those expenses are.

What may have changed. Fortunately, today there are many tools, apps, and services to simplify and automate the process of creating a budget. Instead of legal pads or spreadsheets, a smartphone app will scan accounts to track and categorize spending. Other apps will round purchase amounts up, turning spare change into gradual progress toward the rainy day fund. But as for the size of that fund, today’s environment may call for a more customized approach to the standard six-month target.

Even before the pandemic, there was already a shift underway toward more flexible, independent work arrangements—the

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Credit decisions can also influence career paths, both directly and indirectly. Increasingly, employers include credit checks as part of their preemployment background checks. Just as importantly, keeping debt levels under control can mean the difference between being forced to remain in an adequately paid but miserable job or one with limited potential for future growth versus having the flexibility to pursue opportunities that sometimes require a nonlinear path toward a more rewarding career.

What may have changed. For today’s graduates, there are two important factors that are different from those of prior generations: the prevalence of student loans and the historically low interest rate environment. Over the past decade, the amount of student loan debt outstanding has nearly doubled to $1.7 trillion—an amount far above both credit card and auto loan

Figure One: Average Consumer Interest Rates (1995 to 2021)

Source: Federal Reserve Bank of St. Louis (FRED)

balances.2 A recent survey by the National Association of REALTORS® reported that nearly half of all homebuyers ages 22 to 30 years of age reported that student loans had delayed their purchase decisions.3 Another difference is the current interest rate environment. Over the past three decades, the overall level of interest rates (as measured by the benchmark 10-year U.S. Treasury yield) has steadily declined. As shown in Figure One, rates for consumer borrowers have generally followed suit, aside from credit cards, which have retained their steep premiums.

In the short term, low rates represent a boon to those early in their careers, as they reduce the monthly maintenance cost of debt. And unlike savers later in their careers, the opportunity cost of low interest rates on savings or money market balances is typically low.

The risk is that low debt service costs lead to overextension, particularly if borrowers make decisions on how much of their car, house, or even graduate school degree they can afford based solely on the current, historically low monthly payment. Although we don’t know what interest rates will look like a decade from now, they’re unlikely to be significantly lower.

Homeownership What hasn’t changed. When we think of debt, the natural next topic is homeownership and the classic bit of financial advice that

forms the very cornerstone of the American dream: Save 20 percent toward a down payment and buy your first house as soon as you can.

The fundamental financial case for homeownership has not changed.

Owners build equity in an asset that they can use, enjoy, and improve with sweat equity, in addition to the potential tax benefits. Although real estate prices are notoriously local in nature, since 1987, the average annual increase in the Case-Shiller U.S. National Home Price Index has been greater than 4 percent with lower volatility than many other types of assets.4 This is in addition to the less-tangible, nonfinancial benefits such as a greater ability to personalize a home to the owner’s needs, the notion of putting down roots, establishing a stable home base for raising a family, and enjoying a greater sense of community.

What may have changed. Even with mortgage rates at historically low levels, soaring home prices have pushed home affordability out of reach for many potential buyers. Not surprisingly, the median age of first-time homebuyers has increased to 33, which is four years older than it was in 1987.5 One contributor to this delay may be that people are forming households later in life than previous generations. Dual incomes can be important for many first-time buyers, and one recent study reported that more than 70 percent of homebuyers were either married or unmarried couples.6 But, as shown in Figure Two below, the median age at marriage has increased dramatically over the past

29

three decades, reaching more than 30 for men and 28 for women in 2020, an increase of more than four years since 1990.

Holding aside these financial aspects, the current reality is that homeownership may not be right for everyone.

Today’s workers are far more mobile than they were in prior generations. A 2019 Department of Labor study reported that workers held 5.7 jobs on average from ages 18 to 24 and an additional 4.5 jobs from 25 to 34.

However, it is important to note that this study only included individuals born between 1957 and 1964 and therefore may underrepresent the degree of mobility in today’s younger workforce. And the 2020 pandemic may have only accelerated this trend. Another recent survey conducted by Harris Poll exclusively for Fast Company showed that the majority (52 Figure Two: Estimated Median Age at First Marriage percent) of U.S. workers are considering a job change in 2021, and as many as 44 percent have plans to do so.

Considering the up-front costs of buying a home, another common rule of thumb is that buyers should plan to remain in their homes for at least five to seven years just to break even. Unless the home’s location could support four to six job changes, on average, during that period, renting could be more attractive than buying.

Even so, delayed homeownership doesn’t eliminate the need to save for the eventuality of buying a home, and the key is to begin to accumulate equity elsewhere. Home prices (and, Sources: U.S. Census Bureau, Annual Social and Economic Supplements, 1947-2020 therefore, down payments) are likely to increase Estimates include same-sex marriages after 2019. over time, and without accumulating liquid savings that can grow at a similar rate, a purchase five or ten years hence becomes that much more difficult.

Investing for Retirement What hasn’t changed. Saving and investing for retirement have long been fertile grounds for financial wisdom. And for good reason. For those in their early 20s, retirement is maybe 40 or 50 years away. With such a long period before the payoff is realized, it’s even more difficult to make sacrifices today.

The gold standard retirement savings rule of thumb is to save 15 percent of pre-tax income, including any employer contributions. For those who are able, this sets an excellent trajectory that can dramatically increase the likelihood of retirement success. But with the competing priorities already discussed—student loans, credit card payments, and building a rainy day fund—it can be difficult for many new graduates to hit this target right out of the gate. But all is not lost. Experienced advice-givers have a few more go-to tidbits to pass along:

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•

Maximize the match. Even if you can’t hit the 15 percent target, do everything you can to maximize your employer’s contributions, even if this means slowing down your progress toward other savings or debt reduction goals.

•

Set yourself on autopilot. Many 401(k) and 403(b) plans offer automatic escalation features that increase paycheck deferrals by, for example, 1 percent each year—a level hardly noticeable for most people.

•

Check progress regularly. Even if your goal is still several decades away, set milestones and checkpoints to measure and celebrate success. This can take the form of retirement planning sessions with a Summer | 2021

•

Look, but don’t touch. Given the job-switching behaviors already discussed, younger workers will face the temptation to take a distribution instead of a rollover when leaving a job. Such premature distributions are a common mistake that should be avoided whenever possible. What seems like a small sum of money can have massive implications on long-term success, particularly after early withdrawal penalties.

Figure Three: Retirement Balance Benchmarks as a Multiple of Income

Multiple of Income

qualified retirement plan advisor.

If this kind of service isn’t available, even simple measuring guidelines can make progress feel much more tangible and attainable. Figure Three shows one such benchmark based on target retirement balances by age.

Source: Fidelity Investments

What may have changed. Given workforce trends already discussed, one piece of advice many of us may have once received is becoming less and less applicable: Find a good company, build your career there, and retire with a comfortable pension. Today, it’s estimated that only 15 percent of private-sector workers have access to a traditional pension plan, according to U.S. Bureau of Labor Statistics.

Another common, but outdated, rule of thumb for retirement investing is the rule of 100—investors should subtract their age from 100 to set the percentage of their portfolio to hold in stocks.

Over the past two decades, the industry has invested massive resources in studying the best approach to asset allocation over a retirement saver’s career. The rule of 100 may leave retirement savers underexposed to equities both at the beginning of their career and toward the end, when their accumulated balance must support several decades of spending.

A more modern approach is, once again, to take advantage of automation. Many retirement plans today offer age-based target date funds or other solutions that offer diversified portfolios with set-it-and-forget-it convenience. In addition to eliminating the need for manual adjustments, these solutions may also reduce investors’ temptations to make changes in response to short-term bouts of volatility.

Finally, most retirement plans today offer a Roth option—the ability to save after-tax dollars today and receive qualified distributions tax-free in retirement. Although everyone’s tax situation (and view around future taxes) is different, a simple rule of thumb is that if your current tax rate is lower than you expect in retirement, you should direct at least some retirement savings toward Roth. If

nothing else, the ability to choose between taxable and nontaxable buckets can be a powerful planning tool.

Those in the position to offer financial advice to those just setting out can make a huge impact—assuming, of course, that the advice is heard, understood, and relevant to the current environment.

Ambitious young readers of Fortune magazine’s 1956 article, “Twenty Minutes to a Career … Or Not,” were advised to consider the standard 20-minute job interview as an event that would settle their careers for life and that they should consider a job offer in terms of a lifetime career. Simply considering the number of bankruptcies, corporate mergers, and acquisitions since then, it is unlikely that many of the class of ’56 retired from their first jobs.

The best advice is always good advice that is actually followed. And more often than not, it’s the stories of our own struggles and mistakes that have the greatest impact. No matter our level of success, there are always things that we would have done a little differently—and these are likely the most impactful lessons to pass along to the next generation.

1 Fair Isaac Corporation, Home Purchase Center, May 17, 2021 2 Student Loans Owned and Securitized, Outstanding, retrieved from FRED, Federal Reserve Bank of St. Louis 3 National Association of REALTORS®, 2021 NAR Home Buyer and Seller Generational Trends 4 S&P/Case-Shiller U.S. National Home Price Index, retrieved from FRED, Federal Reserve Bank of St. Louis.

5 Pickert, Reade, “Young Homebuyers Are Vanishing from the U.S.,” Bloomberg, 2019 6 2021 Home Buyers and Sellers Generational Trends Report, National Association of REALTORS® Research Group, 2021

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MARKET REWIND

STOCKS CONTINUE THEIR RALLY Buoyed by accommodative fiscal and monetary policy, vaccine-driven optimism, and expectations for a global economic rebound, U.S. and international stocks and commodities continued their torrid pace through May. Rising inflation fears and interest rates have recently crept into the dialogue, hampering bonds and inducing several bouts of short-term market volatility.

• U.S. stocks have posted double-digit gains so far in 2021 thanks to tailwinds provided by strong corporate earnings and the reopening domestic economy. Economically sensitive small-cap stocks have performed especially well.

• International developed market stocks have also notched solid returns, although they lag their U.S. counterparts due largely to slower vaccine rollouts and delayed reopenings. The gap has narrowed recently with accelerating vaccinations in Europe.

• Bonds have posted a small loss for the year so far as interest rates rose from historically low levels on inflation concerns.

The benchmark 10-year U.S. Treasury’s yield has risen from 0.91 percent at the end of December to 1.59 percent at the end of May. • Commodities remain the standout performer through May, largely driven by rising demand for oil. Gold has also gained recently due to its use as an inflation hedge.

MARKET INDEX PERFORMANCE (as of 5.31.2021)

U.S. Bonds

International Stocks

U.S. Stocks

Small-Cap Stocks

Commodities 18.9%

15.3% 12.6% 10.8%

3.7% 0.3%

2.7% 0.7%

0.2%

-2.3% Q1 2021

YTD 2021

LOOKING FORWARD Congress is debating another round of fiscal stimulus focused on infrastructure. Tax increases are likely to follow. Meanwhile, investors are closely watching inflation numbers to determine if the recent uptick is temporary in nature or likely to be longer-lasting. Longer-lasting inflation could prompt the Federal Reserve to rethink its policy approach and require investors to recalibrate their expectations, which could generate market turbulence.

While the pace of economic improvement in 2021 will vary by country due to different rates of vaccine deployment, we expect Europe and other developed markets to catch up by year end, further fueling the global recovery. We are tracking these and other developments that could either be catalysts for upside or the cause of short-term volatility. After the sharp rally over the past year, stock market valuations are elevated, and returns could be more modest in the coming quarters.

Asset class returns are represented by the following indexes: S&P 500 Index (U.S. stocks), MSCI All-Country World ex-U.S. Index (international stocks), Bloomberg Barclays U.S. Aggregate Bond Index (U.S. bonds), Russell 2000 Index (small-cap stocks), and Bloomberg Commodity Index (commodities).

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Summer | 2021

by John Curry

Have you ever felt as if life is passing you by? As if your friends and family members are doing things that make you wish you were in their shoes? Do you struggle at work because you see colleagues working on projects that seem more interesting than what you’re doing? Lately, you may be feeling as if you need to jump into a hot new investment. After all, everyone else is doing it, right?

If any of these scenarios seem familiar, you may be suffering from the malady known as FOMO—or fear of missing out. FOMO is a fear of regret, the fear that deciding not to do something is the wrong choice.

It manifests itself in various ways, from a brief pang of envy to lingering self-doubt or increasing feelings of inadequacy, and it urges us toward short-term gain rather than long-term benefit.

To date, much of the research that explores the psychology of FOMO focuses on feelings of stress, anxiety, and negativity among young people. But the phenomenon is much more pervasive. It can affect people of all ages and domains of life beyond the social. In fact, 70 percent of adults in developed countries experience FOMO to some degree. We can’t stand missing out.

Among other things, FOMO urges you to splurge on a trendy new toy of some kind because everyone else is getting one. And it is at work when you decide to chase a risky investment because it might be the next big thing.

Me and Mrs. Jones It’s interesting that FOMO could have snuck up on us like this. The word was only added to the Merriam-Webster dictionary in the same 33

year as athleisure and bitcoin. FOMO is, of course, nothing new. As humans, we’re programmed to conform to society’s norms, and we feel insecure or disappointed if we’ve missed out on an opportunity that others have taken advantage of.

Before the smartphone era, “keeping up with the Joneses” pushed many Americans to mimic their neighbors’ lifestyles and standards of living through conspicuous consumption—driving the right car, wearing the right brands, attending the right schools, and joining the right clubs. But social media and real-time access to almost everything have turbocharged the concept.

Before the smartphone era, “keeping up with the Joneses” pushed many Americans to mimic their neighbors’ lifestyles and standards of living through conspicuous consumption—driving the right car, wearing the right brands, attending the right schools, and joining the right clubs.

Marketing strategist Dr. Dan Herman identified FOMO in 1996 and published the first academic paper on the topic in 2000. Herman observed the phenomenon during focus groups and interviews. He uncovered a common theme of interviewees’ fearful attitudes about the possibility of missing an opportunity—and the joy that would come from seizing it. Marketers have since weaponized Herman’s work with tactics such as limited-time free-shipping offers, early purchaser discounts, and celebrity and influencer testimonials.

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Moderation in All Things But FOMO is not all downsides. According to Herman, this phenomenon can lead us to “richer lives, filled with interest, excitement, and pleasures” and “motivate us to develop ourselves to the fullest extent and to reach achievements that reward us with feelings of satisfaction, might, and worth.”

Sounds a little like Don Draper, doesn’t it?

The fear embedded in FOMO urges us toward behaviors that make us more attractive and interesting to others, Herman says, so long as we learn to cope with it. He also found that the ability to cope well with that fear correlates with financial and social success and life satisfaction. So, while missing out is inevitable, the fear of missing out can be a good thing—in moderation.

Without moderation, FOMO can generate negative consequences. Sufferers can become anxious, overwhelmed, and unable to make rational decisions. They may shy away from commitments to career, a partner, or friends because they don’t want to close the door on other possibilities. FOMO can become a self-fulfilling prophecy for people who make short-term-focused decisions to quell their anxieties.

Beyond the emotional aspects, FOMO can encourage decisions with negative long-term financial consequences. These decisions may be small, like caving in and buying the latest 5G iPhone, or large, like trading in for a new car every few years so that you can have the latest and greatest features. What about buying the more expensive house—so you’ll have the extra space in case you need it? And, after all, it would be a shame to miss out on mortgage rates this low.

Trying to maintain status is a slippery slope, and this kind of lifestyle creep can erode finances over time.

The realm of investments is fraught with FOMO opportunities too, and with the stock market at all-time highs, you’re hearing about them every day—in the financial news, from

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$

friends, and maybe even from financial professionals.

Technology stocks, special-purpose acquisition companies (SPACs), initial public offerings (IPOs), meme stocks, and cryptocurrencies are making headlines with their eye-popping returns and are causing many investors to make short-term, risky, FOMO-induced decisions.

While somebody is certainly making money from these manias, too often, most end up with losses.

Free Your Mind So how can you protect yourself from FOMO—or, at least, moderate its influence on your life and big financial decisions?

As is often the case when fighting behavioral biases, the first step in preempting the effects of FOMO is realizing exactly what is going on—noticing, perhaps, that you are not altogether in control of your thinking.

In fact, you may not be thinking at all.

This is because the brain’s first response to fear is generated by the amygdala, a small, almond-shaped structure deep in the brain.

The amygdala is a primal part of our brain that generates a stress reaction in the body when it perceives a threat to your survival.

The threat could be a lion pouncing or something more subtle— for example, when you feel like you’re not part of the group or that you’re not in possession of critical information. In other words, fearing you’re missing out.

Psychologists suggest a range of tactics— from practicing meditation and accepting yourself as you are to expressing gratitude and focusing on the important relationships in your life—as powerful antidotes to FOMO.

Stressed and fearful is not a good mindset for making sound decisions, but fear not (pun intended). It’s easy to engage other parts of your brain that can be more helpful.

Simply call a timeout and ask yourself: Is this decision necessary for my long-term well-being—or is it a short-term reaction driven by anxiety and fear that a great opportunity is slipping away?

The question alone will activate parts of your brain responsible for rational thinking, most notably your pre-frontal cortex. If the decision you’re trying to make is a big financial decision, you’ll want to speak with your financial and tax advisors. From there, you can use a range of strategies to guide your decision. Talk to a trusted friend or family member, or follow in the footsteps of Ben Franklin.

Franklin’s decision-making method, described in his Autobiography, published in 1791, involves capturing the pros and cons of prospective decisions in a T-chart and scoring them by applying weights to the factors. His approach slows you down because, as he said in a letter to a friend, “all the Reasons pro and con are not present to the Mind at the same time.”

Psychologists suggest a range of tactics—from practicing meditation and accepting yourself as you are to expressing gratitude and focusing on the important relationships in your life—as powerful antidotes to FOMO. Despite its new-kid-on-the-block status, it appears that FOMO is here to stay, fueled by social media, the Internet, real-time access to all kinds of news and information, and the general immediacy of life in the 21st century. In fact, it probably only gets worse from here—unless we take steps to rein it in.

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LASTING LEGACY

Life on the

WIRE

by Jeanne Lee

Nik Wallenda wants your toes to curl and your heart to pound in terror, but he doesn’t want you to look away—he’s got an amazing show for you. A seventh-generation aerialist and son of the famed Flying Wallendas circus troupe, he has spent his life treating audiences to truly heart-in-mouth spectacles, in person and through live television.

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Summer | 2021

He has stretched the limits of the sport of high-wire walking, crossing 1,500 feet above a Grand Canyon gorge on a dangerously swaying cable with no harness or net. He was the first to cross directly above Niagara Falls through swirling wind and mist so heavy that he was at times blinded. And in March 2020, he topped all that by walking through corrosive fumes across the crater of an active volcano in Nicaragua, above a magma lake at more than 2,000 degrees. And he can’t wait to do more.

“Before I got to the other side of the volcano, I was already thinking of 15 other events I could do,” Wallenda, 42, says.

Growing Up Wallenda Wallenda was just 18 months old when his mother first put him on a tightrope in the backyard. This was normal parenting practice in the family, as his sister, cousin, and other relatives also trained from an extremely young age. His mother, Delilah, even walked the wire while pregnant with him, so you could certainly say he was born into the lifestyle.

A favorite saying of his great-grandfather, the legendary circus performer Karl Wallenda, is Wallenda’s truth: “Life is on the wire, and everything else is just waiting.”

The family traces their acrobatic history back over 200 years to Germany. They moved to the U.S. in the 1930s after John Ringling saw their act in Havana and hired them for his “Greatest Show on Earth,” according to The New York Times. Wallenda holds multiple Guinness World Records, including the steepest tightrope walk, highest blindfolded walk, highest wire crossing on a bicycle, and tallest four-person pyramid on a high wire.

His wife, Erendira, is also from a long circus lineage. “She comes from seven generations in the business on one side, and eight on the other,” Wallenda says. According to the Washington Post, he called her a “ballerina in the air” after she hung by her teeth from a helicopter over Niagara Falls, breaking Wallenda’s iron-jaw world record.

Contrary to what some might think, his family didn’t pressure him to carry on the tradition. “My parents saw the struggles of the entertainment and circus world and did everything they could to push me out of the industry,” Wallenda says. “When you’re in front of a live audience from the age of two—that’s when I started performing, not on the wire but as a clown—there’s that attraction,” he says. “I was passionate about it.”

His three adult children have careers in the military and health care. “They all are really good at walking the wire, but we never let them do it in front of an audience. It was to protect them from that itch, that bug, and let them make their own decisions when they got older,” Wallenda says.

There’s a video of Wallenda walking between two skyscrapers in Chicago for a 2014 TV special. In the wide shots, the silhouette of his body looks like a bird flying through the air, the balance pole extending like wings on either side. The cable slopes up at 19 degrees, the steepest ever recorded by Guinness World Records.

As he ascended, he spoke into a mic. “What an incredibly beautiful city at night Chicago is,” he said, as casually as if he weren’t teetering on a cable the diameter of a penny. “God is in control,” he added. At the top, he took an elevator to the ground, went back to the tower, and put on a blindfold to walk another tightrope. Another Guinness World Record.

Small wonder the media has dubbed him the King of the High Wire.

Wallenda, like others in his family, typically eschews a harness or safety net whenever local ordinances and his contracts permit. Life on the wire is normal to the Wallendas, but the family has endured tragedies over the decades.

The patriarch, Karl, lost his life in a fall from a tightrope on a beachfront in San Juan, Puerto Rico, in 1978. Wallenda speaks openly about the accidents. “Seven [family members] fell in 1962,” Wallenda says. “In 2017, we fell doing an eight-person pyramid, and there were serious injuries.”

Wallenda and his sister, Lijana, were rehearsing the intricate formation in Sarasota, Florida, when their moving pyramid suddenly collapsed. Wallenda and two performers managed to catch the line, but the others hit the ground. Lijana landed face-first and nearly died, with surgeons requiring more than 70 screws and plates to repair her broken bones. Badly shaken, Wallenda nevertheless found substitute performers, did a modified show, and locked away his trauma to fulfill the contract. He wrote about the emotional aftermath in his book, Facing Fear: Step Out in Faith and Rise Above What’s Holding You Back.

Calculated Risk The fall affected him mentally, for a bit. Accidents are always going to happen, Wallenda says. “My risks seem more intense because I’m walking on a wire, but it’s a very calculated risk,” he says. “Do I

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arrogantly say that I’ll never fall? No. It’s risky and dangerous—and it could take my life at some point, but I train as hard as I can so that that doesn’t happen.”

“I absolutely trip. In training, it happens often,” Wallenda says.

“Sometimes, on the ground, you trip,” he says. “However, if I trip up there, it could cost me my life. But for me, walking on the wire is the same as walking on the ground.”

In his early 40s, Wallenda says wire walking hasn’t gotten physically more difficult over time. Wallenda family members tend to age with extreme grace, often continuing on the high wire into their 70s or 80s.

“It’s our passion,” Wallenda says. “Tell Tiger Woods to stop golfing or Michael Jordan to stop playing basketball—it’s not going to happen.”

He shares the story of his mother having a hip replacement in her 60s.

“She had to convince her surgeon to put in an athletic hip instead of a regular one for average people,” Wallenda says. “My mom said, ‘No, I’m an athlete. I need the titanium hip.’” Six months afterward, he and Delilah—and her new hip—walked together on a tightrope 100 feet in the air for a show in Tampa.

As he gets older, Wallenda notices the difference more on the mental side of things. “You think a little more before you do things,” he says.

“In my book, Facing Fear, I wrote about the psyche and the internal dialogue that we all deal with as we get older,” Wallenda says.

“Fear can hold us back from success, from who we’re created to be,” Wallenda says, “but it’s a stepping-stone.”

“Failure creates fear … without failure, you can’t get to success,” he says.

Wallenda draws a comparison to an investor’s fear of losses and how that can hold them back from stock market success. He recalls his first meeting with a financial advisor. “My advisor did a risk analysis.

It’s to see how risk averse you are and how much risk you want to take in the stock market.” After Wallenda completed the questions, the advisor was astonished, saying, “Wow. Never in my career have I seen someone who wants to take that much risk with their money.”

All In With finances, with life, and with performances, that’s how I am, Wallenda says. “I’m all in. If I get knocked down, I’ll invest again until I win,” He says his career has afforded him the opportunity to retire comfortably, but he can’t imagine doing so.

“I’ve been extremely blessed, more than I ever dreamed,” he says.

“I could retire now at 42, but my wife says I’m addicted to work.”

Beyond wire walking, he and Erendira keep busy with different activities, like any normal family. “I do house remodeling. We buy and flip houses,” Wallenda says. “But when I’m doing that, I can’t wait till the next big walk.”

Facing Fear: Step Out in Faith and Rise Above What’s Holding You Back The Flying Wallenda family has been tempting fate for generations, and fate hasn’t always been kind. Despite fatal high-wire accidents that killed, paralyzed, and seriously injured members of the family in 1962, 1978, and, most recently, in 2017, the rope-walking Wallendas refuse to let tragedy hold them back.

In the memoir, Facing Fear: Step Out in Faith and Rise Above What’s Holding You Back, fans can learn more about Nik Wallenda’s personal journey back to the high wire after the family’s 2017 tragic accident during which five circus performers tumbled about 25 feet.

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Summer | 2021

CLIENT CONVERSATIONS

READER Q & A In this installment of Client Conversations, VESTED confronts the debate surrounding the digital phenomenon known as Bitcoin—what it is, what it isn’t, and what U.S. Treasury Secretary Janet Yellen is saying about it.

?

The following pages will also inform on the mechanics of a family limited partnership—a way to gradually gift your business to your children that also packs a punch with personal and tax benefits.

Bitcoin has received a lot of attention lately from the financial media and investors. What is it, and what are some of the risks?

A

Many of our readers have noticed the fierce debate over Bitcoin recently. Is it an investment, digital gold, a scam, a network of computers, or even the future of currency? If you’re wondering what all the fuss is about, here is a brief introduction explaining what Bitcoin is and what it isn’t and detailing some of this emerging asset’s unique characteristics.

Bitcoin is a digital asset (sometimes called a cryptocurrency) supported by a peer-to-peer Internet-based ledger system. It was launched in 2009 by an individual or group known by the pseudonym Satoshi Nakamoto. Unlike printed currency or minted coins, Bitcoin is not created or maintained by a government. Whereas Bitcoin has been talked about as a currency—to be used for buying and selling goods and services—today, it is thought of increasingly as an investment.

It is not a security. Bitcoin is an asset—like a direct investment in real estate, such as a home, or an investment in physical gold bars. Bitcoin is not an investment like a mutual fund or exchange-traded fund (ETF), both of which are regulated securities.

It is volatile. Over bitcoin’s history, its value has fluctuated wildly, with peak-to-trough drawdowns of greater than 50 percent in a single day. As speculation and confidence in bitcoin has ebbed and surged, this volatility has led to problems for people trying to make payments At the beginning of 2017, one in bitcoins. At the beginning of 2017, one bitcoin was worth about $1,000. In bitcoin was worth about $1,000.

March 2021, the price topped $60,000 for the first time. In between, bitcoin investors have been tested, over and over, by gut-wrenching price declines.

In March 2021, the price topped It is difficult to manage. The decentralized nature of the Bitcoin system makes it more challenging to follow the flow of money and for governmental regulators to get a handle on it. Major bitcoin exchanges located around the world have been subject to trade disruptions and the potential for increased regulatory scrutiny. Also, unlike credit card charges, transactions are irreversible.

$60,000 for the first time. In between, bitcoin investors have been tested, over and over, by gut-wrenching price declines.

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It is not insured. While securities accounts at U.S. brokerage firms are insured by the Securities Investor Protection Corporation (SIPC), and bank accounts at U.S. banks are insured by the Federal Deposit Insurance Corporation (FDIC), bitcoins held in a digital wallet or exchange do not have similar protections.

It is vulnerable to security threats. Fraud, technical glitches, hackers, cyberattacks, or malware could cause bitcoin exchanges to stop operating or permanently shut down. Login information needed to access exchanges can be forgotten, lost, or stolen by hackers or phishers.

Once access is denied, it cannot be restored, resulting in the loss of one’s bitcoin account.

It may limit your recovery in the event of fraud or theft. If fraud or theft results in you losing bitcoins, you may have limited recovery options. Third-party wallet services, payment processors, and bitcoin exchanges that play important roles in the use of bitcoins may be unregulated or using developing technologies vulnerable to hacking.

U.S. Treasury Secretary Janet Yellen has called Bitcoin “an extremely inefficient way of conducting transactions.” But she also said it makes sense for central banks to consider a digital dollar, which could lead to faster, safer, and cheaper payments—a statement that could open the door to regulations from the Federal Reserve, Treasury, or the U.S. Securities and Exchange Commission (SEC) in the coming years.

The question of whether Bitcoin has a place in your portfolio is not an easy one to answer. At this time, Bitcoin is speculative, but it may become more desirable in the future and may provide a means of portfolio diversification. Overall, the universe of Bitcoin as an investment vehicle is small but could expand as consumers, Wall Street, and technology firms build momentum toward mainstream acceptance.

If you’re considering investing in Bitcoin, be prepared to potentially lose much—if not all—of your investment. Proceed with caution, educate yourself, know the risks involved, and work with your financial and tax advisors to determine whether Bitcoin makes sense for your portfolio. Depending on how comfortable you are with volatility, it may be wiser to stay on the sidelines than to be on the field.

My husband and I want to start transferring ownership of our family business to our children. We’ve heard about family limited partnerships. What are they, and how do they work?

A

A family limited partnership (FLP) is an agreement between family members involved in a trade or business. It divides rights to income, appreciation, and control and can hold investments, real estate, cash, or other business assets. An FLP can be a good solution to help transfer ownership of the family business to the next generation during your lifetime—all while allowing you to retain control of the business.

FLPs have two types of partners. General partners usually own the largest share of the business and oversee operations. They can gift as much as 99 percent of the limited partnership interests to the younger generation. Limited partners have no management responsibilities, and they are not liable for the debts of the FLP beyond their contributed capital. Limited partners, instead, buy shares of the business in exchange for dividends, interest, and profits the FLP generates. A powerful advantage of an FLP is that it can help cut federal gift and estate taxes.

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Summer | 2021

Leverage the annual gift tax exclusion and gift and estate tax applicable exclusion amount. Gifts of interests in an FLP are subject to federal (and state) gift tax. However, you can minimize your federal gift tax liability by taking advantage of the annual gift tax exclusion.

Through 2021, gifts of limited partnership interest up to $15,000, per recipient, are free from gift tax. Further, every taxpayer has a federal gift and estate tax applicable exclusion amount equal to the basic exclusion amount of $11,700,000 in 2021. However, it is important to note that this amount could be reduced to a much lower level under the Biden administration. Transfers that do not fall under the annual gift tax exclusion will be free from gift tax to the extent of your available applicable exclusion amount.

much as 35 percent. Discounts applied may include the minority interest discount and the lack of marketability discount.

Remove future appreciation from your estate.

Business assets generally increase in value over time. Distributing your assets among family members through the FLP freezes the current value of your estate and keeps any future growth in value out of it later. You may have to pay gift tax now, but it will be less than the tax calculated on a higher future value.

Take valuation discounts. By discounting the value of limited partnership interests, more FLP interests can be gifted tax free to the next generation, which results in more assets passing out of an individual’s taxable estate.

An FLP is a passthrough entity for income tax purposes. The Internal Revenue Service (IRS) does not recognize an FLP as a taxpayer, and income of the FLP passes through to the partners. So, you can shift business income and future appreciation of the business assets to other members of your family in a lower tax bracket. Through 2025, subject to various limits, an individual taxpayer can deduct 20 percent of domestic qualified business income (not counting compensation) from the FLP.

Limited partners have very restricted rights, such as the inability to transfer an interest, withdraw from the FLP, and take part in management. These restrictions can result in a business value significantly less than the value of the underlying assets, and the valuation discounts can be considerable, totaling as

Keep in mind, FLPs are subject to more restrictive rules than other forms of business entity to be valid in the eyes of states and the IRS. To determine whether an FLP is the right vehicle for your estate planning needs, consult with a qualified lawyer and tax accountant with experience in structuring FLPs.

If you have a question for the VESTED team, we’d love to hear from you and see if we can help. Please send your questions to us at VESTEDmagazine@captrust.com.

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CAPTRUST HAPPENINGS

GIVING BACK This spring, the CAPTRUST Community Foundation (CCF) announced its annual Charity of Choice and National and Small Grant recipients and broke a fundraising record with the help of the Dallas Magnolias.

Charity of Choice and National Grants Each year, the CCF selects a Charity of Choice and five organizations to receive gifts from its National Grant program. The chosen 501(c)(3) organizations’ core missions must align with the CCF’s mission to enrich the lives of children in communities we serve. The CCF collects applications from charitable organizations throughout the country, and each qualified applicant goes through a strenuous vetting process.

This year, the CCF selected Note in the Pocket, a nonprofit organization empowering impoverished and homeless schoolchildren in Wake County, North Carolina, as its 2021 Charity of Choice. By clothing children with dignity and love, Note in the Pocket is an ally for young people who would otherwise be limited in their educational and social developments because they do not have appropriate clothes for school.

Additionally, the CCF is pleased to announce this year’s National Grant recipients: Sleep in Heavenly Peace, an organization building and delivering beds to children who don't have beds to sleep in, as well as AMIkids Tampa and Durham Children's Initiative for the valuable services each provides for at-risk youth.

Also among those honored with a National Grant were two nonprofits geared toward helping families, youth, and children experiencing homelessness—Families Together and Rainbow Village.

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Summer | 2021

Earlier this year, CAPTRUST Clarkston teamed up with the United Way and Lighthouse of Oakland County to put together 45 early education learning kits for kids in need.

Small Grants

From January to May, the CCF distributed $282,500 in Small Grants. These included 10 Crisis Grants for organizations in Texas needing relief after February’s winter storm plunged large swaths of the state into freezing temperatures, overwhelming the state’s electricity infrastructure and causing power outages.

Battling Childhood Cancer

This spring, CAPTRUST’s John Pickett worked with the Dallas Magnolias to purchase and distribute more than 1,500 sub sandwiches in support of the 12th annual Jersey Mike’s Day of Giving campaign.

The Help Wipe Out Kids’ Cancer (WOKC) campaign raised a record-breaking $745,250 in donations.

(Left to right) Hoyt Jones, president of Jersey Mike’s; Cindy Brinker Simmons, founder of WOKC; John Pickett, CAPTRUST Dallas; Regina Bruce, founding board member of Dallas Magnolias; Aashik Khakoo, CEO of WOKC; Mary Dowling, advisory board member of WOKC. Photo by Danny Campbell.

CAPTRUST GROWTH Over the past several months, CAPTRUST added a number of new colleagues to its ranks and opened nine regional offices.

Pittsburgh and Greensburg, Pennsylvania Independent wealth management firm PWA Wealth Management became part of CAPTRUST in January. The Pittsburgh-area team is led by Founder and CEO Joe Scarpo, and it brings 15 employees, including seven financial advisors, to CAPTRUST. Founded in 2003, the PWA team manages more than $800 million in assets for individuals, small business owners, and institutional clients.

New York City; Wellesley, Massachusetts; and Lexington, Kentucky CAPTRUST welcomed Cammack Retirement Group, a leading national, independent retirement plan consulting and investment advisory firm, to its ranks in February. Led by Earle Allen, Jeff Levy, Mike Sanders, Mike Volo, and Emily Wrightson, the Cammack Retirement team brings 38 new colleagues, three new locations, and $154 billion in assets under advisement to CAPTRUST.

Sacramento, California Sacramento, California-based Genovese Burford & Brothers Wealth and Retirement Plan Management (GBB) joined CAPTRUST in February.

Founded in 1987 by Mike Genovese and Lon Burford to provide conflict-free financial advice to individuals and retirement plan sponsors, the team oversees $3.13 billion in assets for nearly 1,500 clients. In addition to Genovese and Burford, GBB is led by Alex Brown and Kelly Brothers. The firm brings 36 new colleagues, including 17 financial advisors, to CAPTRUST.

Folsom, California Pacific Investment Consultants (PIC), a Folsom, California-based wealth management practice, joined the firm in April, bringing more than $700 million in client assets under management to CAPTRUST. The team provides wealth management and retirement planning to roughly 600 clients and is led by financial advisors Bill Altavilla, Debbie Hightower, Scott Gordon, Ryan Jantzen, and Christeen Reeg. The PIC team, including four additional team members, joined CAPTRUST.

Peachtree City and Stockbridge, Georgia Stewardship Financial Advisors joined CAPTRUST in June, bringing more than $873 million in client assets under management to the firm. The Georgia-based firm specializes in estate planning, asset and risk management, tax planning, retirement planning, and investment services. Stewardship is led by Charles B. Pyke Jr., and it brings 10 advisors and staff to CAPTRUST. Through the addition of Stewardship, CAPTRUST will also have access to its sister estate planning law firm, Pyke & Associates.

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CAPTRUST GROWTH Miranda Stefan

NEW COLLEAGUES David Amurao David Amurao joined the Phoenix, Arizona, CAPTRUST office in February as a manager, tax, charged with establishing and providing procedures and technology advancements for the firm’s tax department. Amurao was previously a senior tax manager at Andersen Tax. He earned his Bachelor of Science degree from the University of California, Los Angeles.

Larry Elliott CAPTRUST welcomed Larry Elliott to its Atlanta office in May as a manager II, institutional client service. He is responsible for helping retirement plan sponsors manage risk, reduce expenses, and analyze and select investments. Prior to CAPTRUST, Elliott served as a director of participant education for SunTrust Bank. He earned his Bachelor of Science degree from the University of Florida.

The firm welcomed Miranda Stefan to its Boston, Massachusetts, location in April. She is a financial advisor specializing in providing comprehensive wealth management services to highnet-worth investors and corporate executives. Prior to CAPTRUST, Stefan was a client growth manager with GreenSky. She earned her Bachelor of Science degree from Wheaton College.

Seth Stephen Seth Stephen joined our San Antonio, Texas, office in March. As a vice president, financial advisor, he provides financial planning and analysis and investment advice to high-net-worth individuals and families, businesses, and nonprofit organizations. Previously, Stephen was a financial advisor with Capital Investment Companies. He earned his Bachelor of Arts degree from Hampden-Sydney College.

Molly Thompson

NEW ADVISORS

In March, the Doylestown, Pennsylvania, office welcomed senior financial advisor Molly Thompson. As an institutional advisor, she is responsible for providing retirement plan advisory services to corporate fiduciaries. Previously, she was a senior vice president and head of institutional client service for Macquarie Group. Thompson earned her Bachelor of Arts degree from Villanova University.

Sue Anderson

Liz Ulrichson

Sue Anderson joined CAPTRUST in Vienna, Virginia, from Wells Fargo. As a vice president and institutional financial advisor, she is responsible for providing investment and fiduciary advisory services to retirement plan sponsors, endowments, and foundations. Anderson earned her Bachelor of Science degree from Boston University.

Our Des Moines, Iowa, office welcomed Liz Ulrichson, an institutional advisor responsible for providing retirement plan advisory services to corporate fiduciaries, in January. Prior to CAPTRUST, Ulrichson was an associate financial advisor with Keeling Wealth Advisors. She earned her Bachelor of Science degree from Iowa State University.

CAPTRUST RECOGNITION Eddie Welch In March, CAPTRUST announced the promotion of Eddie Welch to managing principal for the firm’s Wealth Management Group. Welch joined CAPTRUST in 2020 from Welch Hornsby, an independent, fee-only investment advisory firm he cofounded in 1988, where he served as the firm’s chairman and chief executive officer. In his new role, Welch leads CAPTRUST’s wealth management business line, overseeing financial planning, tax, client service, and operations.

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Nick DeCenso The Triangle Business Journal honored CAPTRUST’s Director of Wealth Planning and Investments, Nick DeCenso, with a spot among its 2021 class of 40 Under 40 Award winners. The 40 Under 40 Awards recognize outstanding professionals under the age of 40 for their contributions to their organizations and to the community. The Triangle Business Journal 40 Under 40 virtual awards event will take place on June 24.

CAPTRUST RECOGNITION Barron’s Honors 17 Advisor Teams Seventeen CAPTRUST advisor teams were named among Barron’s 2021 Top 100 Institutional Consultants. This is the publication’s seventh annual institutional consultant ranking, which recognizes the nation’s top teams specializing in investment consulting for defined contribution and defined benefit plans, endowments, and foundations. The teams and their lead advisors ranked as follows: #7 – Team Dallas, led by John Picket and Travis Whitten #8 – Team Schott, led by Stephen Schott

#19 – Team Atlanta, led by Philly Jones, Evan Melcher, and Zack Sadler

Excellence Award

#23 – Team Allentown, led

by Jim Edwards, Wes Schantz, and Jeff Loehwing #24 – Team Bailey, led by Eric Bailey

The Excellence Award is a way for CAPTRUST associates to recognize coworkers who perform at the highest levels and exemplify the firm’s culture. Award winners represent an elite group whose attitudes and performance positively impact CAPTRUST’s clients and the firm more broadly.

#25 – Team Strickland, led

by Jon Strickland

#49 – Team Esch, led by Dan Esch

#29 – Team DiGiacomo, led

by Dan DiGiacomo

#63 – Team Medlin, led by Mark Medlin

#37 – Team Strodel, led by Jim Strodel

#72 – Team Pratico, led by Mike Pratico

The following Excellence Award winners were recognized at the firm’s May company update meeting:

#39 – Team Schmitt, led by Barry Schmitt

#73 – Team Wilt, led by Steve Wilt

#46 – Team Stanicek, led by Jason Stanicek

Elyse Earwicker

#74 – Team Birmingham, led by Paul Owen and Phil Anderson

#47 – Team Doylestown, led

by Chris Kulick, Paul Schaffer, and Scott Wertheim

#82 – Team Eskamani, led

by Shaun Eskamani

Senior Associate, Vendor Analysis

Laurie Lange

Senior Manager, Integration Lead

WOMEN'S STOCK PITCH AND LEADERSHIP SUMMIT CAPTRUST’s Beryl Ball, an institutional advisor working in Richmond, Virginia, represented the firm as a proud supporter of the sixth annual William & Mary Women’s Stock Pitch & Leadership Summit in March.

Hosted virtually by the Raymond A. Mason School of Business at William & Mary, the summit boasted two full afternoons of leadership development and professional networking with alumni and industry professionals from all areas of business.

Top DC Honors from NAPA

In March, the National Association of Plan Advisors (NAPA) recognized CAPTRUST on two prestigious lists for 2020: Top Defined Contribution (DC) Advisor Teams and Top DC Advisor Multi-Office Firms based on assets under advisement.

The Top DC Advisor Teams list highlights the nation’s leading retirement plan advisory firms. Not only did this year’s list include more than 26 CAPTRUST teams, but the firm also took first place on the Top DC Advisor Multi-Office Firms list.

First Place Eddy Award

CAPTRUST’s Blueprint Financial Wellness and Advice Services was recognized earlier this year by Pensions & Investments and honored with a first place Eddy Award for communication excellence in financial wellness. The firm’s Blueprint Financial Wellness and Advice Services provide oneon-one advice for individuals on the phone or in person, a Retirement Blueprint® application, proactive employee outreach via email, and ongoing measurement and reporting.

Best Places to Work

CAPTRUST ranked #13 among companies with more than 50 employees on InvestmentNews’s annual Best Places to Work list. The annual list of top firms is compiled through online employee and employer surveys.

Power List

CAPTRUST CEO Fielding Miller was named to Business North Carolina’s Power List in April. The inaugural list features the state’s most influential leaders covering key industries and is based on interviews with business community officials, research, and reader suggestions.

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We know that investors are looking for experienced and trusted advisors who can provide wealth

Joe Scarpo Principal, Financial Advisor Greensburg, PA

management services that are focused on their unique circumstances and tailored to their goals.

In more than 30 years of acting as a fiduciary to some of the country’s biggest retirement plans, we have gained valuable insights that we can apply to your wealth planning and investment challenges.

captrust.com • 919.870.6822 | toll-free: 800.216.0645 • 4208 Six Forks Road, Suite 1700 | Raleigh, NC 27609