VESTED Summer 2024

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Unretirement Benefits

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Anne Youngson Twisting the Plot PLUS Worth the Weight Financial Longevity An Alternative Realm Focus on Adventure SUMMER 2024

A CAPTRUST volunteer at the afterschool mentoring program at Neighbor to Neighbor

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CAPTRUST’s $100,000 Charity of Choice grant will be transformative for Neighbor to Neighbor, empowering us to expand our capacity and provide one-on-one mentorship to more economically disadvantaged students.

”

Spencer Hathcock Program Manager, Neighbor to Neighbor

CAPTRUST Community Foundation At CAPTRUST, we believe we have a profound responsibility to share our success and improve our communities. One way we do this is through the activities of the CAPTRUST Community Foundation (CCF), our in-house, employeerun charitable foundation.

The CCF’s mission is to enhance the lives of children in communities we serve. Each year, the foundation selects a Charity of Choice and five additional organizations to receive national grants.

captrustcommunityfoundation.org | toll free: 800.216.0645 4208 Six Forks Road, Suite 1700 | Raleigh, NC 27609 2

Winter | 2023

DEAR FRIENDS,

PUBLISHER

I hope this letter finds you enjoying your summer with family and friends and having some relaxing downtime, which hopefully will include some time to read this issue of VESTED.

J. Fielding Miller Chief Executive Officer

EDITOR-IN-CHIEF Roxanne Bellamy Marketing Manager

Our Second Act cover star this season is Anne Youngson, a British writer who has written four novels in her 70s, after retiring from a 33-year career as a senior executive at the car company Land Rover. I hope her optimism inspires you to finally reach for your own lifelong dream, whatever that may be.

Also in this issue, we go on safari with Boone Thomson, who turned his Tennessee-based photography hobby into a second career in Africa. (The pictures in this story will amaze you.) Thomson’s adventures brought him to tears and brought him to another passion: removing the African painted dog from the endangered species list.

EDITORIAL ADVISORY BOARD

path between complete retirement and full-time work. Spoiler alert: There’s not much resting on a hammock in this story.

High achievers like Dr. Ruffolo are changing the way we look at retirement.

• the surprising ways that hearing loss affects your health;

Finally, our research team has written an excellent article about new perspectives on investing in alternative asset classes, such as private equity, real estate, and venture capital. “An Alternative Realm” is a must-read. If you want to learn more about these investments, please reach out to your financial advisor for more information.

• the problems that come with having more money:

Thank you again for reading VESTED, and as always, we welcome your feedback.

• the fitness benefits of rucking; and

Onward and Upward!

• how to write a financial plan if you plan to live to 100.

All the best,

I think you will also find interesting a range of other topics, including:

How do you find satisfaction after a highly celebrated career that made millions of lives better? Our Lifestyle Feature, “Unretirement Benefits,” explores the ways Dr. Robert Ruffolo and thousands of other professionals like him are forging a new

Volume 10, Issue 2 | Summer 2024

Jeremy Altfeder Financial Advisor

Kathleen Hopkins Communications

Frank Bub Senior Director

John Keeton Financial Advisor

Nick DeCenso Senior Director

Marcus Magyar Financial Advisor

Philip D’Unger Wealth Planning

Christeen Reeg Financial Advisor

Karl Eggerss Financial Advisor

Anthony Scarpo Financial Advisor

Matt Godleski Financial Advisor

Fred Sloan Financial Advisor

Mike Gray Financial Advisor

Eddie Welch Managing Director

Jennifer Wertheim Tax Director

ART DIRECTION AND MARKETING Lonzetta Allen Associate Art Director

Elizabeth Altman Distribution Manager

Jennifer Mastrapasqua Art Director

Kaylin Nuñez Graphic Designer

Karen Sommerfeld Copy Editor

WITH THE ASSISTANCE OF

Azul Photography Raleigh, NC

J. FIELDING MILLER CAPTRUST Chief Executive Officer

Worth Higgins & Associates Richmond, VA

Getty Images Seattle, WA

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IN THIS ISSUE

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6

21

30

FEATURES BENEFITS 6 UNRETIREMENT

by Jeanne Lee YOUNGSON: TWISTING THE PLOT 10 ANNE

by Roxanne Bellamy

LONGEVITY 21 FINANCIAL

by Nanci Hellmich

ALTERNATIVE REALM 30 AN

by Justin Pawl

COLUMNS PURSUITS: WORTH THE WEIGHT 18 PASSION

by John Curry

LEGACY: FOCUS ON ADVENTURE 38 LASTING

by Jeanne Lee

ANGLE: SOUND FAMILIAR? 26 EXPERT

by Kim Painter

43 CLIENT CONVERSATIONS

29 RANDOM GLEANINGS

46 CAPTRUST HAPPENINGS

MINDSET: MORE MONEY, DIFFERENT PROBLEMS 35 MONEY

by John Curry

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In This Issue | Summer 2024

THE WRITERS

ROXANNE BELLAMY Roxanne Bellamy is a member of the CAPTRUST editorial team. She has a Bachelor of Arts and Master of Philosophy in English and has written for many industries, including beer, textiles, and finance. Bellamy’s work has appeared in Fast Company, Inc., Forbes, and more. Her retirement dream is to be a National Geographic Explorer.

JOHN CURRY CAPTRUST’s former chief marketing officer, John Curry is now constructing his own Second Act and adjusting to unretirement in Spain. In the finance industry since 1986, Curry served in senior management roles with firms such as ProShares and AllianceBernstein and was instrumental in the launch of VESTED magazine, serving as its original editor-in-chief.

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

NANCI HELLMICH 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.

KIM PAINTER Kim Painter is a freelance writer specializing in health, wellness, and retirement lifestyles. She was a USA TODAY staffer and contributor for many years, working as a reporter, columnist, and blogger. She now writes for AARP and other outlets. She lives in McLean, Virginia, where she practices what she preaches: wearing sunscreen, eating kale, and getting at least 10,000 steps a day.

JUSTIN PAWL Based in San Antonio, Texas, Justin Pawl is a financial advisor and a member of the CAPTRUST Investment Committee. He has a Bachelor of Arts in environmental science and a Master of Science in biogeochemistry from the University of California, Santa Barbara. Pawl serves clients in complex sectors of the financial services industry and specializes in investment, financial, estate, and tax planning strategies.

All publication rights reserved. None of the material in this publication may be reproduced in any form without the express written permission of CAPTRUST. ©2024 CAPTRUST. 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. The information and statistics in this magazine are from sources believed to be reliable but are not warranted by CAPTRUST Financial Advisors to be accurate or complete.

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LIFESTYLE FEATURE

UNRETIREMENT BENEFITS

by Jeanne Lee

After an illustrious career in drug development and research, Dr. Robert Ruffolo retired from Wyeth Pharmaceuticals in 2008. For decades, he gave his all as a scientist and pharmaceutical executive.

His crowning achievement was the discovery of carvedilol, a revolutionary treatment for congestive heart failure that has helped tens of millions of patients and for which he was honored with some of his industry’s most prestigious awards.

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Lifestyle Feature | Summer 2024

Ruffolo was so passionate about his work that the last thing he wanted for his later years was to spend a lot of free time relaxing. “I don’t really have hobbies,” he says. “I get so much pleasure from work [that] I don’t play golf or tennis. I don’t go out at night or drink and carouse.”

When Ruffolo first started talking about retirement, his wife, Stephany, wondered where he would direct his abundant energy. She needn’t have worried; his retirement lasted only one month. “One, I wasn’t going to sit around and watch television,” he says.

“Two, I wanted to have fun.”

Fun, for him, meant advancing the science he loved, so Ruffolo designed his own version of retirement. Let’s call it unretirement.

“I have a lifetime of knowledge about how drugs are discovered and developed,” says Ruffolo. “Companies want me to help them develop these

drugs, and I’ll do it as long as my health holds out. It keeps me busy, and I’m having fun, yet without the crushing burden of responsibility that I had when I was working.”

Before retiring, Ruffolo led a 9,000-person team and often worked 12 to 16 hours a day, seven days a week. He rarely slept more than four hours a night, rising at 4:00 a.m. to clear his email inbox before arriving at the office by 5:00 a.m. Now, at 74 years old, Ruffolo sets his own schedule.

“I get up at 1:30 or 2:00 a.m., never later,” he says. “I do an hour on the treadmill, 30 minutes of weights, then start work.

People think I’m crazy, but it makes me happy. There’s a good feeling I get when I’m awake before other people.”

These days, Ruffolo is a consultant for several pharmaceutical companies, a board member for multiple biotech startups, and an expert witness on patent infringement lawsuits. He travels frequently to Asia, the Middle East, and Europe.

“

As much of the workforce has gone virtual, some individuals who already retired have now been hired back to work remotely or have stayed on in consulting roles.

”

Evan Cumalander

“There’s a shift in people’s idea of retiring because of how the workforce has changed, especially in the past few years,” says Evan Cumalander, a CAPTRUST financial advisor in Wenatchee, Washington. “As much of the workforce has gone virtual, some individuals who already retired have now been hired back to work remotely or have stayed on in consulting roles.”

On Your Own Terms

He teaches, lectures, and—with Stephany—engages in philanthropic endeavors, including renovating a lecture hall at The Ohio State University, his alma mater. It’s a packed and fulfilling life, designed very much to his own specifications.

One factor contributing to the unretirement trend is that work has become more age-friendly and flexible due to technology tools and new social norms—like flexible hours and virtual meetings—that became more common during the pandemic.

Unretiring in Retirement

“Before, people were waking up at 7:00 a.m., making coffee, driving to an office, and spending a lot of time away from their families,” says Cumalander. “Now, those who have perfected their craft throughout their careers can be just as effective working reduced hours virtually.”

While Ruffolo’s version of work during retirement may seem extreme, the trend of unretirement has gained attention in recent years as a larger share of baby boomers approach this stage of life in innovative ways. These go-getters are creating paths that include some form of intermittent, remote, or scaled-back work. Some are trying a different field altogether.

Nearly one in five adults age 65 or older is employed today—an increase from only 11 percent in 1987, according to the Pew Research Center. Even among those 75 and older, about 9 percent are employed, more than double the share in 1987. College-educated workers are more likely to continue working than those without a college degree.

One of Cumalander’s clients, who worked at a food distribution company, changed her whole approach to retirement when it became possible to do her job remotely. As the main contact for some strategic customer relationships, she negotiated with her employer to continue working after age 65 as a 1099 consultant.

1099 consultants are considered independent contractors, not employees. (The number 1099 refers to the tax form employers must file for each independent contractor.) As such, Cumalander’s client was ineligible for employer-sponsored health insurance, but she was able to get on Medicare.

“She lives an almost-retired lifestyle, with very flexible hours,” Cumalander says. “She’s able to keep one toe in the water, working with people she likes and having something to do, while getting supplemental income so she doesn’t have to withdraw as much from her retirement accounts.”

Dr. Robert Ruffolo

Cumalander sees a trend of similar trajectories. “With remote work now a common option, people can extend the length of time they work,” he says. “Instead of stopping work completely at age 65, they might start paring back at age 60 and continue working until age 70 or later.”

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Connecting and Contributing Work is often a core part of a person’s identity. And research shows that continuing to work can help people stay sharp, maintain skills, and feel they’re a part of something.

“For someone who has worked 40 to 50 hours a week for their entire life, many of their social and emotional connections may come through their workplace,” says Teri Parker, a CAPTRUST financial advisor in Riverside, California.

Leaving that world behind entirely can create a void, she says.

“Suddenly, no one is calling to ask your opinion, or you’re no longer writing a paper on a new approach,” says Parker. “It can be disorienting.”

A renegotiated work-life balance can make all the difference in an enjoyable unretired lifestyle.

THE OTHER BENEFITS OF UNRETIREMENT

Post-retirement work has perks well beyond the financial. There’s a sense of well-being that comes from staying connected with coworkers, having workrelated conversations, and receiving invitations to social outings. Many older adults enjoy the structure and sense of purpose that comes from working in their later years.

Research shows a host of physical and mental health benefits associated with unretirement, including: •

More activity. Working part time after retirement tends to help people stay active and may reduce the risk of chronic health problems, like diabetes or heart disease, according to U.S. News & World Report.

•

Better brain health. A part-time job that is mentally challenging, without being overly stressful, can reduce the chance of dementia, reports WebMD.

•

Improved social health. A side job provides valuable opportunities to meet new people and feel part of a community.

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Lifestyle Feature | Summer 2024

For instance, Cumalander points to another client: a veterinarian who sold his practice at age 59 and moved to the coast, a few hours from his former home. The new owner asked if he would support the continuity of the business by phasing out gradually instead of leaving altogether. He happily agreed.

“This client loved his work so much that he would drive for two hours and stay in an apartment at his best friend’s house on Tuesdays, Wednesdays, and Thursdays every week,” says Cumalander. “Then, he would be so excited to drive back to the beach, where every weekend was a long weekend and felt like a vacation.”

Financial Planning Implications Working after retirement can help defer dipping into your nest egg and add structure to your days, but a paycheck can also cause unexpected repercussions for retirement income and taxes. Your age, the amount you’re earning, and the type of employment you’re engaged in are just a few of the factors to be mindful of.

Before returning to work or negotiating consulting terms, it’s good to check with a financial advisor about potential implications for your Social Security benefits and retirement withdrawal strategies.

If you aren’t yet receiving Social Security benefits, post-retirement work may allow you to delay starting, which will likely mean a higher benefit down the road. For people who are already drawing Social Security and are full retirement age or older, earned income has no impact on benefits.

However, for those younger than full retirement age, complex rules apply. For one thing, when earnings exceed $22,320, the Social Security Administration will withhold $1 from benefits for every $2 earned above that threshold. This money is credited back after full retirement age. A different rule applies the year someone reaches full retirement age.

STAYING CONNECTED TO YOUR WORK COMMUNITY

The range of options for flexible work has never been wider. “Before the pandemic, I never had a Zoom call,” says Ruffolo. “I was forced to adopt new technologies, and now I rely on them to keep pace with my industry.

I was on the cutting edge of science when I retired 16 years ago, and I am on the cutting edge of science now.”

Virtual networking can be challenging, but refreshing connections is key to getting back in the workforce. It’s worth creating profiles on sites like LinkedIn, Indeed, or Meetup.

Search Facebook for groups that are related to your interests. Reddit may also be a good informal tool for keeping abreast of industry discussions through its thousands of industryspecific subreddits.

“To uncover opportunities, think about how you can get involved in your community,” says Parker. “Maybe join the Chamber of Commerce, a professional networking group or two, or your local Rotary Club. You’ll find like-minded individuals and professionals with whom you have common interests and histories.” These types of organizations can help you develop your new base of personal and professional referrals.

“

For retirement, you should do what makes you happy. For me, it's about staying active and giving what I have to offer.

”

Dr. Robert Ruffolo “There are so many rules for different scenarios,” says Parker.

“I would suggest people make an appointment with the Social Security Administration or with their financial advisor to clearly understand the full picture before making the decision to go back to work.”

Unretiring could also change your strategy for taking retirement distributions. “If you have income, maybe you’ll need to withhold more, or maybe you’ll want to reduce or stop taking an IRA distribution,” says Parker. “If the wages are significant, it’s a good idea to meet with a tax professional.”

When someone is drawing a pension and then returns to work at the same company, there’s a big difference between going back as a 1099 contractor and going back as a regular employee. “If you’re a consultant, you might not qualify as an employee, so you might be able to keep drawing on the pension,” says Parker. “However, returning to the company as a regular employee could create a problem. Before making any decision, talk to a pension expert in human resources to ask about constraints.”

Life expectancies today extend long past traditional retirement age, so it’s likely the unretirement lifestyle will continue to evolve. “That’s a long time to have nothing to do,” says Ruffolo.

“For retirement, you should do what makes you happy. For me, it’s about staying active and giving what I have to offer.”

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SECOND ACT

A N N E YO U N G S O N :

Twisting The Plot

by Roxanne Bellamy

As part of her PhD program in creative writing, Anne Youngson drafted a short story each week and then reviewed it with her academic advisor: a successful, well-connected professional author with a long and admirable career. But one week, instead of a short story, she brought him a longer story—something she had been working on for a while.

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Second Act | Summer 2024

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“He read it and told me, ‘I wish I were writing this,’ which I thought was just about the nicest thing anyone ever said to me.” Soon after, the advisor introduced her to a literary agent, who introduced her to a publisher, who immediately asked to buy the rights to her manuscript—and that is how Youngson’s first novel, Meet Me at the Museum, came to be.

It was an unexpected cascade of events. She was 69 years old.

In the eight years since, Youngson has published three more books and written dozens of stories. Mostly, she writes about transformation. “I wanted to study the idea that, whatever your age, if things aren’t right, if there are things you want to explore, or if you want to bring change to your life, you can still do it.”

At 76, Youngson speaks from experience. She didn’t start writing seriously until she was in her 60s.

The Rover Years Before she became a published writer, Youngson worked for the British car company Land Rover, climbing steadily over 33 years to chief engineer of the Defender brand and managing director of special vehicle operations. It was a surprising path for someone with an undergraduate degree in medieval English. But Youngson says her transition from humanities to engineering was intentional.

Celebrating 25 years at Land Rover

“When I left university, I didn’t want a job involving English literature because I felt that I’d come out of school without any practical skills,” she says. “I wanted to tackle problems that were open to practical analysis.”

She took an entry-level role in the marketing department at what was then called British Leyland Motor Corporation but soon realized the only place she could have fun was in engineering. “In vehicle manufacturing, it’s the engineers who shape what the company does,” she says.

So Youngson worked her way over to the engineering department and then rose through the ranks to the executive level. It was a highly technical environment, and her team was almost entirely male.

Despite the ways she differed from her colleagues, Youngson says she rarely felt like an outsider and loved changing from job to job within the company. “I had quite a satisfying and varied career, which I suppose is why I stuck it out for so long,” she says. “But I have to say, when I started, I always thought, I’m just going to do this until I write my novel.”

One of her closest colleagues at Land Rover was engineer Nick Seale. He and Youngson worked together on joint vehicle projects, designing cars in collaboration with Honda and BMW.

“

Whatever your age, if things aren’t right, if there are things you want to explore, or if you want to bring change to your life, you can still do it.

Anne Youngson

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Second Act | Summer 2024

”

Posing with one of the Defenders she helped create

EARLY WORKS Seale says he can see how Youngson’s corporate skill set contributes to her success as a writer. “We worked on some very, very big projects with large teams and lots of different aspects,” he says. “Anne didn’t have a technical background, but she knew how to listen and learn from others. She’s a brilliant listener, which is not at all common. She listened to understand people’s points and then balance them with each other.”

But his favorite thing about working with Youngson was her consistent humility. “She has no ego,” Seale says. “She was never pushing her own feelings onto people and pulling them into accepting them. Instead, she’d say, ‘I don’t know what the technical solution is, so let’s listen to all the views and figure it out.’ That gets people on your side.”

Before her first novel, Anne Youngson wrote two nonfiction books about her work in vehicle manufacturing. Both were co-authored with engineer Nick Seale and executive director Mike Carver.

The first, When Rover Met Honda, is a collection of memories from some of the British and Japanese employees who collaborated in the late 1970s.

The second, British Leyland Motor Corporation, 1968–2005, gives an inside look at the company that later became Land Rover.

In the late 1970s and early 1980s, when the Rover Cars division was working with Honda, “product development between a Japanese company and a British company was basically unheard of,” says Seale. “There was no road map. There were no preexisting legal agreements. Throughout, it was very important to balance people’s conflicting views and ways of doing business.”

Youngson and Seale enjoyed learning the cultural difference between teams. And Seale says Youngson’s ability to listen and then speak plainly and honestly became a critical part of the collaboration.

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Second Act | Summer 2024

From Engineering to Sweet Peas A few years after Ford bought Land Rover in the early 2000s, the company offered Youngson a nice retirement package. But at only 56 years old, she felt too young to stop working. She was worried about losing connections and not feeling fully engaged in the world.

To sort out her feelings, she made a list of all the things she could do if she retired. “Some of them were really silly, like growing sweet peas,” says Youngson. The more time she spent looking at the list, the more excited she felt about retiring.

She also felt this was the time to finally get serious about her writing. “I’d written all the time but only little stories for myself,” she says. “I wasn’t really taking it seriously. And I thought, well, now’s the time to explore.” Eventually, she accepted Ford’s offer.

Figuring Out Retirement That first year was stressful and disorganized. “I was a bit panicked,” Youngson says. “When you’re working, you know what to expect. You know you’ll have however many emails to answer each day and a full schedule, but all of that had gone away. I wasn’t getting any emails at all, except from people telling me how to invest my retirement funds.”

To fill the time, Youngson signed up for lots of volunteer opportunities and worked in governance for multiple nonprofits. “And all the time I was writing,” she says. “Then one day I realized my calendar was as full as it ever was, and nobody was paying me!” She decided to make a change.

To focus her energy, Youngson enrolled in a two-year evening course in creative writing at Oxford University, just down the street from her home in Oxfordshire, England. She went on to earn a master’s degree and then a doctorate. “Every time I did a course, I was really stimulated,” she says. “I was writing away. But then I’d gradually just sort of run out of impetus, so I’d think, OK, time to do another course! And finally, I ended up with a PhD.”

Friends and Feedback There’s an old idea about artistic jobs like writing, painting, and musical composition that says talent is innate. It can’t be taught or learned, so taking classes is pointless. Youngson found that idea both true and false.

“I don’t think any of the courses I’ve taken have actually taught me anything,” she says. “What they’ve done is enable me to understand what I’m already doing and how I can do it better.”

She says another benefit of going back to school is that she made unlikely friends. “I thought the biggest danger of retirement is that you end up mixing with only the same people all the time—people who think like you and live like you because that’s who your friends are.”

Enrolling in courses was a way to meet people who weren’t in their 50s or 60s and retired. “But still, in that first class, when we went around the room

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“

Being part of a community of people who are writing seriously and giving you feedback on your work? I think that’s invaluable.

Anne Youngson

”

introducing ourselves, I found myself thinking, What am I doing here? These people are nothing like me!”

At home with her husband Paul

Over time, four of those classmates became her closest writing friends. They’d meet monthly to review each other’s work. Almost a decade later, they still meet three or four times a year. “Being part of a community of people who are writing seriously and giving you feedback on your work? I think that’s invaluable,” says Youngson. “I feel privileged to have met them.”

One member of this writing group is Bev Murray, a business psychologist and coach who turned to writing after her first child was born to add “a stream of creativity” to her life.

For Murray, Youngson is both a friend and an inspiration. “There’s so much humor, intelligence, and generosity in Anne, and these things come through in her writing.” She says Youngson has a special ability to interpret human nature and experience.

At the Burford Tolsey museum, where she volunteers

HER FIRST FOUR NOVELS

Meet Me at the Museum: a novel of letters between two strangers, both unsettled by their lives and craving change.

The Narrowboat Summer: a story about three women facing radical transitions, and the riverboat journey that brings them together.

The Six Who Came to Dinner: six short mysteries with colorful suspects who have complicated motives.

A Complicated Matter: a young woman’s journey to find her place in the world, during the Blitz in London.

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Second Act | Summer 2024

Although the media often attributes this competence to Youngson’s age, Murray says that message obscures the magic in her friend’s success. In 2018, when Meet Me at the Museum was nominated for a Costa Book Award for Best First Novel, the headlines almost never failed to mention that 70 is a surprising age to make a debut.

“I worry that, in the wider world, Anne’s age gets attention because it is seen as being so unusual,” says Murray. “From my perspective, she would have been successful no matter when she started writing. Her work shows her experiences in the world and her level of understanding of what she has experienced. Her age may be a part of that, but I have plenty of older friends who do not demonstrate the same level of understanding.”

Seale agrees. “Anne can read people,” he says. “It comes out of seeing that there are other ways of doing things and thinking.”

Although Youngson’s books often feature people who are middle-aged or older, her characters are focused on the future, not lost in their own reveries on aging. Youngson says this, too, is intentional.

“

Every day, you’re looking forward to something. It’s what we do as human beings.

”

Anne Youngson

ADVICE FOR NEW WRITERS “An awful lot of novels feature older people who are either used as plot devices—you know, a contrast to whatever is going on in the lives of the younger people— or they’re looking back,” she says. “They’re so often going back into the past to understand how their lives ended up where they are. I would read those and think: But you keep on living!”

Whether you’ve always wanted to write or now feel inspired to try for the first time, here is Anne Youngson’s advice to you: •

Don’t believe the lore. “There are a lot of myths about writing. One is that you have to be young and gorgeous. I was neither.

Another is that you need to be published.

You don’t. What’s important is the enjoyment.

You should be writing because you’ve got something you want to explore through words.”

•

Take yourself seriously. “Taking writing seriously means taking yourself seriously as a writer. And that is completely independent of whether you have an audience. It means satisfying yourself. Try to improve what you’re doing, finesse the work, and come up with ideas. These are the things that will make you feel you aren’t wasting your time; you’re meeting your potential.”

•

Start short. “With a short story, you can have an idea, realize it, then sit back and be done with it. And of course, it’s much easier to get your friends to read them.”

Always Looking Forward For Youngson, this is key to understanding human nature, aging, and good storytelling. “This is what you don’t understand when you’re younger is that you just keep on living,” she says. “Every day, you’re looking forward to something. It’s what we do as human beings.

We’re always looking forward to something, even if it’s only tomorrow’s breakfast.”

It may also explain how Youngson has kept her positive attitude about change. “I’ve always believed that tomorrow is going to be at least as good as, if not better than, today.”

Part of her optimism was a driving belief that, one day, she would finally find the time to take her writing seriously. “I always knew the time would come,” she says. “It’s like I was saving it up as a treat until I had the time and headspace to really enjoy it.”

And now, she does.

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PASSION PURSUITS

WEIGHT WORTH THE

by John Curry

“It helps me sleep better, I’m more relaxed, and I get the feel-goods from the endorphins,” says Colby Warren, 63, of Cary, North Carolina. Warren, a manager in CAPTRUST’s marketing department, is referring to the benefits he gets from rucking, his go-to workout these days.

Rucking is a form of weight-bearing aerobic exercise that has grown in popularity among fitness enthusiasts from weekend warriors to hard-core endurance athletes.

Rucking is simply walking while wearing a weighted backpack, or ruck. The word ruck derives from the German word rucksack, meaning backpack.

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Passion Pursuits | Summer 2024

“My doctor said, ‘I want you to start exercising and getting to the point where you’re having a little trouble breathing,’” he says.

“Rucking really gets my heart pumping and thumping.”

While the concept of strapping weight to your back and going for a walk may seem simple, rucking offers a powerful combination of aerobic exercise and strength training that engages muscles throughout the body. It provides an exceptional full-body workout that improves cardiovascular fitness; builds muscle endurance; and strengthens the core, back, shoulders, and legs.

“Carrying weight while you walk engages muscles throughout your body in a way that regular walking doesn’t,” says Warren.

“It’s low impact, but it’s been a very effective way for me to build strength and endurance.”

Born to Ruck Rucking has obvious connections to military training, where soldiers have long been required to carry heavy packs and march for extended periods, but its origins go back much further.

“The act of rucking has been happening since the huntergatherer period,” says Jason McCarthy, founder and CEO of GORUCK, the company credited with sparking the modern rucking movement. Indeed, humans’ ability to carry heavy things over long distances has been a necessary survival skill throughout evolution.

“People have been rucking in some way, shape, or form their entire lives,” says McCarthy. “They just haven’t noticed, or it hasn’t been intentional. Think of bringing in your groceries, walking to the bus stop with a bag full of books, or going to grab a coffee with your kid in a wearable baby carrier. They all ladder up organically to rucking.”

McCarthy founded GORUCK in 2008 to manufacture rugged backpacks designed for rucking and host endurance events centered on the activity. But success didn’t happen overnight.

“When I first produced the GR1 [the company’s initial product], I didn’t sell any, and it was a reality check of how challenging the business world would be,” he says.

Today, McCarthy is optimistic about GORUCK’s future as people are becoming much more intentional about their relationship with and approach to rucking. “I believe that it will become bigger than running,” he says.

Low Impact, Many Benefits A conversation with his doctor about his blood pressure and physical condition sparked Warren’s initial interest in rucking.

McCarthy concurs: “Because it’s low impact, it has fewer injury risks than something like running.”

In addition to the physical benefits, ruckers report significant mental health advantages. “It also promotes getting outdoors and getting into nature, getting exposed to sunlight and fresh air, which is great for your mental health,” says McCarthy. The rhythmic nature of rucking combined with being out in nature can reduce stress and anxiety.

Ruckers frequently report improved sleep quality and a sense of well-being after their sessions.

“Rucking is a great way to build community, and is, in my opinion, always best to be done with a group,” says McCarthy.

“That could be several people in a ruck club, your spouse and kids, or taking your dog for a walk. Building a community through exercise and wellness is an incredibly powerful thing.”

The Right Stuff While you can get started rucking with any backpack filled with weight, investing in proper rucking equipment can make a significant difference in comfort and safety, especially as you increase the weight and duration of your sessions.

“For someone starting out, I’d suggest they do it right and get good equipment out of the gate,” advises Warren. “Otherwise, you might hurt yourself or get frustrated, and you’re not going to pursue it any further. If you invest a couple hundred dollars in the right gear, you’ll take to it, and it’ll benefit you.”

GORUCK is one of several companies that offer backpacks designed for rucking. These packs feature padded hip belts and sternum straps to distribute weight evenly across the body, as well as durable construction to withstand the rigors of longdistance rucking. Ruckers add weights or sandbags to their packs to increase the load as desired to dial in their workouts.

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GETTING STARTED

If you’re interested in giving rucking a try, here are a few tips for safely beginning your journey: •

Gear up (a little). You don’t need fancy equipment to start. Any backpack will do, but one with a hip belt will provide better weight distribution and comfort. Fill it with books, water bottles, or canned goods to reach a weight of 10 to 20 pounds.

•

Wear the right shoes. You’ll want sturdy running shoes with a firm sole or hiking boots, if you have them.

“I started with a 30-pound pack for 30 minutes, which is a common go-to for ruckers,” says Warren, whose other favorite physical activities include weightlifting and loading sound gear for the band he manages.

•

Start slow. Begin with a short ruck (15 to 30 minutes) at a comfortable pace. Focus on good posture with your shoulders back and core engaged.

As you become more comfortable with the activity, you can increase the weight in your pack and the distance or time you ruck. Some experienced ruckers work their way up to carrying 40 to 60 pounds or more for extended periods, with some even taking on ultramarathon-distance rucking events.

•

Listen to your body. Don’t push yourself too hard, especially in the beginning. Take breaks when needed, and adjust the weight or distance if you experience any pain.

•

Warm up and cool down. Like any workout, a light jog or walk for 5 to 10 minutes before and after you ruck will help prevent injury.

Beginner to Marathoner For those new to rucking, it’s best to start slowly and gradually increase the weight and duration of your sessions over time.

“Start with [shorter distance], time, and weight, and work your way up,” says McCarthy. If you aren’t an avid gym-goer, 10 pounds is a good starting weight for women and 20 for men.

Choosing a suitable route is also essential for an enjoyable and effective rucking experience. Look for routes with a mix of terrain and scenery. “My 30-minute route includes some quality nature time,” says Warren. “I’m walking through woods; there’s a substantial incline and a nice downhill stretch. It’s a good workout, but it comes easily and allows me to think.”

As you get stronger, increase the weight, distance, or pace of your rucks. You can also incorporate hills or trails for a more challenging workout.

Remember, consistency is key.

Rucking offers something for everyone, whether that’s a straightforward way to improve your fitness, a new challenge to push your endurance limits, or a means of achieving a greater sense of mental calm. With its accessibility and multitude of benefits, it’s no wonder this once-niche workout is growing into a widespread fitness phenomenon. “It gives me peace of mind that I’m doing something healthy and I’m enjoying the activity,” says Warren.

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Passion Pursuits | Summer 2024

PLANNING FEATURE

FINANCIAL

LO N G E V I T Y

by Nanci Hellmich

“I once had a client tell me his goal was to die with just enough money to pay his very last doctor’s bill,” says CAPTRUST Financial Advisor Mike Gray. Even though the comment was made in jest, the client was serious about not exhausting his money too soon. Gray says this is a common concern.

After all, no one knows how long they’re going to live. So how do they know they won’t run out of money?

“We recommend people do their financial planning with the assumption that they’re going to live a long time because of better preventive medicine and better treatments,” says Gray, who’s based in Raleigh, North Carolina.

Many retirees today need sufficient liquid investments to last 20 to 40 years.

Otherwise, they face a longevity risk, which means they might survive longer than expected and outlive their resources.

“You may not live to 100,” says Gray. “But what if you live to 97, and you only planned for your money to last until you were 90? Then you’ll spend the last seven years broke. You don’t want to be down to your last nickel.”

That’s a scary thought, but it can happen, says Gray. “I’m currently working with a client whose mother is 93 and has had dementia for seven years. She has survived COVID-19 three times. Now she’s living in an expensive long-term-care facility, and he’s watching her burn through her assets.”

His client doesn’t want to be in the same situation.

Recent surveys reinforce the wisdom of long-term financial planning. In America, the average retirement age is 62 to 65 years old. A 65-year-old man can expect to live to age 82.5 (about 17.5 years in retirement), and a 65-yearold woman can expect to live to age 85 (about 20 years in retirement), according to the Centers for Disease Control and Prevention.

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Although a small percentage of people currently make it to 100, a 2024 report from the Pew Research Center says there will be many more centenarians in the coming decades.

Calculating Expenses Several factors go into fiscal planning for a century-long life, from expenses and asset allocation to inflation and market volatility. As a financial planner, Nick DeCenso, CAPTRUST senior director of wealth solutions, says estimating how much retirees will spend is the hardest part of developing a plan.

“We know our clients’ assets,” says DeCenso. “We know what their income looks like. We know their Social Security benefits.

We know their liabilities. But anticipating spending is tough.”

“For the first three to five years of retirement, we often see a spike in spending,” he says. “A lot of folks are taking trips they’ve put off, leaning into their lifelong hobbies, or buying big-ticket items they’ve always wanted. They tend to spend less later in retirement.”

What might seem like a small difference on paper can have a significant impact when you grow these expenses with inflation over long periods. Smith says some people like to create a detailed budget. Others just want a general understanding of how much they spend.

Adding Costly Items Beyond regular living expenses, each person’s long-term financial plan needs to incorporate occasional large expenditures, such as buying a second home or helping adult children purchase property, paying for weddings or grandchildren’s educations, or some combination of those things.

These expenses are important because they have big potential to move the needle, jeopardizing the chance you’ll achieve your financial goals. “You may end up paying for a wedding that’s so expensive it impacts your retirement lifestyle,” Gray says.

Figuring out expenses is important, says Briana Smith, a CAPTRUST financial advisor in Raleigh, North Carolina. Smith helps clients develop plans for a life expectancy of 95.

Today, more clients are making big gifts to their children, grandchildren, and charities during their lifetimes, says DeCenso. “If I live to 100, for example, that means my two daughters are going to be 70 before they get an inheritance. If I’m able to give them financial gifts while I’m still alive, then I get to see some of the fruits of those gifts.”

“We want to get as accurate a number as possible,” she says. “For instance, we need to know if you’re spending $15,000 a year on groceries and $30,000 a year on travel.”

Some parents opt to give each child or grandchild the maximum annual amount that you can give without reporting it to the Internal Revenue Service. In 2024, that amount is

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Winter | 2023 Planning Feature | Summer 2024

$18,000 from one parent or $36,000 from both. “That’s fine as long as it doesn’t put the parents’ retirement plan in jeopardy,” Smith says.

Gray suggests taking care of yourself first. “Make sure you’re comfortable with your resources and planning so you can have the lifestyle you want and eliminate—or at least mitigate—your risk of creating a financial shortfall.”

Models and Scenarios Advisors use financial planning software to give clients a reasonably reliable look into the future.

The software considers factors such as age, assets, living expenses, charitable donations, automobile expenses, education costs, and gifting to family. Once all your expenses and sources of income are in the system, it can calculate different long-term financial scenarios, adjusting for inflation, market volatility, increased healthcare costs, and other factors.

The goal is to model multiple versions of the future so you can prepare accordingly. “From there, we can determine how growth-focused each client needs to be, how much money they’ll need available at key moments in their life, and how much of their total portfolio should be allocated to different types of investments,” Gray says.

For a lot of people, modeling creates peace of mind.

“We’ve worked with people who were absolutely petrified about the future, and after using these software tools, they were comfortable living a lifestyle that was considerably nicer than they thought they could ever afford,” says Gray.

Customizing Investments Despite what many online calculators might say, when it comes to investments during retirement, there is no onesize-fits-all strategy. “The best mix depends on each person’s unique assets and liabilities,” says DeCenso. “Now more than ever, people are retiring with multiple assets beyond their homes and employer-sponsored retirement accounts.”

Besides Social Security and, in some cases, pensions, retirees might have other income streams, such as rental properties, business partnerships, or severance from a company. They might also be consulting or working full or part time.

“All of this factors into how we decide on the right mix of equities and fixed income in investments,” says DeCenso.

Sometimes, retirees go too far in one direction. “I see folks who are at each of the extremes,” he says. “They think, I’m retired, so I’m going to be as conservative as possible with my investments.”

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“

The best mix depends on each person’s unique assets and liabilities.

Nick DeCenso

”

“Other folks are too aggressive,” he says. “They keep too high of a percentage of their assets in equities after retirement, which can create substantial risk.”

There’s a lot to consider when making investment decisions.

Someone who’s getting Social Security and has a pension and other sources of income might need to withdraw less from their portfolio. This person can afford to take more risks. But a retiree who receives smaller Social Security benefits and has no pension can’t afford to take as much risk.

Dividing Investments into Buckets Smith suggests thinking about investments as buckets: 1.

2.

The Cash-Flow Bucket: Keep one to three years of your retirement withdrawal needs in cash or cash-equivalent accounts, such as a money market fund or—in today’s interest rate environment—an exchange-traded fund (ETF) that tracks a three-month Treasury bill. “This can help retirees avoid selling stocks if there’s a dip in the market,” Smith says.

The Income Bucket: This is money for the intermediate term. “We recommend having roughly seven years’ worth of withdrawal needs in a more income-focused bucket, something that includes a balanced asset allocation with a mix of stocks and bonds,” she says. “It could even include some private credit alternatives to boost yield.” This asset allocation is dependent on the retiree’s risk tolerance.

“You have a nice waterfall effect with dividends and interest flowing from the income bucket to the cash-flow bucket,” Smith says.

3.

The Growth Bucket: The first two buckets should fund the first 10 years of retirement. “This creates peace of mind and allows clients to be more growth oriented with their longer-term assets in the third bucket,” she says.

Avoiding a Financial Shortfall The 4 percent rule is a guideline that says if retirees withdraw 4 percent annually from their portfolios, they won’t exhaust their savings. “In general, this is a good budgeting strategy,” Gray says. “However, it’s prudent to check your withdrawal percentage regularly. If your rate starts to creep up, then 4 percent might not be sustainable.”

In some cases, clients aren’t worried about running out of money. They’re more concerned with preserving investments to pass on to their heirs or favorite charities.

Smith suggests clients might want to live off dividends and interest to preserve the current buying power of their portfolio. She says financial advisors often coordinate with a client’s estate planning attorney.

“Sometimes, we need to help strategize the most tax-efficient estate plan,” Smith says. “This could include setting up and funding certain types of trusts or simply considering which assets should be directed toward heirs versus charities.”

In some cases, people choose to leave homes to their children.

Other retirees downsize during their golden years and use some home equity to cover expenses.

Scan this QR code with your mobile device camera to learn more about the three-bucket strategy.

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Planning Feature | Summer 2024

GET A HANDLE ON SPENDING

Monitoring expenditures is key to avoiding a financial shortfall in retirement.

One way to determine the amount you spend regularly is to look at the annual summary of expenses provided by credit card companies and financial institutions. Expenditures are usually divided into categories such as groceries, shopping, travel, entertainment, and wellness.

On top of these costs, there will be other recurring expenses, including mortgages, taxes, utilities, and insurance.

“In everybody’s budget, there are some nonnegotiable items such as power bills and health insurance, but the travel budget, discretionary entertainment, and dining out may be flexible,” Gray says.

People are sometimes surprised when they examine their spending. One couple Gray worked with dined out constantly, and when they looked at the amount, they said, “Holy cow, we need to change that.”

“We’ve had some situations where there were problems that were going to happen if they kept on the same excessive spending path, so we helped them right the ship,” says Gray. “If your money can’t last until your 90s, then your spending may have to be adjusted down so you can get there.” A financial advisor can help you run the numbers and find places where you can cut back.

“My mother-in-law is retired and conscious about her spending,” says DeCenso. “She lives in a 3,000-squarefoot house that is worth $1 million and is almost paid off. If she needs more money, she has a lot of equity to work with.”

Regular Check-ins Retirement planning is not a one-time exercise. “That would be nice, but it’s not realistic,” says DeCenso.

“Nothing will go precisely as planned. The markets won’t move in a straight line and may do better or worse than everyone thought. Also, your spending will fluctuate and evolve. There will be times when you spend more or less than expected.”

Smith says she tells clients to revisit their plans annually or any time they have a major life change, such as moving to another state, having more grandkids, getting divorced, or having a death in the family.

DeCenso says some have a clear mental picture of the portfolio amount they’re determined to stay at or stay above. “They think: If I dip below my peak savings amount, it feels like I’m trending toward zero,” he says. Sometimes, this type of thinking can cause more harm than good, causing people to underspend and worry unnecessarily.

“You saved for your retirement, so enjoy it,” he says. “This is what those long years of saving were meant for.”

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EXPERT ANGLE

SOUND FAMILIAR?

by Kim Painter

When Tricia Ashby-Scabis was a practicing audiologist, she saw the same scene play out over and over. A new patient would introduce themself by saying they were only getting a hearing test to appease their family, after years of misheard conversations, frustrating phone calls, or too-loud TVs.

The patient would insist their hearing was fine. It was just that other people were mumbling, says Ashby-Scabis, senior director of audiology practices at the American Speech-LanguageHearing Association (ASHA). Most times, she says, the test would show hearing loss.

If you’ve noticed other people talking too softly, found yourself annoyed by people speaking to you from other rooms, or found that your usual television or radio volume is creeping steadily upward, you might have hearing loss too. And if you do, you’re in good company.

Your genes, and health conditions like diabetes and high blood pressure, can raise your risk of hearing loss, says Patricia Gaffney, a professor at Nova Southeastern University in Fort Lauderdale, Florida, and president-elect of the American Academy of Audiology.

According to the National Institutes of Health (NIH), 15 percent of all adults have trouble hearing—a number that increases to 33 percent for people between ages 65 and 74 and nearly 50 percent for people over 75.

Noise exposure also matters. Too many loud concerts or a noisy job without ear protection can damage your hearing over time.

“But most people don’t really notice the damage on a day-to-day basis because it’s such a gradual change,” says Gaffney.

Hearing experts say it isn’t surprising that most people don’t know they’re having trouble hearing, since hearing loss usually happens gradually over time. But missing or ignoring the signs can have profound consequences for your relationships, work, health, and safety.

“The first thing people might notice is that, when they enter a noisy environment, it’s much harder to have a conversation,” she says.

How and Why Hearing Loss Happens Age-related hearing loss is largely a matter of wear and tear on the inner ear and the nerves between our ears and brains, says Ashby-Scabis.

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Expert Angle | Summer 2024

15 percent of all adults have trouble hearing—a number that increases to 33 percent for people between ages 65 and 74 and nearly 50 percent for people over 75.

“They may also start to find other people’s speech less clear, especially the voices of women and children, because hearing at higher pitches declines fastest.” When people start to lose their ability to hear high pitches, they’ll hear mostly low pitches instead.

These sound like mumbling, hence the common complaint.

Turning up the TV and asking others to speak up won’t fix the problem, says Gaffney. “If you have a faulty inner ear, no matter how loud we make it, it’s still not going to make things any clearer.”

Other warning signs, according to the NIH, include trouble understanding people over the phone, often asking people to repeat themselves, and struggling to understand a conversation when two or more people are talking. Tinnitus, or ringing in the ears, is another possible sign.

How Hearing Loss Impacts Your Life ASHA reports that adults who know they have hearing loss are unlikely to do anything about it unless it gets severe. It’s not unusual for people to wait 10 years or longer to consider hearing

aids, the primary form of treatment. “Over those years, you’re missing out on so much,” says Gaffney.

Studies have linked untreated hearing loss to depression, anxiety, and social isolation, says Laura Coco, an assistant professor of audiology at San Diego State University. “As communication gets harder, people just slowly drop out from their communities and their families.”

Working adults can lose confidence in their ability to do good work, she says. Untreated hearing loss is linked with lost income and a higher rate of unemployment, according to the nonprofit Hearing Health Foundation.

“

As communication gets harder, people just slowly drop out from their communities and their families.

Laura Coco

” 27

HOW TO GET A HEARING TEST It’s even linked to a higher risk of falling, perhaps because poor hearing creates a “sense of disorientation,” says Ashby-Scabis.

In the past few years, researchers have also found an increasingly strong connection between hearing loss and cognitive decline.

First, researchers at Johns Hopkins University found that people with mild hearing loss were twice as likely to develop dementia as those with normal hearing and that those with moderate to severe hearing loss were at even higher risk.

More recently, the same researchers found that getting hearing aids led to a 50 percent drop in the rate of cognitive decline in older adults who had both hearing loss and an elevated risk for dementia.

It is important to note that the studies don’t prove that hearing loss leads to dementia because correlation is not causation. “One thought is that there’s a common cause that leads to both dementia and hearing loss,” says Coco.

If untreated hearing loss does increase the risk, isolation could be the link, she says. We’re social creatures, and when we lose connection, our brains suffer.

Another consideration is that untreated hearing loss can make someone seem like they have memory problems when they don’t.

“When you don’t hear what people are saying, you can’t remember it,” says Ashby-Scabis. “That’s another reason to get answers and get help.”

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Expert Angle | Summer 2024

Worried about signs of hearing loss in yourself or a loved one? The best way to get answers is with a hearing test.

Professional tests, which cost $85 to $200, are typically covered by Medicare and many other insurers if you have signs of a hearing problem. Tests are offered by audiologists and by hearing instrument specialists, who are licensed at the state level to fit and dispense hearing aids.

In some cases, an audiologist or your primary care doctor will refer you to an ear, nose, and throat specialist. This is common if it seems like your hearing problem might have a medical cause.

If you don’t want to go straight to a doctor, you might start by using an app that assesses your basic hearing level.

Two popular options are Mimi and Sonic Cloud. Both are available for Android and iOS devices. In the fall of 2024, the Johns Hopkins Bloomberg School of Public Health will begin offering its own free Hearing Number app.

RANDOM GLEANINGS While making the Summer 2024 issue of VESTED, we came across some interesting factoids too good not to share.

ONE SNEEZE, ONE VOTE To vote on hunting decisions as a pack, painted dogs sneeze. If you hear their sneezing chorus, you’re listening in on democratic decision-making.

Source: Scientific American

GOLD-ISH The gold medals awarded at the Olympic Games haven’t been pure gold since before World War I. According to the International Olympic Committee, gold medals are required to be at least 92.5 percent silver and are plated with about 6 grams of pure gold.

STICK TO IT

WHY RUCK?

According to the National Bureau of Economic Research, complete retirement leads to a:

The U.S. government recommends at least 150 weekly minutes of endurance activity and two sessions of strength training. Only 19 percent of women hit these recommendations, while 26 percent of men do. Rucking is one way to combine these activities. Another benefit?

Rucking burns about two to three times as many calories as walking.

•

5 to 16 percent increase in difficulties associated with mobility and daily activities;

•

5 to 6 percent increase in illnesses; and

•

6 to 9 percent decline in mental health.

Source: GORUCK

Partial retirement may be a way to fend off these effects.

Source: Olympics.com

KIDS WITH CREDIT Our emotional relationship with money is largely set by the age of seven. Key financial habits, such as saving money, are formed in early childhood and have a lasting influence on how we interact with money throughout our lives.

Source: Harvard Business Review

YOUR EMOTIONAL EAR The right ear responds more to speech and logic, while the left ear is more tuned in to music, emotion, and intuition. Those with greater hearing loss in their left ear may have trouble understanding people’s emotions.

Source: Healthyhearing.com

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INVESTMENT FEATURE

by Justin Pawl, CFA, CAIA, CFP®

After the market challenges of the past few years, many investors are now more interested in investment options beyond stocks and bonds. These alternative investments have become increasingly popular choices, but, because they’re relatively new to the public sphere, most people know little about them.

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Investment Feature | Summer 2024

In the realm of finance, alternative investments—also called alts—represent a departure from traditional avenues such as stocks, bonds, and cash equivalents.

The term alternative is a catch-all label. Under it, the universe of alts includes a wide range of assets, many of which have little to nothing in common, except that they don’t fit into conventional investment categories.

Examples of alts include hedge funds, private equity, venture capital, real estate, commodities, infrastructure, natural resources, and collectibles like art and wine. What sets them apart is their potential for higher returns, their unique risks, and their tendencies to behave independently from traditional public markets.

SIX CORE CATEGORIES OF ALTS

Private equity focuses on equity investments in mature private companies with potential for operational improvements and growth.

Venture capital invests in early-stage companies with high growth potential, albeit sometimes higher risk.

Private debt provides debt financing to companies outside traditional banking systems, often with collateral backing.

Democratizing Access

Real estate invests in property development, management, or renovation.

Historically, alternative investments have been the domain of large institutional investors. Burdensome regulations once led managers to offer these strategies solely through private partnerships, which limited access mostly to pension plans, endowments, and the ultra-wealthy.

Real assets focus on tangible investments that have an intrinsic value due to their physical attributes, such as commodities, land, metals, infrastructure, and natural resources.

Now, regulatory guidelines have softened, allowing managers to build more investor-friendly vehicles, like mutual funds and exchange-traded funds (ETFs) devoted exclusively to alts. At the same time, individual investors have shown demand for alternative investment strategies, and the financial industry is responding.

The overall effect has been a democratization of access to alts, and a corresponding explosion of assets under management.

According to PitchBook, assets under management in the alts space nearly doubled between 2017 and 2022, rising from $7.4 trillion to $14.7 trillion. The same report forecasts that growth in the alts sector will accelerate exponentially in the next few years, reaching $19.6 trillion by 2028.

Funds of funds invest in a portfolio of other funds rather than making direct investments in companies or assets. Funds of funds offer diversification but also typically involve additional layers of fees.

What is motivating investors to move their money into alternative investment strategies? Mostly, diversification and the potential for higher long-term returns.

Targets and Managers Within the alts market, private equity and venture capital generally offer the highest potential long-term returns.

Investing in private companies allows ownership access to businesses much earlier in their life cycles, when potential for growth is higher than in more mature publicly traded firms.

However, private equity and venture capital typically also have the longest time horizons.

Return targets vary by fund, but in general, private equity funds aim for average annualized returns of 10 to 20 percent over a seven- to 10-year time horizon. Venture capital funds typically seek even higher returns but also involve the higher risk of investing in early-stage companies.

Source: “Private Capital’s Path to $20 Trillion,” PitchBook

Of the six core categories of alts (private equity, venture capital, private debt, real estate, real assets, and funds of funds), real 31

assets generally have the lowest targets, aiming for 5 to 10 percent net returns.

Realized performance varies considerably, based on both the inception year of the fund and the manager’s skill. Manager selection is always important for actively managed investment strategies, but for alts, it’s critical.

Figure Two shows the dispersion of returns between investment managers in different types of alts from 2005 to 2018. Over that period, the median return for private equity funds was 13.79 percent per year—an incredible bounty for investors. But it’s important to notice the full range of results. Those invested with the bottom 10 percent of managers barely made a dime, while those invested with the top 10 percent produced returns of more than 30 percent.

For venture capital funds, the range of returns was even greater.

Those invested with the top decile saw more than 34 percent returns, while those invested with the bottom decile lost money

Source: “Private Capital’s Path to $20 Trillion,” PitchBook

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Investment Feature | Summer 2024

instead. The narrowest dispersion was in private debt, in which top-quartile managers earned an 11.42 percent return, and bottom-quartile managers earned 6.33 percent.

Allocating to alts can be a high-stakes game. To protect your portfolio from major losses, and improve your chances of success, align yourself with a manager who has disciplined investment and due diligence processes. In the alts universe, participating in the sector by simply entrusting your money to a manager, and hoping for the best, could be an exceptionally costly decision.

Liquidity Options: Daily to Decades Liquidity refers to how easily an asset can be bought or sold without affecting its price. Cash is the most liquid asset of all.

For other investments, the higher their liquidity, the easier it is to turn those assets back into cash. Less liquid assets require more time to be converted to cash, and the conversion may come at a higher cost.

Source: CAPTRUST Research

Within the alternative investment universe, a full spectrum of liquidity options exists, from daily to decades. The most liquid alts are ETFs and mutual funds, which provide access primarily to public market investments. As a result, these alts must limit their holdings to ultra-liquid securities like stocks, bonds, currencies, and commodities, with a few exceptions.

Private partnerships sit at the other end of the spectrum.

Because the managers of private partnerships effectively set their own liquidity terms, they can target investments in illiquid private equity or venture capital companies. These can have investment horizons of multiple decades.

For investors who don’t want to lock away their assets for many years or decades, but still want some of the benefits of alts, a newer form of mutual fund, called an interval fund, provides an interesting compromise between full and zero liquidity. An interval fund is a type of closed-end mutual fund that does not trade on the secondary market.

Like other mutual funds, interval funds price daily, have a high degree of transparency, and report taxes on 1099s.

Unlike other mutual funds, interval funds periodically offer to buy back a percentage of outstanding shares from shareholders at net asset value. These are called repurchase offers. Shareholders aren’t required to sell their shares back, but they can choose to participate in repurchase offers during specified intervals. Repurchases are typically done on a pro rata basis, and they allow for a percentage of shares (usually 5 to 25 percent, depending on the fund prospectus) to be repurchased during any given window.

The important piece to understand is that even though interval funds may offer liquidity windows, managers often limit the total amount of outflows available. As a result, an investor may not always be able to withdraw as much as they would like during one of these windows.

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Fee Considerations The pros and cons of specific alts strategies are complicated, and they require research and due diligence. Yet there are common considerations for everyone interested in these types of assets. One is fees.

Alternative investment strategies are actively managed, specialized strategies that often come at a premium price. Fees are usually highest on private partnerships and take the form of an annual management fee—usually 1 to 2 percent of assets—plus additional fees on profits generated by the fund.

These are called success fees, carried interest, or incentive fees, and they typically range from 10 to 20 percent of the profits.

Interval fund fees tend to be lower, ranging from a 0.9 to a 1.5 percent management fee. Most interval funds also include a performance hurdle (e.g., 5 percent annually) that the portfolio needs to reach before the manager charges an additional percent of profits.

Mutual fund and ETF fees are the lowest in the alts universe because they are generally prohibited from charging incentive fees. That said, with annual management fees of 0.5 to 2 percent, their fees are still considerably higher than the fees most people are familiar with for public equity and fixed income options.

An allocation to any alternative investment strategy is intentionally designed to deliver a return profile that’s different from public investments like stocks and bonds.

Therefore, if the expected net-of-fees performance provides benefits to a portfolio—like higher returns, lower volatility, or increased diversification—the fees may be justified.

A financial advisor can help unravel the net-of-fees performances for different funds. They can also assess the potential risks and returns for different types of alternative investment strategies to help you discern which are worth considering as part of your unique financial picture.

The pros and cons of specific alts strategies are complicated, and they require research and due diligence.

Getting Started

Critics of alts often point to fees as a reason to avoid them.

This argument resonates. When you have a choice between two identical products, it’s smart to choose the one that costs the least.

As distinctions between public and private investments continue to blur, opportunities are expanding for individual investors to participate in alternative investment strategies.

And it seems this expansion is just beginning. Yet as this article highlights, understanding what you’re buying is vital, as incorporating alts can influence the fees, liquidity, and performance of your portfolio.

But when it comes to alternative investments, it’s important to focus on the skill of the manager and expected net-of-fees performance as well. Net-of-fees performance refers to the return on capital reported by an investment strategy after deducting management fees and other expenses.

Alternative investments are not appropriate for all investors. But in many circumstances, alts may make a sound addition to a well-diversified investment portfolio.

To thrive in this new universe, personal education or aligning yourself with an experienced advisor is critical.

MARKET UPDATE | JULY 2024 So far this year, the markets and economy have proven resilient. What will the rest of 2024 hold? Watch the latest installment of our quarterly Market Update video to learn which key indicators CAPTRUST is watching.

In this edition, CAPTRUST Chief Investment Officer Mike Vogelzang recaps asset class returns and economic indicators for the first half of the year and explains what could happen next as the country and world continue to normalize after several years of exceptional challenges.

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Investment Feature | Summer 2024

MONEY MINDSET

MORE MONEY,

DIFFERENT PROBLEMS

by John Curry

Imagine this: You arrive early for a Monday morning meeting, only to be regaled with a colleague’s story about a fabulous weekend trip to New York City. Their trendy boutique hotel, Michelin-star dinners, and orchestra seats for the hot Broadway show sound nice. Maybe you can schedule a weekend in the city in the next couple weeks. After all, you haven’t been there since before the pandemic. Next thing you know, you’re checking in for your flight, theater tickets in hand. But did you check your budget?

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It’s easy to believe that wealthy people don’t have to worry about their finances. But the reality is that they often face their own unhealthy consumer habits, fueled by access to money, societal pressures, and a culture that encourages consumption.

Unhealthy Habits “We all know Americans struggle with their day-to-day finances,” says Chris Whitlow, head of CAPTRUST at Work. “But it isn’t only lower- and middle-income people who face challenges.”

According to a recent “Mind over Money” survey from Capital One and The Decision Lab, two-thirds of Americans feel anxious about their financial situations, and more than half have difficulty controlling their moneyrelated worries. They’re most worried about their financial futures, including not having enough money to retire, keeping up with the cost of living, and managing debt.

“Having wealth solves some of your money issues, but it doesn’t make you immune to financial stress,” says Whitlow. “Wealthy people just suffer from a different set of worries.” Often, these worries are related to spending behaviors.

Problems of Abundance While some of these issues might rightly be called high-class problems—or problems of abundance—they are, nonetheless, problems, and they can leave a significant mark on a family’s finances. Some spending behaviors can have negative financial consequences: Impulse purchases. The ability to afford more can lead to buying impulsively, bypassing discussion, budgeting, or consideration of actual need. “This can be especially tempting with luxury items or high-end experiences,” says CAPTRUST Financial Advisor Jeremy Altfeder.

As wealth increases, so does the ability to spend, and the impact of these behaviors can be significant.

Conspicuous consumption. When money isn’t a major concern, it can be more difficult to resist the allure of having the latest and greatest of everything. People fall into this trap when they feel pressure to maintain a certain lifestyle or appearance, even if it strains their finances.

Keeping up with the Joneses. There isn’t a single clinical term for “keeping up with the Joneses,” but it appears to be related to several concepts. Social comparison is a normal human tendency; in the context of keeping up with the Joneses, it becomes excessive and focused on material possessions or social status. Fear of missing out (FOMO) may also play a part. FOMO creates anxiety about missing out on experiences or possessions others have, and it can fuel the desire to keep up.

Lifestyle creep. This occurs when your expenses unintentionally creep up as your income increases. “After getting a big raise, you may, for example, shop and go out to eat more or add a long weekend trip to your annual vacation agenda,” says Altfeder. If you do, that raise won’t translate into more money in the bank.

As wealth increases, so does the ability to spend, and the impact of these behaviors can be significant. Combine a couple impulse purchases, a dash of lifestyle creep, and a touch of keeping up with the Joneses, and you may find you’re not making any real progress toward your long-term financial goals.

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Money Mindset | Summer 2024

A Few Helpful Tips “We live in a consumer-driven society,” says Altfeder. “We’re bombarded by commercials telling us we should spend our money on cars, trips, and things for our homes. And, of course, these ads are targeted at people with the means to buy. It’s no wonder so many Americans suffer from overspending and too much debt.”

There’s nothing inherently bad about spending, and it’s normal to spend more as income and wealth rise. What’s important is that you make intentional choices about your spending rather than falling prey to ad messaging and dysfunctional spending behaviors. Here’s how: 1.

Make a not-a-budget budget. “While you may not need a detailed monthly budget, doing a little math to understand what you’re spending can be revealing,” says Altfeder. Even small purchases add up over time, and that once-in-a-while splurge that happens a little too often can take a toll.

2.

Get the full picture. Often, the cost of luxury purchases extends beyond the initial outlay. For example, buying a vintage car, a second home, or a plane includes significant maintenance and upkeep costs that may generate financial stress. Creating a full estimate of those expenses can inform the decision-making process and reduce the likelihood of surprises down the road.

3.

Don’t neglect long-term planning. Focusing on the here and now can lead to neglecting retirement savings, estate planning, and other long-term financial goals. A good financial plan will get you excited about the future and may cause you to rethink your current spending. Further, just because things are comfortable today doesn’t mean they’ll stay that way forever. A plan will help identify likely outcomes and the biggest risks.

4.

Avoid bad debt. Easy access to credit and the ability to afford the payments on it can lead you to accept more than a healthy amount of debt. “Good debt, like mortgages, student loans, and business loans, can help enable long-term goals,” says Whitlow. “Bad debt—like credit cards and any loan used to buy a depreciating asset—steers you away from your goals.

Moderation is key, and even good debt, when overused, can turn bad.”

5.

Acknowledge the impulse. It can be difficult to notice when you’re falling into the trap of FOMO or an impulsive purchase. That’s why these behaviors are so problematic. But it’s possible to cultivate mindfulness about spending in order to dampen the impulse.

A few simple rules may also help. For example, implement a timeout rule that requires you to sleep on spending decisions more than a certain amount, or delay that new car, boat, guitar, or cruise purchase by 30 days to see if you still need it.

You may find you do not, and over time, you’ll become more engaged when big spending decisions arise.

Spending with Intention While wealthier Americans may not suffer from the make-orbreak financial issues and stresses that average Americans face, they do experience their own breed of money-related stress. The allure of consumerism is strong and carries real financial consequences. But it doesn’t have to be that way. With a more intentional approach to managing spending, wealthy Americans can enjoy the fruits of their wealth while also attaining their long-term financial goals with less stress and worry.

“I have these conversations with clients—not all the time, but often—and they’re always surprised by how much they spend and what they spend on,” says Altfeder. “A lot of the time, they don’t see a lot of value in what they’re paying for, which makes it easy for them to dial back. They feel like they’re making a positive difference in their finances and are more in control of their lives in general.”

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LASTING LEGACY

FOCUS ON

ADVENTURE

by Jeanne Lee

Boone Thomson has just returned to his home in Franklin, Tennessee, after a monthlong trip to Botswana.

While there, he showed a small group of guests some of his favorite things about Africa. They saw elephants and hippos at close range.

They watched lions and painted dogs hunting antelopes and buffalo in the floodplains of the Okavango Delta.

Photos by Boone Thomson

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Reader Q&A Lasting Legacy | Winter | Summer 20242024

It’s something Thomson would never have imagined he’d be doing for a living: leading small-group photographic safaris.

On this last trip, a mother leopard called her two cubs to come out of hiding and reunite with her, high up in a jackalberry tree. Jan Shealy, who traveled with her husband, Tommy, was blown away. “I don’t even know where to begin,” she says. “What an adventure!” It was Shealy’s first safari.

Thomson’s own first safari was in 2015. Recently retired from the recruiting business he owned and operated for almost two decades, Thomson is now in his fifth year of taking clients and friends to places like Zimbabwe’s Victoria Falls and Kenya’s Maasai Mara National Reserve through his company, Boone Safaris.

2024 is the first year in which his passion for wildlife will be his full-time occupation.

Going Pro The dream hatched from a simple hobby. When his kids were growing up, Thomson took pictures of them for fun. “I even became the sports photographer at their high school,” he says. When one of his sons advanced to college football, Thomson happily focused his camera on the field and became the official photographer for Yale University’s football team during his son’s first year of school.

Once his kids graduated, space opened in Thomson’s life, so he started aiming his lens at landscapes and wildlife instead. He especially loved photographing the larger fauna at Grand Teton National Park in Wyoming.

Thomson studied the work of professional photographers and followed them on social media. One day, he happened upon a GoFundMe campaign for a renowned wildlife photographer. In exchange for a donation, the photographer would join him on a safari to watch the Great Migration in the Maasai Mara.

The trip turned out to be the most exhilarating of his life. “I vividly remember the first time I saw a lion in the wild,” Thomson says. “There were no fences. It was just a lion out there lying down, sleeping. I probably cried. Seeing a leopard in real life, a cheetah, massive herds of wildebeest, and zebra as far as the eye could see, it was a spiritual experience.”

Thomson’s pastime evolved into a calling. He traveled and studied with Californiabased photographer Roy Toft. “I went with him to a workshop in Costa Rica, then to Brazil to photograph jaguars, then to Botswana, and then to Patagonia to photograph pumas,” Thomson says. “I thought he had the coolest job in the world.”

Soon, Thomson’s safari habit became too costly to keep up, and he got the idea to start Boone Safaris. He has been sharing his passion for African wildlife ever since.

“

I vividly remember the first time I saw a lion in the wild. There were no fences. It was just a lion out there lying down, sleeping. I probably cried.

Boone Thomson

”

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“

In the end, we will conserve only what we love; we will love only what we understand; and we will understand only what we are taught.

Baba Dioum

”

By Land, Air, or Water Thomson’s photographs brim with emotion. Some feel like portraits, capturing an animal’s personality and mood. A muscular hippo tilts its head, looking back over its massive round shoulder as if asking a question. A delicate bird with a pointy beak passes a winged insect to its mate. A cheetah cub, mid-leap, looks as playful as a preschooler.

One of Thomson’s goals is to become certified as an African field guide. To that end, he’s spent hundreds of hours studying African species and their behaviors. A benefit of his deep knowledge is that it gives him an advantage in setting up shots and sharpening his photography.

“When a lion comes into the pride, the first thing it does is make contact with the other lions,” he says. “They rub their heads together.” Because he can anticipate this behavior, Thomson can make sure he’s in position to capture the best shot.

At Boone Safaris, guests choose from different types of game drives and viewing. “The most common one is a specialized Land Cruiser that gets you very close to the animals,” he says.

“If you’re still and quiet, the elephants will come right up to you.” Another option is a hot air balloon, drifting above big herds of animals as they cross the reserves.

Boone Thomson and his wife, Paula

“We also do walking game drives in a private conservancy in Kenya,” Thomson says. “We go out with a Maasai warrior who knows the land.”

“

On his most recent trip, Thomson led a game drive by small boat on the Chobe River. “You’re down low in the water, pulling up next to hippos, and the elephants are swimming across,” he says.

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Lasting Legacy | Summer 2024

Seeing these animals in the wild as they have existed for millennia makes you feel like you are a part of the past.

Gardner Lee

”

Thomson notes that hippos may react when humans get close.

“Hippos can charge. They’re fast in the water, and they’re powerful, but they don’t swim. They run on the bottom. If they charge, our boat driver will speed away, and the boats are custom designed so that they won’t tip over.”

Close Encounters Getting close to large animals is a thrill. For Gardner Lee, of Birmingham, Alabama, traveling with Boone Safaris in 2022 was also a precious opportunity to bond with his daughter, Anna. In Kenya, a male lion approached their vehicle.

“What we didn’t notice was a female lion slipping up along the side,” he says.

“With my daughter’s camera focused on the male, the female jumped from a creek bed toward the truck and came within five feet of Anna,” says Lee. “The entire vehicle let go of one big gasp.”

They also watched a pride of female lions track down a herd of wildebeests and pick out the weakest. “Seeing these animals in the wild as they have existed for millennia makes you feel like you are a part of the past,” Lee says. “It gives you a new appreciation for our ancestors. It awakens you to your basic instincts as a human being.” He left with a lasting desire to help preserve the animals’ ways of life, away from civilization.

To Love and Protect For Thomson, Boone Safaris means much more than simply turning a profit. He wants to raise awareness of conservation efforts. Visitors to Africa often focus on seeing big game animals, but Thomson loves to introduce them to lesser-known species as well, like his favorite, the painted dog.

These big-eared, mottled canines are among the most endangered animals in Africa. Thomson became fascinated with them after befriending a researcher who had studied them for decades. Painted dogs are sociable; they hunt in groups. They have only four toes on each foot, an adaptation that makes them extremely agile. “Their intelligence and cooperation make them the most successful hunters in the animal kingdom,” Thomson says.

Once considered problem animals, painted dogs were frequently killed on sight by ranchers. There are only 6,600 living today. “Europeans gave them the name wild dog, and that name really stuck, but it sounds like a feral domestic dog that deserves to be shot,” Thomson says. “At Boone Safaris, we give 1 percent of our revenue to the Painted Dog Research Trust [PDRT].”

Thomson had the chance to stay at the PDRT compound for five days during his recent trip. He slept in a small hut and 41

observed the work being done by Zimbabwean university students. The students were viewing recent camera trap images and identifying individual pack members. Thomson says he was taken aback to see the name of one of the dogs. It was Boone.

Startled for a moment, he then remembered that his daughter had the privilege of naming a new dog two years ago when she worked at PDRT. She had named this one after her father.

Some of Thomson’s clients have been so moved by their experiences in Africa that they have allocated a portion of

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Reader Q&A Lasting Legacy | Winter | Summer 20242024

their charitable giving to causes like the painted dog and the Maasai community. “You’re probably not going to do that if you haven’t been here,” Thomson says.

As the Senegalese conservationist Baba Dioum put it, “In the end, we will conserve only what we love; we will love only what we understand; and we will understand only what we are taught.”

For Thomson, love and conservation are entwined. “I don’t want to have a company just to make money and build a big business,” he says. “I want to take people on safari so they’ll appreciate these animals and want to protect them.”

CLIENT CONVERSATIONS

READER Q&A In this edition of our reader Q&A, we compare the roles of a

?

fiduciary and broker, explore the function of gold in an investment portfolio, and look at the impact of presidential elections on stock market performance.

I’ve been hearing a lot about the fiduciary rule lately.

What is it?

A

The Department of Labor (DOL) recently issued the Retirement Security Rule, also known as the fiduciary rule.

This rule defines the term investment advice fiduciary for purposes of the Employee Retirement Income Security Act. The new rule is the culmination of a long process, through which the DOL has attempted to better clarify what a fiduciary is and what constitutes fiduciary advice for retirement accounts like 401(k)s and individual retirement accounts. This may be one of the reasons you’ve heard the term a lot lately, but the concept of the fiduciary is not new. In fact, it dates to ancient Roman law.

called regulation best interest, which raised the standard applying to stockbrokers.

In the context of personal finance and investments, registered investment advisors (RIAs) must adhere to a fiduciary standard of care. In other words, RIAs are legally bound to always act in your best interest.

While regulation best interest imposed a new standard on brokerage firms, the incentive still exists for brokers to recommend products that generate higher commissions.

This means that the investment advisor must always put your interest ahead of their own and must disclose any real or potential conflicts of interest. In other words, RIAs are required to provide advice and recommendations that are best for you, even if it means earning less for themselves or their firms. The fiduciary standard is the highest ethical standard in the financial services industry.

Another thing to know is that, in recent years, the U.S. Securities & Exchange Commission issued a separate rule

However, the primary difference between RIAs and brokerage firms still exists. Brokerage firms sell securities in exchange for commissions. This is a transaction-based business model. RIAs render investment advice in exchange for a fee that is not contingent on transactions. In general, investment advice from an RIA is rendered on an ongoing basis, so that the RIA’s fiduciary obligation does not end after a transaction takes place.

While these distinctions may seem subtle, understanding the difference can help you make better-informed decisions when seeking financial advice. When working with a financial professional, it’s crucial to understand the standard under which they operate for the specific services you’re seeking.

CAPTRUST is a fiduciary, first and foremost. We believe in the value of objective investment advice given solely in the best interests of our clients. The company has gone to great lengths to eliminate the kinds of conflicts of interest that are common in other parts of the financial services industry.

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What are the pros and cons of investing in gold now, while we’re experiencing a period of prolonged high inflation?

A

Investing in gold may provide some benefits as a portfolio diversifier and potentially as a hedge against inflation, but there are several issues to consider when contemplating an investment in this or other precious metals. Here are a few: •

Store of value. Gold has traditionally been viewed as a store of value and a safe-haven asset during times of economic uncertainty and high inflation. As currencies tend to lose purchasing power due to inflation, gold may be viewed as a way to preserve wealth during these periods.

•

Limited supply. The supply of gold is relatively limited and cannot be easily increased. This scarcity can make gold more attractive at times when the supply of money is increasing.

•

Portfolio diversification. Adding gold to an investment portfolio can help hedge against the potential negative effects of inflation on other asset classes, such as stocks and bonds. In addition, gold has historically shown a low correlation to stocks and bonds, providing a diversification benefit.

•

Timing. While gold is often considered an inflation hedge, its price can be volatile and does not always move in tandem with inflation in the short term. Also, timing the purchase and sale of gold can be challenging, so it’s essential to have a long-term investment horizon.

•

Trade-off. While gold may help preserve wealth during inflationary periods, it does not generate income or dividends like other assets, such as bonds or stocks.

If you do choose to invest in gold, it should be as part of a welldiversified investment strategy.

Investors should also be mindful of the additional costs of investing in physical gold, including storage, insurance, and transaction fees, which can erode potential gains. Exchange-traded funds (ETFs) that include gold may be a cost-effective alternative but do not offer the same features as investing in physical gold.

If you do choose to invest in gold, it should be as part of a well-diversified investment strategy and should not be considered a stand-alone solution to combat inflation. As always, consult with your financial advisor to determine what makes sense for you based on your investment goals, risk tolerance, and overall financial situation.

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Reader Q&A | Summer 2024

What impact do you foresee the 2024 presidential election having on stock market returns this year? How much do elections matter to markets?

A

While it’s true that elections can drive market volatility and shifts in investor sentiment in the short term, history shows that, over the long run, fundamentals like economic growth and corporate earnings tend to be far more important drivers of stock returns.

That said, there are some interesting historical trends around stock market performance during election years, especially years when an incumbent president is running for reelection.

According to our analysis, for the last 10 election years in which an incumbent was running, the S&P 500 Index has ended the year in positive territory, with an average return of 17.4 percent. That’s well above the average annual return of around 10 percent for all years.

Why might markets tend to perform better in incumbent reelection years? A big part of the answer likely comes down to the incentives for incumbents to take pro-growth policy actions to boost their reelection prospects. Fiscal and monetary policy may become more stimulative in these years, as incumbent administrations work to keep an economic expansion going.

We’ve already seen some of this dynamic play out, with large fiscal packages like the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, the Inflation Reduction Act, and the resumption of tax credits like the Employee Retention Credit injecting billions of dollars into the U.S. economy. Despite being an election year, the Federal Reserve has signaled that it will base its rate decisions solely on economic data rather than political calculations.

However, it’s important not to overstate the impact of elections on markets based on these data points alone.

Underlying economic fundamentals like consumer spending, the labor market, earnings growth, and productivity gains tend to be more powerful drivers of stock returns over time.

The rollout of artificial intelligence tools and their potential productivity benefits could be a strong tailwind for markets this year, regardless of the presidential election’s outcome.

Moreover, markets can certainly climb or sell off sharply in election years for reasons wholly separate from elections.

For instance, the 2008 financial crisis triggered a major sell-off late in that election year, while the extraordinary stimulus response to the COVID-19 pandemic sent stocks soaring into year-end 2020 after the November election.

While elections tend to garner outsize attention, they are just one of many inputs for markets. Investors would be wise to look past the political noise and partisan narratives and remain focused on the fundamentals that drive long-term returns. Diversification, discipline, and sticking to your plan should be top priorities, regardless of who occupies the White House.

If you have a question for the VESTED team, we’d love to hear from you.

Please send your questions to VESTEDmagazine@captrust.com.

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GIVING BACK CAPTRUST Community Foundation Announces Charity of Choice and National Grant Recipients Each year, the CAPTRUST Community Foundation (CCF) selects a Charity of Choice and five additional organizations to receive national grants. The core missions of these organizations must align with the CCF’s mission to enrich the lives of children in the communities it serves.

For 2024, the CCF selected Neighbor to Neighbor as its Charity of Choice. Based in Wake County, North Carolina, this organization builds pathways to social and economic mobility for families experiencing poverty, through education and employment intervention and services. Neighbor to Neighbor will receive a $100,000 grant and focused support from CAPTRUST employees throughout 2024.

The CCF also selected five additional nonprofits to receive $25,000 grants: •

Children’s Cancer Partners of the Carolinas provides crucial support to children, and their families, facing cancer in North and South Carolina.

•

Downtown Boxing Gym Youth Program empowers young people in Detroit, Michigan, through education, mentorship, and the sport of boxing.

•

Little Bit Therapeutic Riding Center is a Redmond, Washington, community for people with disabilities, with services including equine-assisted therapy, adaptive horse riding, and mental health and education programs.

•

Rosie’s House: A Music Academy for Children offers free music education to underserved youth in Phoenix, Arizona, fostering creativity and opportunity.

•

Wonders & Worries Inc., based in Austin, Texas, provides free professional support for children and teenagers during a parent’s serious illness or injury, so they can reach their full potential.

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CAPTRUST Happenings | Summer 2024

20 Percent of the Top 100 This year, 22 CAPTRUST teams were featured in Barron’s 2024 “Top 100 Institutional Consulting Teams” list. These rankings evaluate revenue, assets, and overall practice excellence. CAPTRUST secured more than 20 percent of the top 100 spots, with four teams positioned within the top 10. At right are the rankings of these CAPTRUST teams and their principal advisors.

Seven Advisors to Watch Seven CAPTRUST wealth management−focused financial advisors were named to AdvisorHub’s “2024 Advisors to Watch” list. This list considers scale, growth, and professionalism as core criteria and is open only to advisors with seven or more years of experience, a clean regulatory record, at least two years at their current firm, and a minimum of $150 million in assets under management.

#2: Team Chicago #3: Team New York/Boston #6: Team Warren, New Jersey #7: Team Allentown #12: Team Dallas #21: Team Stanicek #22: Team Schott #25: Team Doylestown #31: Team Strickland #33: Team Atlanta #34: Team Esch

#35: Team Eskamani #38: Team Schmitt #41: Team Bailey #43: Team Strodel #49: Team South Michigan #56: Team Birmingham #57: Team Wilt #61: Team DiGiacomo #68: Team Des Moines #95: Team Pratico #99: Team Duex

#17: David Akright in San Antonio, Texas #24: Veronica Karas in Lake Success, New York #27: John Keeton in San Antonio, Texas #29: Rebecca Pouliot in Boston, Massachusetts #33: Michael Peters in Bethlehem, Pennsylvania #42: Jay Irons in Roanoke, Virginia #121: Kel Normann in Sanford, North Carolina

16 Retirement Plan Advisors Celebrated on National Stage Sixteen CAPTRUST financial advisors were listed as 2024 “Top Retirement Plan Advisers” by PLANADVISER. This list honors the industry’s leading retirement plan advisors. Some advisors also received recognition in the “Under 40” or “Women Advisers” categories.

Earle Allen in New York, New York Dori Drayton in Grand Rapids, Michigan Devyn Duex in Santa Barbara, California Jean Duffy in Des Moines, Iowa Daniel Esch in Minneapolis, Minnesota Shaun Eskamani in Raleigh, North Carolina Tim Irvin in New York, New York Paul Owen in Birmingham, Alabama

Joey Payne in Lexington, Kentucky John Pickett in Dallas, Texas Jan Rezler in New York, New York Barry Schmitt in Richmond, Virginia Jason Stanicek in Raleigh, North Carolina James Strodel in Charlotte, North Carolina Michael Volo in Boston, Massachusetts Emily Wrightson in New York, New York

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CAPTRUST 4208 Six Forks Road, Suite 1700 Raleigh, NC 27609 captrust.com | 800.216.0645

Our nationwide team of more than 600 financial advisors offers a wide range of services for a considerable group of clients, from private investors and smallbusiness owners to retirement plan sponsors and nonprofit organizations.

No matter where you are, you’re never far from expert advice.

Julie Fuller, CPA, CFP® Senior Vice President, Financial Advisor West Des Moines, IA Michelle Mahoney, CFP® Senior Vice President, Financial Advisor West Des Moines, IA Jean Duffy, AIFA®, CPFA™ Senior Vice President, Financial Advisor West Des Moines, IA