“You’ve got to tell your money what to do, or it will leave.” -Dave Ramsey
Your divorce probably landed you in a different financial situation than you had anticipated being in. We know that this is one of the most important topics to you, and that’s why we’re so glad Laurie Itkin is back to help you revisit your finances to make sure that you don’t outlive your money. On this episode, Laurie walks us through an 8-step course that she offers for women like you, and because she’s so Worthy, she included a special offer for our listeners to help you embrace your financial fresh start.
Here’s how you can find it… go to www.TheOptionsLady.com and click the link to the online course. The price of the course is $249 but if you enter WORTHY as the coupon code, you will get $50 off. AND you will get a 30-min one-on-one call with Laurie to ask questions about your personal situation.
You can now find a full transcript of this podcast episode at the bottom of our show notes! To read the latest episode of Divorce & Other Things go here.
On this week’s episode:
- Laurie Itkin – The Options Lady
- 8-Step Process: How Not to Outlive Your Money
- Figuring out your net worth after divorce
- Knowing what money you owe after divorce
- Calculate your net worth after divorce
- Figuring out what you spend each year
- Spending Plan after divorce
- Building a budget after divorce
- Forecast how much it will cost
- Determining when your income will stop
- Estimating your monthly social security benefits
- Determining how much additional income you need to cover living expenses in the future
- Planning investments for future income after divorce
- Outliving your money
- Readdressing personal finances after divorce
- Going from two incomes to one after divorce
- Divorce and finances
- Starting over after divorce, money
- Divorce Financial Advisor
- Finances after divorce
- 401k and divorce
- Financial problems after divorce
- Financial recovery after divorce
Audrey: 00:00 Welcome to Divorce & Other Things You Can Handle, a branded podcast from Worthy. I’m Audrey and I’m your host. You’ve got to tell your money what to do or it will leave. Your divorce probably landed you in a different financial situation than you had anticipated being in. We know that this is one of the most important topics to you, and that’s why we’re so glad Laurie Itkin is back to help you revisit your finances and to make sure that you don’t outlive your money.
On this episode, Laurie walks through an eight step course that she offers for women like you, and because she’s so worthy, she included a special offer for our listeners to help you embrace your financial fresh start. Go to www.theoptionslady.com, and click the link to the online course. The price of the course is $249, but if you enter Worthy as the coupon code, you’ll get $50 off, and you’ll get a 30 minute one-on-one call with Laurie herself to ask questions about your personal situation.
Divorce & Other Things You Can Handle is a weekly podcast, so make sure you subscribe to keep up with new episodes we’re curating to help empower and uplift you as you embrace your fresh start. This podcast is for you, so join our Facebook group, Worthy Women & Divorce, to let us know what you think and what you want to hear. You can also get more at worthy.com/podcast. We’re going to take a quick break and then we’ll be right back with Laurie.
Speaker 1: 01:27 When you sell a piece of jewelry, you can’t control how much it’s worth, but you can make sure that you’re selling smart with a team of experts and advocates behind you at Worthy. Your engagement ring could be a financial asset that allows you to embrace a new and fulfilling life after divorce. Let us help you get the best deal possible for the jewelry you’ve outgrown. Go to worthy.com/podcast to learn more.
Audrey: 01:53 I’m so excited to have one of my favorite guests back on. I think this woman is one of the smartest and most generous experts on money and how women can get smart about their money. If you don’t remember Laurie Itkin from the first time she was on the podcast, you’re really going to enjoy this episode because Laurie is the expert that you’re looking for. So welcome back to the podcast, Laurie.
Laurie Itkin: 02:20 Hi Audrey. Thank you for such a lovely introduction. I’m always happy to be here and talking with you.
Audrey: 02:27 Well, you know, I think maybe some of our listeners might remember that we did the Wealth Warriors quiz that was all about personal finance. That was actually a project that we worked really closely on with Laurie, and we had the white paper that sort of gave an overview of what the main concerns women have during divorce, so when it comes to money. It was a really amazing project and we’ve really enjoyed working together since.
So this episode that we’re actually going to be taking a little bit of a different direction, and I think one of the things that we’re seeing a lot from our audience, whether it’s in the Facebook group or different voices that were listening to that are talking about life after divorce, we’re seeing a lot of concerns about finance. I think the last time you were on we talked about sort of like short-term planning and figuring out the best way to reset your life, right?
Laurie Itkin: 03:21 Yeah, and this is going to be taking more of a planning approach to thinking longterm because both short and longterm is really important.
Audrey: 03:31 Right. One of the things that Laurie and I were talking about this before we started recording is that when you’re going through a divorce, there’s just so much going on and it can be so overwhelming. There’s so much that needs your attention right now, and you know whether it’s where you’re going to live or going back to work, there’s things that today need your attention, but it’s really important to be thinking longterm, and that’s what this whole episode is about.
Laurie, I think you probably mentioned you don’t want to outlive your money on the last episode because this is something that you’ve talked quite a lot about, and I think you’re one of the best people talking about it.
Laurie Itkin: 04:08 Thank you. Yeah, I mean how not to outlive your money is really the same thing as how not to run out of money. That may not really seem to make sense out of context, but let me put it in context. I get a lot of referrals, lawyers or mediators suggest women contact me either while they’re going through the divorce. I’m a certified divorce financial analyst, a CDFA, where I can help women figure out how should assets and debts be divided fairly? What about income for alimony? Some states call it maintenance or spousal support. Child support’s a big issue.
And so, I’m often involved helping women as they’re going through the divorce process. Basically trying to understand what is a fair settlement? But I’m also … people come to me after the divorce, once they’ve signed the papers, now what? Now they really may need the help of a financial advisor because if you’ve gone through a divorce and you’ve split assets, maybe you’ve split a retirement account in half, maybe somebody’s keeping the house, maybe you were bought out and you have cash sitting there, maybe there are debt, and you have income coming in. Maybe you’re working, maybe you’re not working. Maybe you’re receiving child support. Maybe you’re receiving alimony or maybe you are one of the women who is paying alimony. Now what do we do with all these money pieces? It is overwhelming, and that’s why I work with women on those issues.
Audrey: 05:49 Right. yeah. You know, I’m remembering the last time you were on, I kept making a big fuss about like, “If you’re feeling overwhelmed, don’t worry, this is going to be manageable,” and really taking that approach. I think, one of the things that we know that our audience really is engaging with, especially during this transition in their life is self-awareness and self-love. I think that finance can be really overwhelming, especially when it’s in the midst of a difficult change like a divorce.
But I think the steps that we’re going to talk about and the advice that Laurie has to offer is, I think really one of the best ways that you can embrace self-love, because we talk so much about getting you the deal you deserve, if we’re going to help you sell your ring, and bringing you the experts that you deserve. You deserve to be able to finance yourself and to be able to take care of yourself.
It’s something that you can do even if you feel like it’s very far away. You know, you’re amazing and you’re smart, and you’re capable. This episode is going to sort of give you a roadmap to being able to confidently continue with your life and age, and age, and age, and not run out of money.
Laurie Itkin: 07:00 That’s right. Well stated. I love it.
Audrey: 07:02 All right. So let’s talk a little bit about what these steps are. So is this part of a program? I mean, I guess our listeners might not know, you’re at optionslady.com, right?
Laurie Itkin: 07:16 Yeah, theoptionslady.com.
Audrey: 07:19 Theoptionslady.com, and we’ll link to this also at worthy.com/podcast, in case you don’t remember, but you remember where to find our podcast, we’ll make sure that we get you to Laurie. So Laurie, you offer a lot of different kinds of online stuff for people, right?
Laurie Itkin: 07:37 Right. I really want to be approachable wherever you are in the process, and whether you are have a lot of assets, whether you don’t have any assets, you really deserve to work with a financial advisor who’s going to help guide you and really make the most of what you have. And so, I’ve really tried to do that in so many ways. You know, I manage money for people, people with significant assets, but what I’ve also done is created an online course where anybody can go through it and learn this eight step process I’ve put together for how not to outlive your money.
Audrey: 08:17 Right? I think this is one of the coolest things because it’s so true that the more money you have, the easier it is to get help with this kind of thing. But you know, we hear from so many people who are struggling, and being able to engage with such a respected expert like you, it’s a real treat and it’s a privilege. I think your tips are so useful. Since the last episode we did together I’ve implemented so many things that I learned from you in my life.
Laurie Itkin: 08:46 Oh how wonderful. How wonderful.
Audrey: 08:48 Yeah. No, it’s good and it feels good to be in charge of your own stuff. So do you want to talk a little bit more about how you identified this particular program?
Laurie Itkin: 08:57 Sure. I mean, I’ll just give you a great example, and I might’ve mentioned this before on our last podcast, but I was approached by a woman after her divorce and she received a settlement from the divorce, literally $600,000 in cash. Okay? I mean, not in dollar bills but sitting in a checking account. She was 50ish, no children, but she didn’t want to work anymore. She was a massage therapist and just didn’t want to work, and she was not going to receive any alimony because she just got bought out basically like, that’s it,
Audrey: 09:34 Like a lump sum?
Laurie Itkin: 09:36 A lump sum. She thought, “$600,000. This is phenomenal. I don’t have to worry about anything.” I mean, that’s a lot of money. But I talked to her and I said, “You know what? If you do not want to work, that means you won’t be generating income. So you need this $600,000 to be invested so it generates monthly income for you.” That’s the basics of investing. If you’re not going to work for money, you need your money to work for you. You send that money overnight with a briefcase and it comes and pays you.
I teach this in the course. We have sections in the course about how that works, but the point is, is I did some modeling and I teach you, I show you through this course, tons of free online tools. Who doesn’t love free, right? So I’ve curated them all for you. We figured out that this $600,000, even if she lived frugally, would not last her till she’s 75 or 80, no way. She would have run out of money. So that’s why I put this course together. I want women to understand, not be afraid, but really face it head on and figure out what steps they can take now to improve their direction.
Audrey: 10:57 Right. Yeah, and you know, it’s interesting because I think … We were talking before about how so much of this is overwhelming, and I think this is one of the steps, sort of like figuring out how long your money needs to last, that’s so uncomfortable. It’s sort of kind of like guessing when you’re going to die. But I think it’s so true, you know people are living longer than they ever have before. You want to make sure that you’re going to be at a position to enjoy your life, and also take care of the people who you’re taking care of today. So I think you really have managed to take something that is sensitive and overwhelming for so many different reasons and turn it into something manageable. So if you’re ready, I think we should jump into these eight steps.
Laurie Itkin: 11:48 Let’s do it.
Audrey: 11:49 So where do we start, Laurie?
Laurie Itkin: 11:50 All right. So this online course is called, How Not to Outlive Your Money. What I’ve done, and hopefully Audrey will be able to attach the PDF to the link about the podcast. So this is something everybody can download and they’ll have a sort of a roadmap.
Audrey: 12:09 Yeah. You know what? We’ll make sure that we upload it to the Facebook group is a great place to find it. So if you’re listening and you’re not in the Facebook group, it’s called Worthy Women & Divorce. We’ll go ahead and let you on in and then you’ll be able to find it there. I’m sure that we’ll link to it in plenty of other places.
Laurie Itkin: 12:27 Okay. Terrific. All right. So let’s just dive right in. What do you need to do to not outlive your money, or put another way, what do you need to do to make sure your money lasts as long as you do?
Number one, everybody can do this first step. Okay?
Audrey: 12:47 Mm-hmm (affirmative).
Laurie Itkin: 12:48 It is, you simply write down what you own and what you owe. This is in financial terms we call this, a net worth statement. It sounds very fancy and complicated, it’s not. On one side you put what you own. Do you own a car? Do you own a house? Do you own a retirement plan? You add up how much money that is. Then on the other side, on the right side of the sheet, what do you owe? Do you have $8,000 worth of credit card debt? Do you have a mortgage on the house? Do you have a loan on your car? Is the car financed? You do this with everything you own and everything you owe, and you figure out, hopefully your assets are more than your debt. Then you’ve a positive net worth. If your assets are less than your debt, you’ve a negative net worth.
Audrey: 13:46 Let me ask you a question about how you figure out your net worth? Let’s say that you have monthly payments on your car, how do you calculate something that’s monthly? Do you do how much you have remaining?
Laurie Itkin: 13:59 Yeah. Yeah. So in this step you’re not looking at what your monthly payments are, you’re simply, I bought the car for $30,000 and I still have $20,000 left on the note. If I only owned one asset, that was a car, the car’s worth, the blue book value’s 30,000, and I owe 20,000 on the car, well 30,000, minus 20,000 is 10,000. So my net worth is $10,000. Because if I sold the car and now forget about, you know …
Audrey: 14:32 Oh you don’t need to talk about resell value with us, we know.
Laurie Itkin: 14:36 Right. Right, with jewelry, you know. So a lot of times people have staggering student loan debt. So you know, early on when you were a student and you took out student loans, you may have a negative net worth because you may not own anything. You may rent. You have $80,000 in student loans, but today’s snapshot isn’t that important whether you have a positive-
Laurie Itkin: 15:00 Today’s snapshot isn’t that important whether you have a positive net worth or negative net worth. What I suggest people do is twice a year they do this exercise, and over the years, if you see your net worth is growing that’s a great sign you’re not going to run out of money. If you see your net worth shrinking you’re going to run out of money.
Audrey: 15:21 That must be very reassuring for people who they do owe money here, and there, and it’s not so much about where things stand right now, it’s about seeing how things are going to be trending, and being able to take that long term view of when is this going to be done? When is this going to be paid off? When is this going to mature? Being able to take that long look at what is coming because this all about preparing for the future.
I don’t know if we mentioned, but it’s especially important for a woman who she planned for her future, and things are not as she planned. That’s usually what happens. I don’t think people get married to get divorced, and so already you’re on a different plan, and so you need to take this moment to evaluate what’s going on, so that you can set yourself up for the success that’s worthy of you.
Laurie Itkin: 16:20 Right. What you did is you already went through this exercise when you went through the divorce because in most states, not always there’s different cases, but in most states you and your spouse are supposed to do this exercise to show everything you own, and everything you owe. Then, they’re split. You split assets, you split debt, so you might already be familiar with this exercise if you’ve gone through a divorce. Now, you just have to do it looking at your own assets, and your own debt.
Audrey: 16:56 Now, you’ve got this idea of where your net worth is today, and if you’re going to be doing this long term you’ll be able to start seeing whether it’s increasing or decreasing. Then what do you do?
Laurie Itkin: 17:13 You have that piece done, and you’ll revisit that. Then, the second step for how not to outlive your money is you have to acknowledge how much it costs you to live each year. What does that mean, acknowledging how much it costs you to live each year?
Here’s a great example. A checking account, your money’s coming into the checking account, your money’s going out of the checking account. Does it cost you $3000 a month to live lives? Does it cost you $4000 a month to live? Some people call it a budget, some people call it a spending plan, but you need to know what your run rate is every month.
Again, if you went through a divorce you probably had some sort of disclosure of what your expenses are, but your expenses change dramatically when you get a divorce because now instead of having one household there are two homes, two residences, spouse in one, you in one, so it may cost more to live as a single person than it did as two people sharing expenses. It’s a great idea to just go into your checking account, every bank has an online application, and just figure out how much is my rent, or my mortgage? How much am I paying off my student loans every month? How much is my car? Just know how much money do you need to generate a month to pay to live? It’s a simple concept, it really is, but it’s hard to figure that out.
Audrey: 18:53 I think it goes back to what we were saying before about really being able to, if you’re at this moment in your life where you’re really embracing your fresh start, and you’re saying, “I’m going to build a different life for myself than what I had before, and taking advantage of all of the freedoms that you have, part of that is having this awareness of what it costs to be you today. While it might be exhausting, and probably a little scary to go in and see those numbers it’s important, and it serves you very well.
Laurie Itkin: 19:29 Yeah. There’s free applications, I teach this in the online course, mint.com is one of them where you just link your bank accounts together, and it tells you what you spend every month on gas, it tells you what you spend on groceries, restaurants. Here’s the kicker, if you’re spending on average $6000 a month, but you’re only getting a salary of X, and you’re getting child support of Y, and you’re getting alimony of Z, and all that is less than $6000 a month, you know what’s going to happen? Your net worth is going to go down every year, and you’re going to be deeper and deeper in debt. This is a great exercise to make sure that you’re living within your means, and maybe you have more money coming in than you’re spending, and maybe that means that you can be living a little better. Maybe you could spend a little more, but you need to know where you are today.
Audrey: 20:28 I think the last time you were on we talked a lot about living beneath your means, that’s the secret to getting rich right?
Laurie Itkin: 20:35 That’s right.
Audrey: 20:37 I’m still working on it. Should we move onto step three?
Laurie Itkin: 20:44 Step three is forecasting how much it will cost you to live in the future.
Audrey: 20:50 This is so hard. What do you need to keep in mind when you’re doing that?
Laurie Itkin: 20:56 If you know how much it costs you today, and you have to factor in inflation, and again there’s online tools that do this for you. Look, it’s an online course, it’s an affordable online course. This isn’t going to be as good as you working with a full-service financial planner, but you’re going to get some estimates on your own, so you need to start thinking about inflation. For instance, when I was little, because I’m 50 years old today, when I was little, when I was 10 or 12 and I would get an allowance I remember I could buy a candy bar for 25 cents. I don’t know how much a candy bar is now, does anyone know? Do you know?
Audrey: 20:56 I don’t know.
Laurie Itkin: 21:43 Let’s just be honest, it’s probably not 25 cents right now. I remember things just didn’t the cost as much. You could go out to lunch and get a sandwich for 5 bucks. I don’t know anyone who sells a sandwich for 5 bucks anymore unless I make it myself. If you are spending $5000 a month now I can show you tools to estimate how much you will spend 20 years from now by buying the same stuff. If you buy the same stuff today that you do 20 years from now it’s not going to cost you 5000 a month, it could cost you 7, or 8, or 9000 a month, so you got to factor that in. We don’t need to spend too much time on this one because this is really an intangible, but I just want to get people thinking.
Audrey: 22:30 You mean if you’re planning ahead, and you’re being conservative, and safe with your money then it’s something that you definitely need to keep in mind.
Laurie Itkin: 22:40 Yeah, just things will cost more in the future, so you’re going to need more money in the future than you need today to have the same standard of living. Let me repeat that one more time. You need to be getting more monthly income in the future than you are now in order to maintain the same standard of living you have today.
Audrey: 22:58 That can probably feel like a pretty impossible task for people listening, but it’s not, and I think we should take a quick break Laurie, and when we come back we’re going to get people right back on track, and get everybody feeling optimistic about the future. Even if we can’t predict it, right?
Laurie Itkin: 23:16 That’s right.
Audrey: 23:17 We’ll be right back.
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We are back with Laurie Itkin, and Laurie is giving us all of the tips that we need to make sure that we are going to have the money that we need to sustain the life that we deserve. Lori, we’re going through the eight steps of how not to outlive your money, and we are just getting to step four, so what is step four?
Laurie Itkin: 24:18 Step four is so important, and I really encourage everyone listening to think about it. Step four is for you to determine when you will no longer be earning income. If you are working today, you have a job I really doubt there’s many jobs that you can continue to do when you’re 70, 80, or 90. I was just talking to a woman yesterday, she’s getting a divorce, and she’s a special education teacher, and she’s working with autistic children and children that have very high needs. Need a lot of her attention, and she’s in her mid-50s, and she’s already burned out.
Audrey: 25:04 That’s emotionally and physically exhausting work.
Laurie Itkin: 25:07 Yes, but I really respect what she does. I love teachers.
Audrey: 25:13 Oh, absolutely. It speaks so much to what you were saying though about how you need to be realistic about how long you’re going to be able to provide for yourself in the same ways that you are. Your abilities are not going to say the same forever.
Laurie Itkin: 25:30 You’ve got to remember a lot of women are referred to me who work with me after the divorce, they’ve been stay-at-home moms for a very long time, and they may not be able to, depending on their age, get a job and generate income. If they have younger children they may be receiving child support and, also depending on the state in which they live and depending on their ex-spouse’s financial situation, they may be receiving alimony, in California it’s called spousal support, in some other states it’s called maintenance. I think most people understand the term alimony.
Alimony is rarely forever. Alimony may have an end date, and certainly child support, when your child’s over 18 in most states child support stops. There are exceptions, but you’re certainly not going to get child support for a 30-year-old child. One of the most important lessons in the online course because I show you how to really budget for when these income sources dry up, if you will. You’ve already, in step two, figured out how much it costs you to live each year, so you need to think about what year will child or child support, or spousal support not continue. You won’t be receiving that income, and then you have an income gap.
Audrey: 26:57 This is, I think, one of the big challenges for our community is right now when you’re thinking about alimony, or child support I think for most of our listeners who are either in the beginning, or in the middle, or shortly after the beginning of their divorce they are thinking about today so much. It’s really important to be thinking long-term. These are things that, as you said, it’s not going to last forever, and you don’t want to be dependent on it more than your dependent on yourself, and being able to identify your own ability to move forward, and see how things are going to end up for you, and know when those checks are going to stop, and being able to take care of yourself is a really amazing thing. I think, you said this is such an important step, and I think you’re such an important voice walking people through this step because it’s tough. It’s tough when it’s happening, and it’s tough to think about how it’s going to be in several years from now too.
Laurie Itkin: 28:05 It also can be a positive because there are plenty of women who are paying support to their ex-spouses. I work with same-sex couples and one of them is going to be paying the other person, and so this is a positive that if you imagine that you’re on the side where you’re paying your ex-spouse well, there’ll be a day where you no longer have to cut those checks, and this is going to be a windfall for you, and you can be investing that money for your future. It’s also a positive depending on what side of the fence you sit.
Audrey: 28:36 You’re right.
Laurie Itkin: 28:40 If you have student loans, let’s say, in the future you might have paid off your student loans, so there’s a windfall in your buzz budget. It’s just thinking about the now and in the future.
Here’s where we get back to why if, let’s say, in your divorce settlement you receive $100,000 in retirement assets, those are yours. If you start investing those now, and we’ll get to this later, but that really segues into the next step.
Audrey: 29:14 Should we step up to five?
Laurie Itkin: 29:17 Let’s step up to five. This is something everyone can do. Here’s a real easy step. See, I have some hard steps and some easy steps. The easy step is to estimate your monthly Social Security benefit. This is for people who live in the US. Canada has a different system, but you literally just go to ssa.gov, that’s the socialsecurityadministration.gov, ssa.gov. You put in some information, and it will spit out your estimated Social Security benefits if you retire at age 62, at age 67, at age 70, and those are the ages that are for people my age, but they will change based on if you’re younger or older than I-
Laurie Itkin: 30:00 But they will change, based on if you’re younger or older than I am.
Audrey: 30:04 Mm-hmm (affirmative).
Laurie Itkin: 30:05 And it can tell you. So, like for me, I just did it yesterday just to check. And I know, for me, that if I continue working until I’m 67, getting the same income I make now. And remember, my income could go up or down.
Audrey: 30:21 Mm-hmm (affirmative).
Laurie Itkin: 30:22 I know that if I continue working at the same income I’m making now, when I’m 67, I will get not quite $ 3,000 a month in Social Security benefits. Okay.
Audrey: 30:34 Okay.
Laurie Itkin: 30:35 That’ll be 3,000 a month in today’s dollars. So I might actually get more than that because of inflation. But at least it allows me to think, “Wow, I will get similar to $3,000 a year.”
Audrey: 30:49 Right.
Laurie Itkin: 30:50 Okay, so anyone can do this. You go on there, and if you’ve been a stay-at-home mom, or you haven’t had much time in the workforce, if you’ve been married for at least 10 years, there is a good possibility that you can get half of your ex-spouse’s Social Security benefits.
Audrey: 31:08 Wow.
Laurie Itkin: 31:08 Well, not quite wow. Because let’s say you’re married to me and I’m getting almost 3,000 a month. Well, then you know that the max you’ll get is 1,500 a month, which really is, that’s not much money.
Audrey: 31:21 Right, right.
Laurie Itkin: 31:22 Okay. Many people think, “Oh, when I retire, I’ll get Social Security. I’ll live off Social Security.” Social Security, that’s like a joke. I mean, especially if you live in a high-cost city or area.
Audrey: 31:34 Right.
Laurie Itkin: 31:35 I can’t live on 3,000 a month and it’s taxable.
Audrey: 31:38 Wow.
Laurie Itkin: 31:39 I have to pay tax on that. So, I mean, this is a joke. So don’t … I’m teaching … This is like if you take anything away from this module, you’re going to go in there, you’re going to see what your Social Security benefit is. And it’s going to be like, it helps you budget, think for the future.
Audrey: 31:53 Yeah, it’s a significant piece. But it’s a, you have to think of it as the piece. You can’t think of it as your solution. It’s a piece of your future. Okay.
Laurie Itkin: 32:02 So once you know that, and everybody can do this. It like is so easy. It just takes you a few minutes to log on, SSA.gov. Like if you take anything away from this whole podcast, know how to figure out what you’re going to get in Social Security, okay.
Audrey: 32:18 Yeah.
Laurie Itkin: 32:19 And I have some other tips. Okay, so stay tuned. All right. So now step number six is, you need to determine how much additional income you’re going to need to cover your living expenses. So if I know I’m only going to get 3,000 a month, but I know it costs me 5,000 a month to live-
Audrey: 32:38 Right.
Laurie Itkin: 32:39 How much extra income do I need?
Audrey: 32:41 Mm-hmm (affirmative).
Laurie Itkin: 32:42 And these are guesses and I have the online tools that show you how to do this. These are guesses, but you’ve got to start thinking now, “How much income I’m going to need in the future?”
Audrey: 32:54 Right.
Laurie Itkin: 32:54 And you won’t be perfect. You won’t be right, but it’s going to get you in that mindset of thinking.
Audrey: 32:59 Yeah, and that goes back to that self-awareness piece. Of just sort of, it can be so easy. Sometimes money is almost like junk food. Like it’s easier not to pay attention, but you’re going to feel better, and you’re going to be in a better spot if you pay a little bit of attention.
Laurie Itkin: 33:16 That’s a great analogy. Great analogy. Okay. So now we have number seven, and this is, I have a lot of online tools for this. Number seven, calculate how much you will need to have saved to cover the gap. So basically, if I know 20 years from now I’ve got to have something because I’m going to get Social Security, but I need a machine to generate income for me. Like I’ll need another two or 3,000 a month. Well, where’s that income going to come for? I mean, no more child support-
Audrey: 33:48 Right.
Laurie Itkin: 33:48 No more alimony. Can’t work because like I’m old. I mean, maybe I can work, but I can’t …
Audrey: 33:54 Yeah, you don’t have as much steam as you did when you were 50.
Laurie Itkin: 33:57 Right. And I want to be able to retire.
Audrey: 34:00 Right.
Laurie Itkin: 34:00 So where am I going to get that monthly income? This is exactly why if you have a pot of money now, like that woman, who came to me with $600,000. If she had invested that money, and I think we should remind listeners, that for Worthy, I did a three-part blog series on Investing 101.
Audrey: 34:22 Yeah.
Laurie Itkin: 34:22 It’s a great place to start if you have no idea what the heck I’m talking about. Take 10 minutes and read Investing 101.
Audrey: 34:29 We’ll link to part one.
Laurie Itkin: 34:29 Okay.
Audrey: 34:30 And part one links to part two, and part two links to part three. So we’ll make sure that that’s available to listeners, too, at worthy.com/podcast.
Laurie Itkin: 34:40 Great. So if you start investing money now, whether you’re using stocks, or bonds, or any other mutual funds, exchange Freedom funds. I explain all this stuff. Then that is going to be able to pay you income. So like I know already right now, I know I’ve saved so much in my retirement accounts that I’m not going to have a problem.
So let’s just say I have … We’ll make it up. Let’s say I have a million dollars and I need that to generate income. I’ve got a million dollars saved. “Oh, I’ve been working. I listen to this podcast. I’ve started saving, and saving, and build this nest egg.”
Audrey: 35:18 Yeah.
Laurie Itkin: 35:19 “If I have a million dollars and I invest it in bonds and stocks that pay dividends, and if I can generate a four percent yield off that, that’s $40,000 a year that I can take out, help me supplement Social Security, and not have to spend down that principle. So I can have that million dollars just sustaining itself, paying me rent.”
Sort of like if you own a rental property and you rent it out for income, these renters are paying you a month. Your investment income can be paying you monthly.
Audrey: 35:56 Okay, your Social Security is still a part of what’s going on, but it’s an appropriately smaller part of what’s going on.
Laurie Itkin: 36:04 Right, because you’ve worked and you’ve saved for retirement. That’s what everyone says, “Save for retirement. How much should I put away? I’m working, how much should I put on my 401(k)? How much should I save, I’m self-employed? How much should I put in a SEP IRA?”
Well, the reason why you want to save a little bit of your income every month, or every quarter, every year, is you want to build a pot of money that’s going to be able to be invested and generate investment income for you to spend when you no longer have other income coming in.
Audrey: 36:36 And so that’s the eighth step, right?
Laurie Itkin: 36:39 That’s the eighth step. You generate investment income to help cover your living expenses.
Audrey: 36:45 And so, Laurie, maybe you can tell us a little bit about some of the clients that you’ve worked with. I mean, where would you say people generally are in their life, when they’re really starting to take these eight steps, and sort of look at this picture?
Laurie Itkin: 37:00 So that’s a great question. So with the online course, I’m allowing people to sort of do this on their own at a very affordable rate. When they work with me, as a Wealth Manager, I am doing all these steps with them, hand-in-hand.
And so a typical situation will happen, where either I’ve helped the woman through her divorce, helping her negotiate. We’ve done some of this analysis to figure out what she needs.
And then after the divorce, I will work with her to help her establish a budget. Step number two, how much does it cost her to live each year?
Audrey: 37:38 Right.
Laurie Itkin: 37:38 We figured that out together. Then she may have some investments from the settlement. Maybe she has a $100,000 in a brokerage account. Maybe she has $300,000 in a retirement account. We work together to invest that money now.
Audrey: 37:55 Right.
Laurie Itkin: 37:55 So that it’s growing for the future. But a lot of the women that work with me are anywhere, I’d say my sweet spot is anywhere from their late-30s to their early-60s. That’s where most of my clients fall in age.
Audrey: 38:09 And for people who are listening, I mean, is this something that maybe our listeners want to talk to their kids that are starting to, they’re beginning their careers, and they’ve got their student loans? I mean, when is a good time to start looking at this sort of long-term planning?
Laurie Itkin: 38:25 Well, I do a lot of this kind of planning with recently-married couples. Couples in their 30s love to come and meet with me because they may want to be saving for a down payment for a house. But they also might want to have children and they’re trying to figure that out. Or, a lot of young couples, when they’ve had small kids, they want to start a college savings plan.
Audrey: 38:48 Right.
Laurie Itkin: 38:49 So, really, I mean, financial planning happens throughout your life. And there’s just ways to have that help, no matter how old you are. And what stage of life you’re in.
Audrey: 39:00 Well, I think that’s great. And I think we talk a lot about female empowerment on this podcast, and I think that empowering people by helping them become financially literate, and to take control of their own financial situation, and help them feel confident with what’s going on, it’s an amazing thing that you’re doing.
And we’re so glad that we get to be a little part of it, and to have you come talk to our community, and give them tips that will help them embrace their fresh start, and create the bright future that they really deserve.
Laurie Itkin: 39:34 Well, I love being involved in the Worthy community. It’s just been terrific, and I always encourage folks to read the Worthy blog. There’s articles-
Audrey: 39:34 Thank you.
Laurie Itkin: 39:44 I’m one of the contributors.
Audrey: 39:47 Yeah.
Laurie Itkin: 39:47 I write about finance, but we have authors writing about everything. And it’s just such a rich source.
Audrey: 39:54 Here’s a nice spoiler alert for you. We get the pitches before we get the articles, and we were pitched an article about your post-divorce libido. So we’re really excited.
Laurie Itkin: 40:10 That’s going to be a good one.
Audrey: 40:11 Yeah, it’s a nice range of topics. And finance is exciting, too, Laurie.
Laurie Itkin: 40:17 Not quite as, but whatever. Hey, it gets me excited.
Audrey: 40:22 Well, we are excited about it, too. And we’re excited about all of the ways that you’re helping women take control of their futures. And I want to thank you so much for joining me on this episode. It’s always such a treat to have you.
Laurie Itkin: 40:34 Well, let’s end with this. I’d love to let folks know how they can get in contact with me.
Audrey: 40:34 Absolutely.
Laurie Itkin: 40:40 The best way is to go to my website, theoptionslady.com, theoptionslady.com. And if you’re interested in learning more about the online course and this eight-step process, there’s a link on the website to that. And the price of the course is normally $249, but if you put in the coupon code Worthy, you get $50 off, and you also-
Audrey: 41:09 All right.
Laurie Itkin: 41:09 Get a 30-minute call with me, that you can schedule anytime as you’re going through the course, either before the course, anytime in the middle of the course, or after the course, if you want a little bit of personalized assistance.
Audrey: 41:21 Thank you, Laurie. That’s great. I’m sure that our listeners are going to be hitting you up and learning even more from you. So thank you so much for being a part of our Worthy community. And we look forward to having you back soon.
Laurie Itkin: 41:36 Great. Thanks for having me, Audrey.
Audrey: 41:39 Thanks again to Laurie for joining us and to all of you for listening. Before this episode ends, we wanted to remind you guys to join our Facebook group, Worthy Women and Divorce. We are so blown away by the conversations going on in this group, and we want to make sure that you’re a part of what’s shaping the topics we feature here.
In fact, this week, we ask you to pick between an episode on finance and an episode on co-parenting. Well, you can guess which one won. But don’t worry, co-parenting is next week and it’s a really good episode.
The Facebook group is a great way to interact with our blog and learn more about our platform. So we hope to see you there soon. Make sure you subscribe so you can catch every new episode of Divorce and Other Things You Can Handle in your feed weekly. If you like what you hear, rate and review us to help other women like you, find us.
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