Ric Edelman was three times ranked the #1 independent advisor in the nation by Barron’s1 Edelman Financial Engines is ranked the #1 independent investment advisory firm in the nation by Barron’s2

Ric Edelman’s Inside Personal Finance JUNE 30, 2020 RicEdelman.com 1

A Crime That Can Go Undetected for Years Your children or grandchildren are the targets. Here’s how you can help protect them. You know you have to protect your identity from thieves. Did you ever consider your child’s identity? Children are issued Social Security numbers (SSNs) shortly after birth. If a thief obtains it, they can open lines of credit, apply for government benefits, buy homes and cars, and obtain fake driver’s licenses. Just imagine receiving a notice that your 3-year-old’s overdue account at a department store or online retailer is going into collection! This kind of theft is especially worrisome because parents often don’t learn about it until years later — typically, when the child applies for a college loan, applies for their first job or tries to buy a car. Here are four warning signs that your child’s or grandchild’s identity may have been compromised:

1. The child has a credit report. (Most children under 18 don’t have one unless their parent has named them as an authorized user on a credit card.)

2. You or the child are turned down for government benefits because they are being paid

to another account with the child’s SSN.

3. You get collection calls or bills for products or services you didn’t order.

4. The IRS notifies you (in writing — never by phone) that a child didn’t pay income taxes or that their SSN was used on a tax return.

Here are five ways you can help protect your child’s or grandchild’s personal information:

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1. Ask the national credit bureaus (Experian, Equifax and TransUnion) to create a credit

report for the child and then immediately put a freeze on it. You can do this at no cost.

2. Get a free credit report annually from each bureau at annualcreditreport.com. Stagger them a few months apart so less time passes between reviews.

3. Never give the child’s SSN to anyone. Instead, use another identifier — or just the last

four digits of their SSN.

4. Place all records containing the child’s personal information in a secure location.

5. Shred all documents containing the child’s information before throwing them away. Don’t assume the child’s SSN is safe just because it isn’t being used. If you have grandchildren, share this article with their parents, as well as others family and friends who have children.

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Job-Hunting in the ‘New Normal’? Here’s the one interview question you need to be prepared to answer. With a record 45 million Americans unemployed due to the pandemic, getting a new job is a tremendous challenge. Being out of work is not a stigma; everyone knows that the virus is to blame, not your prior job performance. The interview is your primary opportunity to sell yourself. Hiring managers say they are no longer interested in hearing about your ability to be a “team player” or a “strategic thinker.” Instead, they’re seeking candidates who are well-rounded and able to adapt. So instead of preparing for the usual “tell me about yourself” question, be ready to answer, “What have you been working on?” Hiring managers say they’re not terribly interested in the projects you’ve been involved in. Instead, they are seeking evidence that you’ve been proactive during your unemployment and want to see if you’ve handled the stress well. Both are indicators that you can bring value to the organization. During the interview, talk about how you’ve been using your time off productively, such as by taking online courses to keep your skills sharp or volunteering in your community. Even home schooling the kids and grandkids shows productive use of time — compared to binge-watching some TV series on Netflix. Have you learned anything new during the pandemic? And, what have you learned about yourself? If you want to talk about your next career move, call your Edelman Financial Engines advisor. We can help you plan for your career. And when you get a job offer, we can help you maximize your company benefits.

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Video: Should You Increase Contributions to Your Retirement Plan? You can use your paycheck withholding at work to take advantage of low prices in the stock market. Ric explains how to apply this strategy.

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Good Fortune Q: I’m 67. I’ve had a long career and I’ve worked in different ways for communities and so on. When I think about what I want to leave my children and what I stand for, one of the big issues is helping them to connect socially conscious storytelling and life values. I’m secure financially — I was a teacher. My wife and I both have pensions and Social Security, so for me the issues become how much money can I give to others, how do I take care of my family, and how do I invest into socially conscious industries or investment funds? You have the opportunity to focus your good fortune on family and community — that’s wonderful. Begin exactly the way you have: by recognizing what matters to you. What causes and issues are you passionate about? You don't need me or any other financial advisor to tell you where you should be donating your money. What you need from your financial advisor are simple strategies to help you donate to the causes that matter to you in the most efficient, effective way so your gifts have the greatest impact. Jean and I learned the hard way that it’s awful when you give money to an organization and then discover that the money is squandered, misspent or spent in a manner that doesn’t produce the impact you were hoping to see. So, due diligence is required. You must evaluate charities with as much ruthlessness as you evaluate investments. You must verify that the charity you’re considering is worthwhile, that it is operating itself properly, and that most of the money it raises is used for direct services (and not overhead or administrative costs). You want to make sure the organization runs honorably and efficiently — and that its activities or behavior (or that of its executives or other donors) won’t generate embarrassing headlines. Additional questions arise:

• When should you give? • Should you donate money in a lump sum or provide it via annual gifts? • Should you give cash or property, such as securities or real estate? • Should you make a bequest so that they receive money upon your death? • Should you buy a life insurance policy, naming them the beneficiary? • Should you establish a charitable remainder trust or charitable lead trust?

As you can see, giving money away can get complicated. That’s why I often joke that money doesn’t solve problems — it just creates new ones!

Q

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The idea of giving money to family members creates questions too. Will the money improve the heirs’ lives — or ruin them? We’ve all heard of “rags-to-riches-to-rags in three generations” and the internet is rife with stories of children of wealthy people who become addicts, suffer bad marriages and worse. These unintended consequences could actually harm the people you love most. Therefore, you must evaluate each potential heir’s ability to receive and manage their inheritance — psychologically, emotionally, behaviorally and situationally. All this might mean that you don’t treat each heir the same. They are of different ages, temperaments and circumstances (financial, marital and health to name a few). So, you might give more money to some than to others. You might appoint trustees for money earmarked for some but not others. You might provide lump sums to some but monthly allowances to others. You might delay distribution of money to some — or disinherit them completely. And you must consider how all of this could affect their future relationships with each other. One story serves to illustrate this. A father supported his adult son, a spendthrift who couldn’t hold a job. The son was financially dependent on his father, and the father was fed up. So, he disinherited the son; in his will, he left everything to his daughter, the son’s older sister. After the father’s death, the daughter inherited $600,000. The son approached his sister and said, “Dad left me nothing. He gave it all to you. So now, you must take care of me like he did.” Oh, my. So, here’s how to proceed: First, identify if you have resources you don't need and which you’d like to make available to others. Next, identify the causes that matter to you. Third, determine how you can best distribute your money to those causes so that you generate the impact you seek. A financial advisor can be of tremendous value to you in navigating all three stages of this process, while helping you anticipate (and avoid) unintended side effects. One warning: As soon as you start giving money away, you’ll get bombarded by charities, politicians, family, friends and even strangers — all of whom want some. So, decide now how you will respond to those requests.

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Forbearance Q: I have listened to your show for many years. I know you have addressed mortgage forbearance during the crisis. The CARES Act says folks can get up to six months forbearance, with the possibility to revisit and extend an additional six months. My concern is that by jumping on the forbearance bus, many people will lose their homes. Are you aware of pending legislation that may avoid this, or is there another alternative I’m not aware of? You’re right: The coronavirus relief bill says those with federally backed mortgages can go into forbearance — meaning, you can stop payments for up to a year if you’ve experienced a hardship due to Covid-19 — but the law is silent on how and when those missed payments must be repaid. Many lenders are demanding that you repay in the 13th month, but that’s just silly: If you couldn’t pay monthly for a year, how do they expect you to pay a full years’ worth of mortgage payments in a single month? Many want the missed payments to be tacked onto the end of the mortgage, meaning your 30-year mortgage would now end in 31 years, since you’re skipping this year’s payments. Others want the payments waived — forcing the lender to eat the loss or having the government (read: taxpayers) pay the tab. It is unresolved as yet; we’ll have to wait for clarification from Congress and the states. That said, Fannie Mae and Freddie Mac have provided options to lenders for the mortgages they back as to how individuals could repay the money owed once the forbearance period expires. They do not require repayments to be made in a lump sum. Individual lenders might also craft their own policies.

Q

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Audio: We Need to Talk About the Economy

Sports stadiums, arenas, hotels and rental cars are sitting idle. Listen to Ric reveal the true impact of the pandemic and what it means for your money.

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Ric Edelman’s Inside Personal Finance JUNE 30, 2020 RicEdelman.com 9

Quick Tips

Have Your Auto Insurance Premiums Unexpectedly Gone Up? If so, get a C.L.U.E.

Most of us are driving a lot less these days. As a result, many auto insurance carriers are sending refunds to policyholders. If you haven’t gotten one, call your insurer and ask why. You should also look for errors in your C.L.U.E. report. That’s a database operated by LexisNexis Risk Solutions. More than 99 percent of auto insurance carriers send it claims data — including who was at fault for an accident. Information in the database affects how auto carriers calculate your insurance premiums. That’s why you should periodically get a copy of your C.L.U.E. report from your insurance carrier or the LexisNexis Risk Solutions Consumer Center, at P.O. Box 105108, Atlanta, GA 30348-5108. If you find an error, request a correction in writing, and send it via Registered Mail, Return Receipt Requested. Write to your insurer and LexisNexis. The Fair Credit Reporting Act requires LexisNexis to investigate; the error must be deleted within 30 days of receiving your letter. If problems persist, contact your state’s insurance regulator. Call your Edelman Financial Engines advisor too. Perhaps we can help.

Ric Edelman’s Inside Personal Finance JUNE 30, 2020 RicEdelman.com 10

Singularity

New Tech Could Help Blind People See

Stimulating specific areas of the brain can mimic our natural ability to see.

Researchers at the Baylor College of Medicine say they have found a way to give people with visual impairments a semblance of sight by implanting a visual prosthesis onto the brain. Algorithms then stimulate electrodes that let patients “see” figures such as alphabetical letters. The scientists plan to partner with neuroengineers to develop arrays featuring thousands of electrodes, allowing more precise stimulation of the brain. Eventually, they believe, those who cannot see will be able to obtain useful visual information.

Other Developments in Technology

• Singapore is testing a wearable device to help with coronavirus contact tracing. The device is not dependent on smartphones; it can be kept in a handbag or worn on a lanyard.

• Germany will require gas stations to install electric car charging stations. The

government is also subsidizing the purchase of electric vehicles and increasing taxes on purchases of vehicles that use internal combustion engines.

• Researchers at Virginia Commonwealth University have designed a fingernail-sized polymer patch that could deliver a coronavirus vaccine. The patch can be mailed, minimizing human involvement in getting people vaccinated.

• Scientists in Singapore have produced a generator that powers small electronics by exploiting the contrast between light and dark. The greater the contrast, the more energy the generator provides.

• One impediment to establishing a space station on the moon is the cost of transporting

heavy building materials there. Chemists in Norway may have the solution: They’ve produced a lightweight cement from faux lunar soil. If the technology transfers to real lunar materials, future astronauts could make buildings from moon dust.

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You Be the Judge

A bartender at a high-end Manhattan restaurant claimed deductions of more than $30,000 on his federal income tax return for high-quality clothing he wore at work and the cost of cleaning it. His employer didn’t require him to wear a distinct uniform but did ask employees to dress in all-black clothing. The bartender said he bought expensive clothing because he often worked in the front of the restaurant greeting patrons and wanted to make sure he represented its posh image. The IRS disallowed the deduction, and he appealed to the U.S. Tax Court. What did the court decide?

The Verdict

The judge ruled that it was irrelevant that the bartender’s employer wanted workers to wear all black or that he felt it necessary to buy high-quality clothes because he worked in a high-visibility position. The clothing could be worn outside his workplace, so the cost is a nondeductible personal expense.

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1 Rankings for 2009, 2010 and 2012. Barron’s ranking has three major components: assets managed, revenue produced and quality of the advisor’s practice; it does not assess investment returns. Quality-of-practice component includes advisor regulatory record. Ranking is based on universe of applications submitted through self-nomination to Barron’s. 2 The 2019 Top 50 Independent Advisory Firm Ranking issued by Barron’s is qualitative and quantitative, including assets managed, the size and experience of teams, and the regulatory records of the advisors and firms. Firms elect to participate but do not pay to be included in the ranking. Investor experience and returns are not considered. The 2018 ranking refers to Edelman Financial Services, LLC, which combined its advisory business in its entirety with Financial Engines Advisors L.L.C. (FEA) in November 2018. For the same survey, FEA received a precombination ranking of 12th. Barron’s Hall of Fame advisers have been ranked for 10 or more years on the Barron’s Top 100 Financial Advisors list. Barron’s listings are based on data compiled by many of the nation’s most productive advisers, which has been submitted to and judged by Barron‘s. Key factors and criteria for each award include assets under management, revenue produced for the firm, regulatory and compliance record, and years of professional experience. This award is not indicative of this advisor‘s future performance. All information provided through Inside Personal Finance is for educational purposes only and does not constitute investment, legal or tax advice, an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice. Videos presented on this website are for educational purposes only and do not constitute investment advice or an offer to buy or sell any security or insurance product. © 2020 Edelman Financial Engines, LLC. Edelman Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor and wholly owned subsidiary of Edelman Financial Engines, LLC. Results are not guaranteed. AM1223781.