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McClanahan: 'There's More to Money Than Just the Numbers'

Carolyn McClanahan on her shift from practicing medicine to financial planning, how to model health and long-term care costs, and troubleshooting financial risks later in life.

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Our guest for this week's installment of The Long View podcast sits at the busy intersection of healthcare and financial planning. Carolyn McClanahan was a practicing physician for a number of years, but after a frustrating search for a financial planner for her and her husband, she decided to study financial planning and earned the CFP designation. In 2004, she founded financial planning firm Life Planning Partners, and serves as the firm's director of financial planning. She also co-founded Whealthcare, a software program that identifies and troubleshoots age-related financial risks.

Carolyn strongly believes that individuals and financial advisors should think proactively about the implications of aging for healthcare and financial planning. She is also sought-after as a public speaker and a media expert on matters of aging, healthcare, and personal finances.

Show Notes The quest for real advice: How a "math nerd" found her way to medicine and eventually sought financial advice (1:12-3:32)

Frustrated: How disappointing experiences with financial advisors spurred Carolyn to pursue a career in financial planning (3:33-4:56)

"It worked beautifully": Why Carolyn decided to charge flat fees for her planning services instead of taking a percentage of client's assets (4:57-6:50)

"It's a lot harder": Carolyn explains why the flat-fee model isn't more commonplace, how they determine the right fee for each client, and why it makes economic sense (6:51-8:44)

An "ensemble model": How Carolyn built her practice and how she hones her focus (8:45-13:01)

A piece, not the whole pie: The role investments play in a client's financial plan (and how to avoid expectation gaps) (13:02-14:43)

The healthcare spending conundrum: "We spend so much money on end-stage healthcare that really doesn't help anybody." (14:44-17:39)

Heal thyself: "We're going to start seeing lawsuits from employees…about employers not being good purchasers of (health) insurance" (17:40-19:35)

Primary care as a public service: Carolyn's ideal healthcare system puts community health centers at its core (and removes primary care from insurance coverage) (19:36-22:35)

How to address the big-four "aging planning" issues: When to stop driving, when to move, when to get help with financial decisions, when to get help with healthcare decisions (22:36-26:02)

How to take the keys away: Addressing the issue of aging parents who shouldn't be driving anymore (26:03-28:08)

Bringing the family together: "90% of fraud and abuse is done by people close to you" (28:09-30:36)

"It's been a beautiful thing to use": How Carolyn employs "engagement standards" to align expectations and ensure clients commit to the plan (30:37-32:42)

Cognitive decline: "A client's biggest risk to their financial security is actually themselves" (32:43-34:33)

How to plan for healthcare spends: Live healthy, work as long as you can, reflect on how you use healthcare (34:34-37:52)

Whealthcare: A programmatic attempt to project and plan for healthcare costs (37:53-39:02)

A construct for long-term care planning: "People who are very healthy are going to have a longer long-term care need; people with dementia have an average long-term care need; if you're very unhealthy you don't have to worry about long-term care." (39:03-42:10)

Paying for long-term care: Carolyn suggests setting aside a "bucket" of money to self-fund long-term care, which avoids problems with acceptance into nursing facilities and complexity of long-term care insurance (42:11-45:20)

"There's more to money than just the numbers": Why hybrid long-term care insurance isn't usually a good answer, but sometimes piece of mind makes up for its opportunity costs (45:21-47:45)

How to avoid cognitive decline: It's not all hereditary, so learn as much as possible and live a healthy lifestyle (47:46-50:31)

Other ways to anticipate and manage cognitive decline: How a checklist helped a client determine he was suffering a series of mini-strokes (50:32-53:29)

References Caroyln McLanahan bio

About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver.

About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research in Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas.

To Share Feedback or a Guest Idea: Write us at TheLongView@morningstar.com

Previous Episodes

Episode 1: William Bernstein: 'I Don't Think the System Needs Nudges. It Needs Dynamite.'

Episode 2: Don Phillips: 'We're All in the Behavior-Modification Business'

Episode 3: Morgan Housel: 'No One Hires a Luck Manager'

Episode 4: Tim Buckley: 'There's No One Even Close to Us'

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About the Authors

Christine Benz

Director
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Christine Benz is director of personal finance and retirement planning for Morningstar, Inc. In that role, she focuses on retirement and portfolio planning for individual investors. She also co-hosts a podcast for Morningstar, The Long View, which features in-depth interviews with thought leaders in investing and personal finance.

Benz joined Morningstar in 1993. Before assuming her current role she served as a mutual fund analyst and headed up Morningstar’s team of fund researchers in the U.S. She also served as editor of Morningstar Mutual Funds and Morningstar FundInvestor.

She is a frequent public speaker and is widely quoted in the media, including The New York Times, The Wall Street Journal, Barron’s, CNBC, and PBS. In 2020, Barron’s named her to its inaugural list of the 100 most influential women in finance; she appeared on the 2021 list as well. In 2021, Barron’s named her as one of the 10 most influential women in wealth management.

She holds a bachelor’s degree in political science and Russian language from the University of Illinois at Urbana-Champaign.

Jeffrey Ptak

Chief Ratings Officer, Research
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Jeffrey Ptak, CFA, is chief ratings officer for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.

Before assuming his current role, Ptak was head of global manager research. Previously, he was president and chief investment officer of Morningstar Investment Services, Inc., an investment unit that provides managed portfolio services through fee-based, independent financial advisors, for six years. Ptak joined Morningstar in 2002 as a senior mutual fund analyst and has also served as director of exchange-traded fund analysis, editor of Morningstar ETFInvestor, and an equity analyst. He briefly left Morningstar to become an investment products analyst for William Blair & Company, and earlier in his career, he was a manager for Arthur Andersen.

Ptak also co-hosts The Long View podcast with Morningstar's director of personal finance and retirement planning, Christine Benz. A full episode list is available here: https://www.morningstar.com/podcasts/the-long-view. You can find him on social media at syouth1 (X/fka 'Twitter') and he's also active on LinkedIn.

Ptak holds a bachelor’s degree in accounting from the University of Wisconsin and the Chartered Financial Analyst® designation.

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