Photo of Shane O'Hara, CFP® Shane O'Hara, CFP® Feb 16, 2022


Over the past few years, we have seen the residential real estate market explode due to high demand and low supply. Homebuilders just can’t build new homes fast enough. So as a result, the following factoid may come as a surprise. According to ATTOM Data Solutions in Irvine, CA, the median (half below and half above) age of a home sold in the first three quarters of 2021 was 36 years old. That is a significant change from 2010 when the median was 24 years, rising to 33 in 2020. Could it be that the charm of an old home is compelling, or is it that older homes are just available as the Baby Boomers might be downsizing and/or moving to a new location? More charm, yes, but more maintenance for sure.



War is a seemingly inevitable part of human history and its impact ripples through many institutions and facets of our society. World wars have been the cause (and sometimes the effect) of inflation, unemployment, and economic recessions. The far-reaching impacts of war, however, have seemingly been lost on the stock market. Looking to the past for answers, markets have proven to be amoral. For example, the U.S. stock market (represented by the S&P 500) was up 37% during World War II — an annual return of 5% during that period. Reliable data was not available for World War I.

A Russian invasion of Ukraine would arguably not result in a world war, but it does have some recent precedence. In August 2008, Russia invaded former Soviet Union member Georgia. The Russo-Georgian war, lasting only a few weeks, resulted in the independence of several territories from Georgia and the Georgian government severing diplomatic relations with Russia. Depending on the exact dates determined to be the beginning and end of the war, the U.S. stock market was flat to 2%. The exact impact of the war is difficult to isolate and 2008 had other major variables including the Great Financial Crisis. In fact, the Russo-Georgian War took place only a month before Lehman Brothers collapsed on September 15th making it the largest bankruptcy in U.S. history.

More recently, the annexation of Crimea by the Russian Federation took place in the aftermath of the 2014 Ukrainian revolution. Starting in February, the invasion resulted in a referendum on March 16th in which the people of Crimea voted to reunite with Russia, thus ending Crimea’s 60 years as a Ukrainian territory. The international community has deemed the referendum illegal. Surprisingly, the U.S stock market was up 1% on March 17th. Depending on when one determines the crisis to have begun and ended, the U.S. stock market was up anywhere from 2% to 8% and was up 14% for the year. While a Russian invasion of Ukraine would likely have serious geopolitical consequences, history tells us that it by no means is cause for a withdrawal from markets, especially in the long run.



During January, there were 467,000 new jobs created which was a huge jump from the previous two months (that were also adjusted upwards in a big way), surprising economists and the markets. We are still about 2.8 million fewer jobs than before the pandemic, but the gap is closing. The unemployment rate increased slightly to 4% which was the result of more people looking for a job. That makes sense as the “free” money from all the stimulus bills is drying up. It is also an indication that employers have a positive feeling about the future. Further proof of employers’ optimism can be seen by the low first-time unemployment claims of only 223,000 last month. 

With the Omicron variant on the wane, mask mandates are coming down across the country. This does not mean that it is going away, it simply means that it is running its course, although lingering more than most people thought it might. More people working means more people making money which means greater demand for goods and services which should translate into better profits. 

During January the NASDAQ which is tech-heavy went through a correction having closed more than 10% below its all-time high. The S&P 500 fell about 9% below its all-time high of 4,796 on January 3rd to 4,326 on January 27th just missing an official correction. There was a nice four-day rally over the past two weeks but was stopped in its tracks with inflation news. We experienced the highest year-over-year inflation rate since 1982 when 7.4% was reported for January. While the potential invasion of Ukraine can’t be ruled out and is a wildcard for sure, the biggest negative standing in front of the economy is inflation. 

The concern here is that the Federal Reserve Board might increase interest rates faster than anticipated by the markets. The bond markets are finally beginning to reflect an increase with the 10-Year Treasury crossing above 2% for the first time in two years and mortgage rates doing the same. As the markets adjust to this news, the volatility of the markets in 2022 is likely to continue. Be patient and remember the S&P 500 is up about 40% over the past two years.


According to the 10th Annual Nationwide Retirement Institute Long-term Care Survey, more than 50% of those surveyed said they were more afraid of falling than of getting cancer. As a result, 80% felt that living in a single-floor home was important as they age, but 68% still live in a two-story home. Maybe that is partly why the median age of a home is rising – Baby Boomers are slowly but surely moving. About 70% feel they will want to rely on family should they need long-term care, but 66% don’t want to be a burden to the family. Creates quite a dilemma, doesn’t it? Interestingly, the younger you are, the more likely you want to rely on family with the millennials coming in at 69%, the Gen Xers at 52%, and Boomers at 33%. Only 25% of the Boomers expect to live with their children, but 46% of millennials feel they will. Long-term care is a major financial issue. Getting long-term care insurance is expensive but will seem like a relatively low cost if you need to use it either at home or in a long-term care facility. According to the average cost for a long-term care facility in Florida is about $100,000 annually. Most insurance salespeople want to sell you a policy to cover 100% of this cost. But keep in mind that if you are confined to a long-term facility, it is covering many of the basic needs from home which you will not be spending while in a facility. Thus, if you want to ensure this risk, we generally advise clients to purchase long-term care insurance for about 70% of the anticipated cost. Please let us know if you would like to explore any insurance options. In any event, a conversation with your children is probably a good idea.



As you are preparing your taxes for 2021 and you had a student loan forgiven or canceled during the year, don’t forget that for Federal tax purposes, you do not have to declare the student loan forgiveness as income as you do in most situations. Student loans canceled or forgiven through 2025 are not federally taxable based on the March 2021 stimulus bill. This would have been a really big deal if the Build Back Better bill had passed because even more student loans would have likely been forgiven. If you live in a state with an income tax, you may still owe a tax to your state.



Last December, the New York Times published an article by Paula Span “Why Older Women Face Greater Financial Hardship than Older Men” describing the “rockier road” for women to secure their retirement. Why are women potentially in this position? 

One reason is what economists call “the motherhood penalty” where women who raise children have no or fewer hours of paid years in the workforce. Matthew Rutledge, a research fellow at the Center for Retirement Research at Boston College was quoted as saying “they never completely make up for the deficits.”

Remember that Social Security benefits are based on your lifetime earnings, and they calculate your benefit based on the 35 years where you earned the most. If you take a significant break from the workforce, you may find that you do not have 35 years of income. Therefore, any years where you have no earnings are entered as zero and that brings down the amount of benefits you are entitled to claim in retirement.

We encourage everyone to set up an account with to verify their own working history. Have you taken an extended period of time out of the workplace for caregiving children or aging parents? Are you part of the “Great Resignation?” Knowing your retirement income is an important step for your financial health, especially since Social Security represents a significant source of income for retirees. In the next ProVise Perspective$, we will identify another reason older women face greater financial hardships.