Planning for non-DIY spouse

[Hamlet]

I've taken the lead in our investing as a couple. I'm very comfortable with managing our investments, but my wife is less so.

If something were to happen to me, I think that she would want a financial planner type to help her with things, even if it meant reducing her returns to pay for the help.

My former manager of 15 years has recently gotten into financial planning, and now works for Thrivent Financial. I think he is well suited to the profession, and I think he would give her good advice and handle her money very carefully, albeit with a higher fee structure than I would like.

I'm considering giving her instructions to call him in the event of my death.

Does anyone have a better alternative for this situation?

 

[panacea]

I believe you are correct about the costs being quite high at Thrivent. Consider also interviewing a couple fee-only planners near you. And although keeping the cost low is important, it's just as important (maybe more important) that your wife feels comfortable with the person/team that she would be working with.

 

[Sue J]

My spouse is also uninterested in handling our finances. I am a super cautious investor but I'm learning to stretch my wings a bit. I'm also super cheap/frugal so I would rather learn to do it myself than pay someone to manage our money.

I've learned a lot on these forums about keeping it very simple with a few index funds. I've been using Vanguard. If I died before DH, even he could follow the plan.

 

[youbet]

Hamlet,

Similar problem here. DW is plenty smart just totally put off by money management and taxes. Wish I had an answer.

She'll need someone who manages the portfolio appropriately for returns, withdrawal strategies, estate planning, tax efficiency and "rings a bell" at all the right moments for RMD's, annual gifting to the kids/grandkids, etc.

When you need a planner to be this involved, trust becomes paramount. I haven't found the person or firm yet. I'll be watching this thread with interest.

 

[rodi]

My husband is also less-than-interested in anything financial. I've been trying to educate him... but he doesn't feel the urgency.

Unfortunately, now he's having to get into it, a bit, since he got guardianship of his parents... When I say he was less than interested - he had never even set up online access for bill paying prior to this. I've been stepping him through it for his parents' bills.

My sister and I inherited an IRA from my dad. I chose to go the DIY way, she chose to use a managed fund portfolio approach. Fortunately, she went with Schwab, which was relatively low expense. They asked her how much she needed, remind her about RMDs, and she just files the statements.

 

[REWahoo]

My concern is no matter how careful and confident I am that I could choose an appropriate financial advisor for my spouse, what happens if the advisor dies or retires?

I've left my spouse - who has no interest in investing - these simple instructions:

I[FONT=Arial, sans-serif]nvest all IRA amounts (the combined total of both our IRA accounts) in three Vanguard Funds: Wellington, Wellesley and a money market fund. [/FONT]

• [FONT=Arial, sans-serif]Put approximately $75,000 in the money market fund (VMMXX). This will be the account used to fund monthly transfers to your checking account.[/FONT]
• [FONT=Arial, sans-serif]Invest 60% of the remaining IRA funds in Wellesley (VWIAX)[/FONT]
• [FONT=Arial, sans-serif]Invest the final 40% of the IRA funds in Wellington (VWENX)[/FONT]

[FONT=Arial, sans-serif]Through Vanguard, set up the Wellesley and Wellington accounts to have dividends (paid quarterly) and capital gains (paid annually) go to the money market account. [/FONT]

Also through Vanguard, set up a monthly transfer of $ x,xxx to your checking account. This, plus your SS and (small) pension will provide your monthly income.

When the balance of the money market fund decreases below $40,000, consider selling shares of Wellington to 'top up' the money market account to $75,000.

I have also shared this plan with DD#1 (CPA) and asked her to help her mom monitor her investments - and her expense management.

Not perfect, but the best 'manage from the grave' financial plan I could come up with.

 

[pb4uski]

My plan is similar to REWahoo, but I have yet to put it on paper.

DD (#1 and only) is also a CPA and she would help her Mom out in executing the plan.

My other instruction will be to not to entertain any pitches from either of my insurance agent BILs. Vanguard only (which is where we are now).

 

[Live And Learn]

I've left my spouse - who has no interest in investing - these simple instructions:
.....
I have also shared this plan with DD#1 (CPA) and asked her to help her mom monitor her investments - and her expense management.

Not perfect, but the best 'manage from the grave' financial plan I could come up with.

Wow -that's great. I think even DH could follow that and he REALLY has no interest.

 

[Willers]

My plan is also like REWahoo's (only with index funds) and I have also included our CPA in the plan. He is as trustworthy as it gets. She has absolutely no interest in learning about investments and loves making fun of my spreadsheets so I kept it very simple.

Also, my goal is to build enough of a nest egg that DW does not have to sweat trying to take advantage of every strategy I would.

 

[fritz]

My concern is no matter how careful and confident I am that I could choose an appropriate financial advisor for my spouse, what happens if the advisor dies or retires?

I've left my spouse - who has no interest in investing - these simple instructions:

I have also shared this plan with DD#1 (CPA) and asked her to help her mom monitor her investments - and her expense management.

Not perfect, but the best 'manage from the grave' financial plan I could come up with.

Similar plan - 50/50 Wels/Wel with quarterly dividends going directly to MMA at Credit Union. Written guidance for rebalancing, and order of selling off accounts if/when necessary to maintain income or for unplanned expenses (and daughters aware of need to assist with technical/computer aspects). We are retired and own these funds now, so easy to implement plan.

Quarterly fund dividends already go to CU. Dividends and SS provide a comfortable income stream in our scenario. Couldn't come up with a better plan where I felt that investments would be better managed and set up to provide growth and an income stream w/o paying a significant amount for management. Spouse has no interest in investing unfortunately, and I've managed all of our accounts from the beginning.

 

[Hamlet]

I like this. Thanks for sharing.

My concern is no matter how careful and confident I am that I could choose an appropriate financial advisor for my spouse, what happens if the advisor dies or retires?

I've left my spouse - who has no interest in investing - these simple instructions:

I have also shared this plan with DD#1 (CPA) and asked her to help her mom monitor her investments - and her expense management.

Not perfect, but the best 'manage from the grave' financial plan I could come up with.

 

[ERD50]

I like the REWahoo plan also. One wrinkle that I think I might add would be some sort of rule for not drawing down too much of the principal. Something along the lines of:

Total WD should not exceed X% of the portfolio. I would create a table for X% for various years of age (or life expectancy).

I know that's getting a step up in complexity, and maybe is not so important if expected divs alone will fill most/all the gap, but I'd hate to have that portfolio depleted too soon. I guess for REWahoo, the DD#1 would cover that. I think I could also fill in 2 out of 3 of my kids on this now, and the third in a few years.

I've only got to the first step about a year ago, had to dag her kicking and screaming to just sit down for ten minutes and do a basic - here are our accounts, here's roughly how much $ are in each, here's how to get to them, here's the auto-transfer from savings to checking, and here are the bills on auto-pay. Time for an update and a step forward. Oh joy.

-ERD50

 

[jollystomper]

I've left my spouse - who has no interest in investing - these simple instructions:
...
I have also shared this plan with DD#1 (CPA) and asked her to help her mom monitor her investments - and her expense management.

Not perfect, but the best 'manage from the grave' financial plan I could come up with.

+1

I do all the finances and my wife is interesting in understanding where we stand but isn't comfortable with making changes. I've also left her some basic instructions along the same lines, along with names of family members who are also knowledgeable and having similar investment styles, with finance backgrounds, that she can trust.

 

[Accidental Retiree]

Thanks for sharing your strategy, REWahoo. It is clean and simple and well laid out.
Whether it's for DH or me to execute in the absence of the other, or just for simplification of management as we get older, your approach makes sense.

I discussed it with DH and we will keep it in mind as we seek to become somewhat less conservative and increase our holdings in Wellesley and then add some Wellington when CDs mature over the next couple of years.

We laddered most of our retirement funds when we were unexpectedly "whacked by a RIF," as Ziggy29 put it so eloquently a few weeks ago; it just seemed easier to do that when 401(k)s rolled over.

Based on what I've learned here the last year, though, we are moving more into Vanguard and feel very good about that.

 

[Bestwifeever]

....
I've left my spouse - who has no interest in investing....

 

[tmm99]

REWahoo,

Very good. I think I will have something similar to what you have for my future spouse...

 

[Independent]

My wife has no interest in "investing", but she writes most of our checks and tracks all of her spending.

At her request, I produce a quarterly list of assets for her - on paper. I also add a footnote regarding life insurance.

The asset list is very simple. She can leave everything where it is, withdraw as she likes, and won't get into serious trouble. I'm sure the IRA providers will remind her of RMDs. She can look at my paper tax returns and fill in next year's by herself if she's so inclined. She'll probably ask my daughter for tax help.

I could tell her "Don't do ___ after I'm gone!", but what good would that do? She hasn't asked for such advice. If she ever does, I'll write something simple out. If she goes her own way and does stuff that I'd consider "mistakes", I'll be gone and it won't impact me.

 

[packrat44]

Good reminder to put instructions in a written format that are easy to understand and follow.

Spouse is not interested in the process, but she is interested in the end result.

 

[Which Roger]

DW and I discussed this very topic just a few days ago. She pays the bills, I manage the investments. We consult with each other as necessary, and both have a general idea of what the other is doing, but need to be filled in on the specifics. So we will make some time to do exactly that, and put it all down on paper.

Regarding the investments, DW is fairly well-versed in investing (understands asset allocation, the advantages of index funds, understands sweep accounts, etc.) She's not an investing geek like I am, however, so let's me take the lead.

This forum is an excellent source of unbiased, free financial planning. So maybe the way to go is to summarize in a page or two assets, accounts, and investing/spending strategies. And at the top of the first page, say "when I'm gone, log in to the ER forum using this username/password, tell them the situation, provide them this information and ask for help".

 

[youbet]

This forum is an excellent source of unbiased, free financial planning. So maybe the way to go is to summarize in a page or two assets, accounts, and investing/spending strategies. And at the top of the first page, say "when I'm gone, log in to the ER forum using this username/password, tell them the situation, provide them this information and ask for help".

Yeah, that'll help a lot........

She'll get advise ranging from go 100% fixed to 100% equities and from ultra conservative to ultra aggressive withdrawal rates....... She'll be told to use an advisor and to DIY. Folks with real life experience will suggest totally opposite strategies that have actually all worked out for them, or so they say. She'll meet fringe thinkers and herd followers.

Ya might want to warn your DW that there will be diverse opinions from people who are all positive they are 100% correct and that their way is the only way.

I learn a ton from this forum and enjoy participating, but I'm not sure I'd tell my DW to post our financial info and then follow the advise unless she knew far more of the basics than she does, had more personal interest and had her own developed opinions on the various strategies. She'd hear a lot of great ideas from bright folks but might not be able to sort the wheat from the chaff.

 

[Which Roger]

Yeah, that'll help a lot........

She'll get advise ranging from go 100% fixed to 100% equities and from ultra conservative to ultra aggressive withdrawal rates....... She'll be told to use an advisor and to DIY. Folks with real life experience will suggest totally opposite strategies that have actually all worked out for them, or so they say. She'll meet fringe thinkers and herd followers.

Ya might want to warn your DW that there will be diverse opinions from people who are all positive they are 100% correct and that their way is the only way.

I learn a ton from this forum and enjoy participating, but I'm not sure I'd tell my DW to post our financial info and then follow the advise unless she knew far more of the basics than she does, had more personal interest and had her own developed opinions on the various strategies. She'd hear a lot of great ideas from bright folks but might not be able to sort the wheat from the chaff.

Good points. The document would have to make the current strategy very clear, then say that this forum should be used to answer questions about that strategy.

 

[FANOFJESUS]

What do you think of this idea REWahoo?
Might also work for folks with all money in taxable in the 15% bracket or lower.
Invest all IRA amounts (the combined total of both our IRA accounts) in two Vanguard Funds: Invest all IRA amounts (the combined total of both our IRA accounts) in two Vanguard Fund: Target Retirement 2015 and money market fund (VMMXX)
Put approximately $75,000 in the money market fund (VMMXX). Then transfer 75k to the local credit union money market (Makes more at the local credit union than Vanguard). This will be the account used to fund monthly transfers to your checking account.. This will be the account used to fund monthly transfers to your checking account.

Through Vanguard, set up the Target Retirement 2015 accounts to have dividends (paid quarterly) and capital gains (paid annually) go to the money market account.

Also through Vanguard, set up a monthly transfer of $ x,xxx to your checking account. This, plus your SS and (small) pension will provide your monthly income.

When the balance of the money market fund decreases below $40,000, consider selling shares of Target Retirement 2015 to 'top up' the money market account to $75,000.and a money market fund.

 

[REWahoo]

What do you think of this idea REWahoo?

Looks good to me.

There are a number of Vanguard funds you could use to do what I'm trying to accomplish - one of the Target Retirement funds or another balanced fund like STAR would do the job. Choose the fund with your favorite flavor of asset mix, just be mindful of the fund's expense ratio.

I stuck with Wellesley and Wellington using the old 'dance with who brung you' approach.

 

[haha]

Good points. The document would have to make the current strategy very clear, then say that this forum should be used to answer questions about that strategy.

I think that might be risky. People on this forum come and go, and they all are mortal, therefore the quality of the advice that she might get could be very different than the read on it that you get now.

I've known of very successful men who left a big portfolio along with an admonition to never sell any of it. I know of at least one instance where this was very good advice. Well known Dallas oilman and onetime mayor of Highland Park, Ashley Priddy, instructed his wife that in the event of his death, she should never sell the Sabine Royalty units that he had spun out from Sabine Corporation. Somebody down there told me about that in 1983 or 84. I think Sabine Royalty was about 15 years old by then. I looked at the 10-k and figured it would not be long until the reserves are all produced, so I made no action. An example of how a little knowledge can be a very bad thing. 30 years later after a unit holder has received multiples of his original investment, SBR still has good reserves and still likely has a bright future of sending out checks to the holders. But I think this is the exception that proves the rule. If I had a wife, I think I would do something similar to Wahoo, or perhaps using large index funds.

As far as annual draw, I read an interesting idea in AAII. They suggest doing what the IRS does with IRAs. Annually withdraw an amount equal to the prior years ending balance, divided by one's remaining life expectancy as defined in the annuity table used by IRS for this purpose. I think this might not be safe if started too early, or if used with an AA that was quite volatile. But it should be OK otherwise.

Another very important thing is to have a trustworthy person look over the loved one's shoulder to help avoid any fraud or larceny being perpetrated on him or her. For me this person would usually be limited to a son or daughter that you are very confident in.

Ha

 

[youbet]

Another very important thing is to have a trustworthy person look over the loved one's shoulder to help avoid any fraud or larceny being perpetrated on him or her.

I do this for a buddy's widow. She gets advise/help from a program Fidelity offers which, IMO, isn't excessively expensive and simply rebalances her portfolio to be compliant with a model appropriate for her age. It's all low cost funds. She sends me a copy of a statement quarterly and I send her a few comments. So far, after 7 years, it's all been straight forward and vanilla. The toughest thing was keeping her calm during the recession.

I'm really glad for the Fidelity arrangement. If she was using an independent advisor of some type, it would be more likely I'd have to question some activities or lack of activities.