Simple Investment Strategy for Non-Savvy Surviving Spouse

[LOL!]

Examples of being tax-efficient in asset location can be found in this Vanguard whitepaper: http://www.vanguard.com/pdf/s556.pdf
Over a 10-year withdrawal period, a $1 million portfolio of half-taxable, half-tax-deferred could have a tax difference of more than $16,000 a year between the most tax-efficient and the least tax-efficient portfolio. Let's assume that a total "balanced" approached would fall half-way between those two extremes and the tax cost would be about $8,000 a year. That's not chump change to me.

[Kroeran]

in our clan the rule for unattended widows is to convert everything to simple fixed annuities, not guaranteed, spread between three or more companies with high ratings.

that way, if there is a screwup, or a gigalo, there is always another cheque in the mail next month. If the bank account is getting fat, go on a trip or help the young ones out.

a widow with a portfolio not absolutely locked up is a target

[Moemg]

Quote:

Originally Posted by Kroeran . a widow with a portfolio not absolutely locked up is a target

Kind of like a widower who doesn't know how to cook and still has a healthy libido ??

[freebird5825]

Quote:

Originally Posted by Kroeran ...a widow with a portfolio not absolutely locked up is a target

3 words..."It's all invested."
Next question?

[Nords]

Quote:

Originally Posted by Moemg Kind of like a widower who doesn't know how to cook and still has a healthy libido ??

Who cares whether or not widowers can cook?

[Moemg]

Quote:

Originally Posted by Nords Who cares whether or not widowers can cook?

(The Casserole Brigade ) Women who are looking for a new partner and if he has some money and a driver's license he's in heavy demand .

[Nords]

Quote:

Originally Posted by Moemg (The Casserole Brigade ) Women who are looking for a new partner and if he has some money and a driver's license he's in heavy demand .

Libidos, money, driver's licenses... sounds like cooking skills are coming in a distant fourth!

[freebird5825]

Quote:

Originally Posted by Nords Libidos, money, driver's licenses... sounds like cooking skills are coming in a distant fourth!

Depends on which section of the cookbook his page is opened to...

[Kroeran]

Quote:

Originally Posted by Moemg Kind of like a widower who doesn't know how to cook and still has a healthy libido ??

been there, done that, got the T-shirt, ...regarding my 80 year old father in law and a woman half his age

fortunately, he had the good sense to put the condo in the kids names (just be careful of the tax consequences of doing this..there is a good way and a bad way to do this)

once she found out, she moved on

[Kroeran]

Quote:

Originally Posted by freebird5825 3 words..."It's all invested." Next question?

do you really think that will stop a determined con artist who is in her bed?

or a parasitic offspring or nephew....who is the only one looking in on her when she is 85?

[freebird5825]

Quote:

Originally Posted by Kroeran do you really think that will stop a determined con artist who is in her bed? or a parasitic offspring or nephew....who is the only one looking in on her when she is 85?

Yes, I do. BTDT myself with "interested parties", interested in how much life insurance, interested in how did I get to FIRE at age 48, interested in stuff that was none of their darn business.
My late MIL2b has BTDT with wanna-be parasitic relatives. She was 82 and partially blind when widowed. She especially loved saying the 3 words. I loaned her the expression as a stop-all.

[Kroeran]

a better canned answer would be...

"I lost it all buying lottery tickets... can I borrow $50 bucks until Tuesday?" ; - )

[freebird5825]

Quote:

Originally Posted by Kroeran a better canned answer would be... "I lost it all buying lottery tickets... can I borrow $50 bucks until Tuesday?" ; - )

[ziggy29]

Quote:

Originally Posted by Kroeran a better canned answer would be... "I lost it all buying lottery tickets... can I borrow $50 bucks until Tuesday?" ; - )

That would be very effective parasite repellent too...

[jIMOh]

I have a letter in our safe in an unsealed envelope to my wife. It explains what money is where, and a few people I might trust to give her advice if this is overwhelming.

The assets in my name are much larger (If we have 200k invested, about 150k of it is in my name). I started investing younger, and my contributions have been maxed for some time. I pretty much explained to her what an "in kind" transfer means and told her to contact T Rowe Price and they would tell her the forms to fill out to transfer all my accounts to her name, keeping the same investoments in the same mutual funds I have already picked.

I then told her she would need to stop investing in the funds I picked for her, and start investing in the ones I use (I use diversified funds chosen by market cap-large-mid-small-foreign; in wife's smaller account we use aggressive sector funds which would not make sense if household had only 1 person investing).

[Animorph]

My instructions to DW are just to sell some of whichever fund has too much in it. It doesn't matter if everything balances out perfectly, but this avoids having to sell everything and buy something else. She has all the account info.

I hope to be around long enough to blow through all the taxable accounts so that taxes are not a big hassle. And I have term life insurance for another couple of years to buffer any problems.

[Moemg]

Quote:

Originally Posted by jIMOh I have a letter in our safe in an unsealed envelope to my wife. It explains what money is where, and a few people I might trust to give her advice if this is overwhelming.

Make sure you have the combination to the safe somewhere easy to find . At times like this your mind goes blank .

[freebird5825]

Advice I received from my estate planning session (CFP) in 2002 was to register all accounts and assets with titles as JTWROS. This saved me a lot of hassle and kept assets out of probate.
My attorney was able to file a "probate lite" for the small amounts of assets not registered as JTWROS.
Research joint tenancy options and rules for your state.
Carefully evaluate this move for your own situation.
YMMV

[Kroeran]

give your spouse a portion of the bills and finances to manage. Study how that goes. Adjust strategy accordingly.

consider how you would feel if your spouse remarries, predeceases the new spouse, and all the money goes to the kids or trophy wife of the new spouse.

you may wish to slice things in half, and keep half in a life estate to ensure the kids get something...depending on your spouses requirements.

the only sure way is to give the kids something right up front, hopefully be used to pay of student loans or buy a house or business, and lock everything else up in an annuity for the wife.

[youbet]

Quote:

Originally Posted by Kroeran give your spouse a portion of the bills and finances to manage. Study how that goes. Adjust strategy accordingly.

Excellent idea. We've been doing this for years. The bad news is that DW "stalled out" at paying the bills, balancing the checkbook and that sort of thing. The good news is that I know and understand that and now plan accordingly.

Quote:

consider how you would feel if your spouse remarries, predeceases the new spouse, and all the money goes to the kids or trophy wife of the new spouse. you may wish to slice things in half, and keep half in a life estate to ensure the kids get something...depending on your spouses requirements.

Agreed. If I go first, my 401k goes to our son. If DW goes first, her 403b (now in a rollover IRA) goes to our son. The resulting nestegg sans these amounts still leaves a decent retirement income for the survivor.

Quote:

the only sure way is to give the kids something right up front, hopefully be used to pay of student loans or buy a house or business, and lock everything else up in an annuity for the wife.

Agree on the "give the kids something up front" part but, despite DW not being very interested in financial things, am trying to avoid the annuity solution for the balance.