California Housewife -- Retired?

[mountainsoft]

Where my husband and I differ in terms of investing is that I prefer investing in the stock market while he prefers investing in real estate.

I don't know what you're overall expenses are, but it doesn't sound like you're hurting for money? Can the two of you come to agreement to join forces and cover your joint expenses? If so, you can each invest the remainder your "own" money however you wish. Just be prepared that either one of you could lose money. That's the reality of investing. At least you'll be diversified.

I don't necessarily see a problem with your husband investing in real estate with "his" money, and you investing in stocks with "your" money. He may have more knowledge in one area, and you may have more knowledge in another. I certainly know a lot more about investing than my wife does, only because I have obsessively been studying and learning the last several years. That doesn't make her any less intelligent or capable, she just hasn't focused on it the way I have. And it certainly doesn't mean I'm above making a mistake or two along the way.

I feel like my role in this marriage has been diminished because I my "job" of raising our kids is done, and he's home all day now after having worked for 35+ years gaining all this knowledge of the business world that I don't have.

As a Mr. Mom and house-husband, I will be the first to tell you your work is every bit as important as his. Just because you didn't get paid for it doesn't mean you didn't contribute. I'm betting you worked longer hours and had more responsibilities anyway. Trust me, I know the feeling of being underappreciated and disrespected because of my chosen "profession".

Everything seems to be very "my way or the highway" right now, and that doesn't feel like a partnership to me.

If your husband is newly retired, I'm sure he's struggling with the idea of no more income coming in. He's probably instinctively hoarding "his" money for fear of losing it in things he doesn't understand. He may even resent the money you could inherit. Retirement is a major life change.

Other than a bad deal or two in the past, it sounds like you've mostly both been on the same page during your marriage? Give it time, keep talking, and let him know your concerns. For now protect what's yours until you can both come to a mutual agreement. You've made it this far together, I'm betting this is just another bump in the road.

Good luck!

 

[tulak]

I can't answer your question, since my situation is/was different. You've also gotten good advice in this thread. I'd only add to make sure you protect yourself.

I've seen many threads here where both partners were not on the same page. The last one I recall was where the husband, who managed all finances, passed away. The husband took the pension with no survivorship benefit. So with the pension gone, the wife now had to figure out how to make ends meet. Not a pretty picture.

You seem to have a good idea of finances and are smart enough to reach out for advice before it becomes an issue. I hope that you can get this sorted out without too much pain.

As an idea, maybe if you start a conversation, what happens if one of us passes? And then make sure there's a solid plan for both of you. If your spouse manages all your finances, I don't think it's at all unreasonable to have this conversation, but I would phrase it in a way that takes into consideration both of you. For example, what happens with your inheritance, etc., if you pass first? That way it might be less threatening?

 

[Ready]

Is it possible your husband has an addiction to high risk activities? It's basically a gambling problem, but instead of going to Vegas and playing blackjack he is trying to make it rich by investing in high risk high reward investments?

 

[Housewife51]

Thanks for the validation, Mountainsoft. It might be nice if I ever had heard that much from my husband. Yes, he worked very hard his entire career, but he also traveled a lot in the first 20 years of it, leaving me to raise three kids on my own much of the time. I worked hard, too, and I continue to work hard. I certainly didn't get to stop doing what I've been doing on the day he retired.

Yes, I think this is just a bump in the road by and large, and this real estate investing stuff if the only time we've really butted heads on anything related to finances. I'm just very gun-shy about blindly following him down whatever path he chooses, thanks to the big mistake 18 years ago. We were indeed fortunate not to have been taken for tens of thousands of dollars, but it wasn't because we were smart -- we were just lucky. I just have no interest in repeating that experience again, possibly with a more financially devastating outcome.

 

[Housewife51]

Is it possible your husband has an addiction to high risk activities? It's basically a gambling problem, but instead of going to Vegas and playing blackjack he is trying to make it rich by investing in high risk high reward investments?

Absolutely not. He doesn't gamble in any form.

I don't think he's looking for a quick buck or for some over-the-top return. I just think he might not be completely as knowledgeable on what he's doing as he should be. I wish he'd consult an actual expert instead of signing up for endless webinars run by who-knows-who.

 

[Ready]

Absolutely not. He doesn't gamble in any form.

I don't think he's looking for a quick buck or for some over-the-top return. I just think he might not be completely as knowledgeable on what he's doing as he should be. I wish he'd consult an actual expert instead of signing up for endless webinars run by who-knows-who.

What do you think his motivation is for pursuing these investment opportunities?

 

[Chuckanut]

It’s a warning sign to be sure.

Whatever you do, don’t commingle yourself inheritance. Keep it all in your name only.

Oh. Make sure you have a current will.

 

[38Chevy454]

How about a suggestion that both of you visit a few only financial planner? Have a review of your current situation, with understanding of the income, risks and allocations. The FP can casually point out that his pension, 401k and rental properties are joint money and to provide some portion of your living expenses. Do either of you receive SS? Do you have a budget or at least track expenses to help the FP develop an income plan. Is there plan for inheritance to your kids out of his 401k? What about how long to keep rentals in future?

I agree completely to keep any of your parents inheritance in separate accounts and not commingled.

 

[Bamaman]

As we get older, dealing with real estate investments is often too much work physically. And retirement is more about less work.

But if he starts hitting you up for a C8 Corvette, that's when you start to worry. Mid life crisis' can be real.

 

[athena53]

Does anyone who's more of an expert than I am on estate planning know if an inheritance that's never been comingled could be tapped to pay for his LTC if he spends or loses whatever he has? This link says all assets held by either spouse are counted, but it doesn't go into detail about assets that may never have been comingled.

https://www.payingforseniorcare.com...iquid assets, such as,Medicaid and Joe is not.

The scary scenario I'd worry about is that he loses all his money, either through spending or bad investments, he needs LTC and her assets are tapped to pay for his LTC before Medicaid kicks in. If that's a possibility she needs to consult an estate lawyer.

I keep an eye on this issue myself because I'm a widow and perfectly happy spending whatever is necessary out of my own funds for my LTC and I can do it, but want to leave a legacy if I can- not pay for a spouse's LTC.

 

[dirtbiker]

Some clarification to my comments above are needed, I see.

First, I want to make it clear that my husband is a good man, and I have no intention of getting a divorce. I'm not going to turn this into a marriage counseling session, but suffice to say that my inheritance will be about half "his" retirement savings. We have a house, two rental duplexes, plus his pension and 401(k) funds.

I had said I intended to use my inheritance to help future grandchildren pay for college and perhaps to finance our travel plans or other non-essential projects, but now my husband seems to want to use what I thought was our joint money to make investments I don't necessarily agree with. I guess I worry too much about blowing everything he's worked for because of a bad investment decision (or two or three).

I have been managing my mother's investments ($3 million in a Schwab investment portfolio and a $2 million house) with the help of financial advisers for nearly three years, and the investments have increased in value substantially during that time. I know enough to know I don't understand the ins and outs of investing well enough to do it on my own, so my advisers have been very helpful.

Where my husband and I differ in terms of investing is that I prefer investing in the stock market while he prefers investing in real estate. That's fine, but I think my problem comes with not really believing he's knowledgeable enough to be doing this on his own. He gets information from dozens and dozens of sources, and he's on one webinar or another about real estate investing almost daily. I get very wary of all these sales types pitching this investment idea or that one, and I'm concerned he's going to get ripped off.

This feeling is not without precedent, as the first rental property we bought 18 years ago was as a result of a real estate investing meeting he attended that turned out to be a pyramid scheme. I had bad feelings about it from the beginning because the promises of high cash flow seemed too good to be true, but I kept my mouth shut. Sure enough, the people behind the scam were caught and sent to prison, but we were among the very few investors who actually did get a property. (Most investors lost tens of thousands of dollars.) Because we didn't officially get ripped off, my husband considers this a no harm/no foul experience. I disagree, since he continues to watch all the webinars with guys who talk like snake oil salesmen, and it makes me very nervous he'll fall for it again.

My main concern, which I may not have really conveyed well in my original post, is that I feel like my role in this marriage has been diminished because I my "job" of raising our kids is done, and he's home all day now after having worked for 35+ years gaining all this knowledge of the business world that I don't have. Because our shared roles of parenting are essentially over, I guess I feel like I'm supposed to just step aside and not be involved in any of the money decisions that require a business-trained mine. I wasn't involved in them before he retired, because it was his 401(k) and his pension, and I couldn't do anything with those accounts even if I wanted to.

Yes, I'm his beneficiary on the accounts, and we have a couple of LLCs that now seem to be so overcomplicated I'm not sure I could ever figure them out if something happened to him. He has no patience with explaining things I don't understand, because he feels threatened if I question a decision or the reasoning behind one. Yes, I suppose some counseling wouldn't be a bad idea, but the chance of getting him to do it is slim.

I'm not looking to dictate how our money will be invested or spent, but I'd sure like to be allowed an opinion or a veto if I don't agree with a particular scheme he has in mind. Everything seems to be very "my way or the highway" right now, and that doesn't feel like a partnership to me.

To me, this doesn't actually sound as bad as it did in your original post. You like investing in the market, he likes real estate. Besides the one bad investment (that turned out not to actually be a bad investment for you) in real estate nearly two decades ago, has he made any other bad or risky investments? Does he maybe feel like you are harshly judging him based on one bad decision years and years ago? Maybe he's being very defensive over this? Putting myself in his shoes, if I felt like my wife didn't trust in me, I might feel backed into a corner. To be fair, I would also be very frustrated if in your shoes as well.

Do you know where 'his' current ~$6 mil (right? based on your post above) in retirement is invested right now? Do you know how much of it he wants to invest into real estate? Maybe you two can agree to invest only a certain amount into his real estate investments, that if it goes sideways, you could afford to lose. Or better yet, see if you two can study and learn real estate investing together so that you can jointly invest together, rather than it being his investment.

 

[Golden sunsets]

If your description of joint assets plus your expected inheritance is accurate, you are implying that the total sum is somewhere around $9 million. If that's true, then engaging a financial planner certainly makes sense, regardless of how financially savvy your spouse is. Are you the only heir to your mother's estate? If so you mention another 2 million in home value. Will that become yours as well? If you have been managing a 5 million dollar estate yourself, even with help, you are no novice.

If for no reason other than you should understand the marital assets, related income streams and annual expenses, in the event of his death or incapacitation, he should not exclude you from the details. A third party objective advisor, at least a one time visit with one, is in order and is a position he should not balk at.

How about your children? Can you involve them in advocating for your cause?

 

[EastWest Gal]

Regarding the money: I agree with 38Chevy454. Meet with a fee only planner. What he said about joint property is entirely true-California is a community property state. Everything he said I agree with 100%.

However, it isn't about the money, although there is financial concern as that money is designated to support you both for the rest of your lives.

You've shared your entire adult lives and now he seems to want to take it back. Certainly that's what it seems like to you-a gut punch. But maybe, he just wants some space to do his own thing with some of the money. And now that you're both home all the time, especially with the pandemic, maybe he just needs some more time and space and yes, money, for himself. As the sole breadwinner, I experienced financial stress and job stress on a daily basis. DH could never experience what I experienced and felt. I am grateful he didn't have to live out in the very cutthroat world, and that he was a very good parent, patient and kind. I felt a bit broken after 35 years of work.

With a looming inheritance that you don't have to share, he may feel at times resentful. Why does he have to share when you don't? It's not your fault-you didn't write those laws. I know the feeling of wondering what life would be like if I only had to consider myself. I wouldn't be human if I didn't reconsider my choices from time to time.

There is a lot for you two to figure out here, and hopefully DH and you can support each other through this. Try to see things through his eyes, but he must also try to see the situation through your eyes.

 

[Fermion]

If your husband doesn't gamble, what in the world could be difficult about investing the money in 50% total stock market 50% total bond market and then go play golf?

 

[Fermion]

With a looming inheritance that you don't have to share, he may feel at times resentful. Why does he have to share when you don't? It's not your fault-you didn't write those laws. I know the feeling of wondering what life would be like if I only had to consider myself. I wouldn't be human if I didn't reconsider my choices from time to time.

I can see this. Imagine if you worked 35 years while also doing family events with your spouse for her parents, maybe taking the kids to visit them, going with your spouse and them to the hospital when they have medical emergencies, then when they pass you are entirely left out of the inheritance. Seems a bit raw.

 

[njhowie]

I had said I intended to use my inheritance to help future grandchildren pay for college and perhaps to finance our travel plans or other non-essential projects, but now my husband seems to want to use what I thought was our joint money to make investments I don't necessarily agree with. I guess I worry too much about blowing everything he's worked for because of a bad investment decision (or two or three).

Maybe an approach would be to say "How about taking half the $6 million, put it with the advisor, which we know will be safe, and then you can do what you want with the other $3 million". Bring up your concerns, and that you'd feel much more comfortable if some of it was not solely in real estate or higher risk investments. Don't make it confrontational, but more of putting forth an alternative, which won't take away from whatever his investing plans are, but just limits the risk on a portion of it. Possibly offer that you'll do the same with your inheritance...half with the advisor, half for whatever your gifting/spending plans are.

 

[steve72852]

Loser Husband

Sorry but the guy is an inconsiderate bum. I have a feeling this did not come as a shock, sadly. Make it clear your inheritance is yours only. Lost the best investment he ever made ... you.

 

[piccolopat]

I agree with others that sitting down with a fee only financial planner is a good start. I also think that perhaps agreeing on a set pot of play money for your husband to do with what he pleases is a good compromise. Absolutely make sure that none of your inheritance is commingled with marital assets at all. Last, now that he is retired he should be sharing the load of running and maintaining the house. Let him do his own laundry and cook his own meals for a few days as a reminder about how much your unpaid career was worth to your family. Let him know that you will use your inheritance as you please and if you travel, by all means let him pay his own way.

 

[dirtbiker]

Sorry but the guy is an inconsiderate bum. I have a feeling this did not come as a shock, sadly. Make it clear your inheritance is yours only. Lost the best investment he ever made ... you.

This is a hell of a first post after 6 years of lurking!

 

[Ramen]

Housewife51, what did your husband retire from? Was he in charge of something, perhaps a project or team? It sounds like he might be going through a post-retirement midlife crisis. Maybe he feels a bit lost now without his former professional authority and still needs something to be in charge of?

It also sounds like the bigger mismatch here, more than investment styles, is maturity levels. "My way or the highway" is childish and suggests some growing up is needed. Perhaps he feels subordinated at home, where you've been in charge all these years.

I don't know how some marriage counseling can be avoided here. Maybe you can figure out some way to help him feel more in control. Better yet, some counseling might help him see that there's no reason for tight grips.

 

[braumeister]

Just so folks are aware, the OP hasn't been back since starting this thread.

 

[rodi]

Interesting situation. Perhaps he didn't mean it the way it came across. His pension, presumably, is in the form of an annuity. Presumably he is contributing those funds to the running of the household, same as he did when he was working for a paycheck. Presumably any net income from the rentals also goes towards the household. The 401k is titled in his name... so technically, it's his... while you are still married. But if divorce were to happen (which you say is not on the horizon) he would learn that half of it was yours. (And half the pension.) He should look up the term QDRO... Qualified domestic relations order.... In the case of a divorce that is presented to the 401k brokerage and the pension program and they start distributing it to you in the percentage indicated by the order.

As mentioned - as long as you keep your future inheritance separate (his name NOT on the proceeds) it is yours. Be sure to keep it separate.

As far as investment differences... I think we all know that investing 100% in one sector (real estate, stocks, bonds, whatever) is riskier than having diversity with the money split between differing sectors.

And as far as the LLCs... It's not uncommon to have an LLC per rental property. That puts a buffer against liability for rental properties. I have friends with several rental properties, and significant assets. That's the way they approached it. And if the LLC only holds 1 property - you can sell the LLC (which owns the property) and transfer the prop 13 tax rate. (At least you used to be able to do this.)

 

[youbet]

We have plenty of money for retirement, but we don't share the same ideas about how to invest that money. My husband recently announced that his pension and 401K are now "his" money only, and I get no say in how it's handled.

Many posters are totally misinterpreting what's going on. It seems your hubby and you disagree to some extent on how your retirement funds should be invested. Hubby is saying he wants to have say and, to achieve that, he's announced that's it's his pension and 401k. But, at least the way you worded it, it doesn't sound like he's trying to cut you out of full sharing of your retirement funds but only that he wants to stop arm-wrestling about how it's invested. Cutting you out vs. him nominating himself as the main decision maker in regard to AA are two very different things.

BTW, are you planning on giving him an important role in your $3 MM inheritance if you and he don't fully agree on how that's to be invested? I bet not. If that's the case, you'll be doing exactly the same thing he's doing now.

Why not compromise by accepting his investment decisions on your current retirement investments and then take the main decision role on investment decisions for your inheritance?

 

[DangerDad]

Certainly real estate is a valid investment option—however I consider it odd that he’s not even considering the more standard option of stock/bond index mutual funds. And your description of his propensity to be swayed by snake oil is very concerning. I do most of the investment research and decision making in our family but I definitely involve my wife and seek her input/blessing, especially for the bigger decisions. It’s a matter of respect. I think you deserve that—but that’s really for you to decide. Good luck to you.

DangerDad