Preparation for the last chapter without you

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Jerry476
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Joined: Sun Jul 31, 2016 3:29 pm

Preparation for the last chapter without you

Post by Jerry476 »

Bogleheads, what have you done to prepare your spouse/significant other for the time when you won’t be there to make financial decisions? I’m 74 and my wife is 69. It would be stretch to say that she’s mildly interested in our IRA’s and other monetary holdings. At this time, we are both 60% VITSAX and 40% VBILX. Our grandsons’ education money (middle and high school) is in Vanguard CA Intermediate Tax Exempt, Vanguard Short-term Bond Index and cash, as well as Vanguard self-propelled 529’s. Every year, I transfer a chunk of bond money into cash to pay for tuition. My plan is to keep breathing for at least 8 years in order to manage the boys’ money. I guess I have to teach grandma how to be a money manager. When I tell her of changes I’ve made, she laughs and says, “That’s what I would have done, too.” I can’t see her rebalancing on her own or making other moves. I’m thinking of moving the IRA’s eventually into Vanguard Balanced. It would be very simple and straightforward and I think Jack would approve. Thoughts?
brad.clarkston
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Re: Preparation for the last chapter without you

Post by brad.clarkston »

Nothing wrong with that approach, no downside that I can think of.
retired@50
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Re: Preparation for the last chapter without you

Post by retired@50 »

A balanced fund, Vanguard LifeStrategy Funds, or Target Retirement Income fund are all decent choices if you're looking for one-fund simplicity. Pick one that has an asset allocation that suits your needs and make withdrawals as required per the RMD schedule.

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This is one person's opinion. Nothing more.
otinkyad
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Re: Preparation for the last chapter without you

Post by otinkyad »

My IPS has a statement suggesting moving everything in our IRAs to a single fund (currently a Vanguard Target Retirement find). I was also thinking about drafting a list of things not to do (such as whole, variable, or universal life), and behavioral issues, and well-meant (or not) advice. So now I’m thinking about saying, yes, I know about tax-efficient placement, Roth conversion ladders, Roth conversions to avoid RMDs, whatever list I can come up with, but they’re just not worth doing to optimize a good plan, and risk doing something you don’t understand. Similar to longinvest’s “good enough” market portfolio, maybe there is a “good enough” sandbox for retirement withdrawals.
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LilyFleur
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Re: Preparation for the last chapter without you

Post by LilyFleur »

I think the wild card is how a new widow who is very vulnerable in her grief would respond to someone from church or another trusted institution coming alongside her to help her manage her money. I think women in very traditional marriages who have never managed money are particularly vulnerable. If you put everything into one fund, the withdrawals will not be optimal, anyway. I am a single woman, but I will not be taking withdrawals from my equities in a bad year for the market. With a single fund, you don't have the option of spending from whatever is most optimal: cash, or from a bond index fund or a stock index fund depending upon market conditions.

The cost of a fiduciary advisor at 1% a year would be a drop in the bucket compared to the front load fees and high expense ratios at Edward Jones or worse, a wolf parading in sheep's clothing fleecing the vulnerable. If you and she selected an advisor together, she could rest assured that she was taken care of, even though you were no longer by her side.
Money_Badger
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Re: Preparation for the last chapter without you

Post by Money_Badger »

LilyFleur wrote: Tue Sep 15, 2020 2:23 am I think the wild card is how a new widow who is very vulnerable in her grief would respond to someone from church or another trusted institution coming alongside her to help her manage her money. I think women in very traditional marriages who have never managed money are particularly vulnerable. If you put everything into one fund, the withdrawals will not be optimal, anyway. I am a single woman, but I will not be taking withdrawals from my equities in a bad year for the market. With a single fund, you don't have the option of spending from whatever is most optimal: cash, or from a bond index fund or a stock index fund depending upon market conditions.

The cost of a fiduciary advisor at 1% a year would be a drop in the bucket compared to the front load fees and high expense ratios at Edward Jones or worse, a wolf parading in sheep's clothing fleecing the vulnerable. If you and she selected an advisor together, she could rest assured that she was taken care of, even though you were no longer by her side.
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RadAudit
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Re: Preparation for the last chapter without you

Post by RadAudit »

I'm 73 and DW is 69. I came to the realization that once I'm gone, I have no control over how much she'll spend, how fast she'll spend it, and what or whom she'll spend it on or with. I won't know her RMDs, her SWRs, the AA she wants to use, or the rate of return she'll use to estimate portfolio income. I left her a note in my IPS to post her questions on BH or call VG's PAS. Left her a few links to the wiki - inheriting a windfall, getting started - asking questions, writing an IPS. Additionally, I've been sending info to the kids that says the same thing about how to handle Mom, when I'm gone. Hopefully, they'll remember and follow the advice for her.

Now to be fair, for the first time in 47 years, she did ask what she was suppose to do when I died. (I suggested throwing a really good party. She deserves it.) We've tentatively planned a meeting to discuss - if her schedule permits. :oops:
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.
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WoodSpinner
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Re: Preparation for the last chapter without you

Post by WoodSpinner »

OP,

We wrote a Retirement Policy Statement to help with this phase. It includes info in all the accounts, plans for SS, Medicare, Beneficiaries, locations of key documents, passwords, Estate Plan strategies and our Investment Policy Statement. Updated yearly and proofread by my DW. We are also interviewing Fee Only Financial Planners so she will have some support if I go first.

WoodSpinner
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ruralavalon
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Re: Preparation for the last chapter without you

Post by ruralavalon »

Jerry476 wrote: Mon Sep 14, 2020 11:41 pm Bogleheads, what have you done to prepare your spouse/significant other for the time when you won’t be there to make financial decisions? I’m 74 and my wife is 69. It would be stretch to say that she’s mildly interested in our IRA’s and other monetary holdings. At this time, we are both 60% VITSAX and 40% VBILX. Our grandsons’ education money (middle and high school) is in Vanguard CA Intermediate Tax Exempt, Vanguard Short-term Bond Index and cash, as well as Vanguard self-propelled 529’s. Every year, I transfer a chunk of bond money into cash to pay for tuition. My plan is to keep breathing for at least 8 years in order to manage the boys’ money. I guess I have to teach grandma how to be a money manager. When I tell her of changes I’ve made, she laughs and says, “That’s what I would have done, too.” I can’t see her rebalancing on her own or making other moves. I’m thinking of moving the IRA’s eventually into Vanguard Balanced. It would be very simple and straightforward and I think Jack would approve. Thoughts?
We are both age 75, for the same reason I am also thinking of switching to a one fund portfolio using only Vanguard Balanced Index Fund (VBIAX).

I have prepared a one page investment policy statement, with a section on things not to do. I have also prepared a list of things to do, and have listed contact information for Vanguard, our CPA and attorney, and passwords.

We have wills, durable powers of attorney for health care, and durable powers of attorney for property. We own our home in joint tenancy with right of survivorship.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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TomatoTomahto
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Re: Preparation for the last chapter without you

Post by TomatoTomahto »

LilyFleur wrote: Tue Sep 15, 2020 2:23 am I think the wild card is how a new widow who is very vulnerable in her grief would respond to someone from church or another trusted institution coming alongside her to help her manage her money. I think women in very traditional marriages who have never managed money are particularly vulnerable.
There’s still time to make OP’s marriage a bit less traditional. :D

My wife has no interest in our finances, the better to sustain the illusion that she should continue to work. Her eyes roll back in her head when I give her the “state of the budget” talk. That said, I’m sure that she will do fine when the time comes, but only because there was a time when she handled her own finances.

OP, it might not be something you want to do, or something she will embrace, but it is important that she handle (Or co-handle) the finances for a while. It’s a responsibility. Just like parents have responsibilities that sometimes might not go over well with their kids, husbands and wives have responsibilities to bring their SO up to speed that might not go over well with their spouse. It’s fine if I can’t cook as well as my wife (I’m charitable; I’m actually the cook), but I should be able to scramble an egg.
Last edited by TomatoTomahto on Tue Sep 15, 2020 11:42 am, edited 1 time in total.
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123
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Re: Preparation for the last chapter without you

Post by 123 »

The best option is like a single fund, typically a fund-of-funds. My spouse has no interest in investments or finance. Our traditional IRA accounts have been converted to a Vanguard LifeStrategy fund that matches our asset allocation. There are other options like Vanguard Balanced VBIAX that could work as well. A single holding in an account makes it appear much simpler and easier to manage to anyone.
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Topic Author
Jerry476
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Joined: Sun Jul 31, 2016 3:29 pm

Re: Preparation for the last chapter without you

Post by Jerry476 »

Thanks everybody for your input. Very much appreciated.
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