Financial Planner - Spouse has no interest in investments

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diy60
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Financial Planner - Spouse has no interest in investments

Post by diy60 »

Looking for some advice from those in my situation.

Married couple for 30 years, both 60, my spouse quit work a few years ago, I'm a few months away from retirement. I've managed our investments for our entire married life. My spouse has no knowledge in investments and related matters, and has no interest. Not a dig, just a fact, plain and simple.

Coming up on retirement it spooked me what would happen if I pass first. It's been near impossible for me to keep up with so many different strategies on SS, RMDs, taxes, etc., I can only imagine it would be even more difficult for my spouse.

Most of my work colleagues recommend the same two or three financial planners. After discussing with my spouse we picked one and moved about $700K over to them. They charge 1%, and most of their funds are in the 1% management fee range. In comparison, I have another $1,300K in a company 401K that has about 12 index funds that average 0.07% in management fees. I can leave it there when I retire.

I've been unhappy with the $700K move. Returns are lower (no surprise there), fund management fees are needlessly high, and it bugs the heck out of me to spend $7,000 in fees on something that I've been doing okay on for 30 years. But I just don't know how to approach this differently with any level of comfort. My spouse agrees there is a certain value in going to the financial planner if something happens to me in order to discuss SS strategy, taxes, medicare, etc., but also knows I'm unhappy and is willing to figure out another approach. Spreadsheets, work sessions, financial books, etc just isn't going to happen.

Any ideas?
Gill
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Re: Financial Planner - Spouse has no interest in investments

Post by Gill »

How about a revocable living trust with yourself as trustee and a corporate trustee named as your successor.
Gill
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LAlearning
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Re: Financial Planner - Spouse has no interest in investments

Post by LAlearning »

Gill wrote:How about a revocable living trust with yourself as trustee and a corporate trustee named as your successor.
Gill
Sounds expensive...
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sport
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Re: Financial Planner - Spouse has no interest in investments

Post by sport »

I would suggest Vanguard's Personal Advisor Service (PAS). They will charge 0.3% to manage the account and they will put you in very low cost funds. You would also not have to worry about them selling your surviving spouse any expensive investments such as variable annuities.
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arcticpineapplecorp.
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Re: Financial Planner - Spouse has no interest in investments

Post by arcticpineapplecorp. »

sport wrote:I would suggest Vanguard's Personal Advisor Service (PAS). They will charge 0.3% to manage the account and they will put you in very low cost funds. You would also not have to worry about them selling your surviving spouse any expensive investments such as variable annuities.
I second this advice. Think what you'd be saving by paying 0.3% instead of 1% per year AUM. Don't know what you'd be saving? Look below to see what you stand to lose over the next 30 years:

Vanguard's PAS costing 0.3% a year will cost you to hand over a little more than 7% of your wealth over 30 years, but paying 1% a year will cost you around 26% of your wealth over the next 30 years. Jack Bogle and Vanguard says "The less you pay, the more you keep." The choice is yours.

Image

http://vanguardblog.com/2011/10/28/stop ... f-returns/

here's a link to Vanguard's personal advisory service (full disclosure, I invest with Vanguard but do not benefit in any way by recommending them. I'm not a Vanguard employee):

https://investor.vanguard.com/advice/personal-advisor
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Re: Financial Planner - Spouse has no interest in investments

Post by Jack FFR1846 »

My wife knows where the Fidelity office is. We've even been there once. No financial planner, no reason to ever screw around with the funds I chose. None of my funds are anywhere near as high as 0.2%.
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sport
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Re: Financial Planner - Spouse has no interest in investments

Post by sport »

arcticpineapplecorp. wrote:Vanguard's PAS costing 0.3% a year will cost you to hand over a little more than 7% of your wealth over 30 years, but paying 1% a year will cost you around 26% of your wealth over the next 30 years.
It's even worse than that. There is also the expense ratio. OP says his current funds are in the 1% range. At Vanguard they will be 0.05 to 0.20 range. So, that is an additional difference of about 0.85%. If you add it all up, OP is paying about 2% now and at Vanguard it would be about 0.45%. That is a difference of 1.55%, more or less.
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diy60
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Re: Financial Planner - Spouse has no interest in investments

Post by diy60 »

sport wrote:
I would suggest Vanguard's Personal Advisor Service (PAS). They will charge 0.3% to manage the account and they will put you in very low cost funds. You would also not have to worry about them selling your surviving spouse any expensive investments such as variable annuities.

arcticpineapplecorp wrote:
I second this advice. Think what you'd be saving by paying 0.3% instead of 1% per year AUM. Don't know what you'd be saving? Look below to see what you stand to lose over the next 30 years:
Wow, great and expedient responses.

I've been a boglehead for 35 yrs without really knowing it. I've been investing in no load, low fee, index funds since 1980. Yep, I'm well aware of the costs of an advisor. I've only been at the advisor 1 year, and I'm miserable. I was at Fidelity for decades. I'm thinking they may have a similar service but I feel dumb I never looked into it. It may even be free with assets over a certain amount. But tell me, does Vanguard PAS also address SS, taxes, RMDs, Medicare, etc.? Heck, I'm just now learning about HAS plans, ACA, Medicare sign up dates and penalties, and the list goes on. Maybe the PAS and a fee for service tax accountant is the way to go? Keep the ideas coming. My interest is high. I need to bail on the planner approach, but it's got to be somewhat autopilot for my spouse.
Northern Flicker
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Re: Financial Planner - Spouse has no interest in investments

Post by Northern Flicker »

Move all assets to Vanguard. In taxable account, hold vtsax (total US stock) and vtiax (total intl stock). In the IRA created by rolling over your 401K, hold Target Retirement Income. Overall allocation will be about 50% stock, and Vanguard will rebalance the TR income fund for you.

Set taxable account distributions to deposit automatically in a checking account. Then, it should be easy to manage this with only one fund in the IRA from which to take IRA withdrawals. If you want a lower overall stock allocation, use LifeStrategy Income or a bond fund like vbtlx or vbilx in the IRA, but be sure the IRA has just one fund.

At flagship level you get one free session per year with a Vanguard financial planner. Set this up every November whether needed or not, and include your spouse in the meeting. If you are gone, your spouse will be able to continue these annual meetings to manage RMDs, IRA withdrawals, and a possible eventual shift of the IRA to a bond fund if the portfolio becomes too stock-heavy after RMDs. Include your spouse in annual meetings with a CPA as well for taxes even if you do taxes yourself now.
Last edited by Northern Flicker on Sun Oct 23, 2016 12:45 pm, edited 1 time in total.
mouses
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Re: Financial Planner - Spouse has no interest in investments

Post by mouses »

You have enough money that unless you're really burning through it, you should not (heresy) have to be in the stock market.

If I were in this situation, I'd sit down with the spouse and one written page each on Social Security, RMDs, etc. They are really not rocket science. You can explain how to calculate RMDs and show the spouse where to find the tables in about fifteen minutes, I would say. Similarly, Social Security should be straightforward.

I know the spouse is not interested, but it's not climbing mount everest we're talking about here, it's a simple responsibility, like locking the house up. If you go over it with the spouse yearly and keep your savings in CDs, there should be no need to mess with financial advisors.

You do need a good, honest CPA, which you may already have, for tax returns.
JoinToday
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Re: Financial Planner - Spouse has no interest in investments

Post by JoinToday »

mouses wrote:You have enough money that unless you're really burning through it, you should not (heresy) have to be in the stock market.

If I were in this situation, I'd sit down with the spouse and one written page each on Social Security, RMDs, etc. They are really not rocket science. You can explain how to calculate RMDs and show the spouse where to find the tables in about fifteen minutes, I would say. Similarly, Social Security should be straightforward.

I know the spouse is not interested, but it's not climbing mount everest we're talking about here, it's a simple responsibility, like locking the house up. If you go over it with the spouse yearly and keep your savings in CDs, there should be no need to mess with financial advisors.

You do need a good, honest CPA, which you may already have, for tax returns.
I like mouses's advice here. One page per subject to point her in the right direction. But I need to expand on what mouses wrote with respect to RMD's. Fidelity/Vanguard will automatically transfer the correct amount to your checking account/after tax account. So your wife really doesn't have to know the mechanics of calculating RMD, just to contact the 401k provider & Fidelity/Vanguard so the RMDs are automatically calculated & distributed.

I would also add a page on what not to do: Don't use a financial advisor charging 0.7% - 1% AUM, or funds that are greater than 0.25% ER. I would turn over in my grave if I learned my wife of child was getting jacked to the tune of 2% AUM.

I do Roth conversions that will (hopefully) reduce my future tax burden. I do tax loss harvesting. I do my own taxes. But the reality is that the extra stuff I do is in the noise compared to the fees a salesman financial planner would charge. Take care of the big stuff, transition your investments to an easy to manage portfolio (3 fund portfolio or all in one fund from Vanguard), and don't worry about the little things.

Good advice from previous posters.
I wish I had learned about index funds 25 years ago
mouses
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Re: Financial Planner - Spouse has no interest in investments

Post by mouses »

JoinToday wrote: But I need to expand on what mouses wrote with respect to RMD's. Fidelity/Vanguard will automatically transfer the correct amount to your checking account/after tax account. So your wife really doesn't have to know the mechanics of calculating RMD, just to contact the 401k provider & Fidelity/Vanguard so the RMDs are automatically calculated & distributed.
I have several such accounts. They could have each do a distribution, and that would be simpler for the OP's spouse than what I do which is taking the entire RMD from the lowest earning account, yes.

By the way, my experience with credit unIons and banks is that is the individual is over 70 1/2 there is no early withdrawal penalty for taking money out of Trad IRA CDs. The OP would have to verify that.
Last edited by mouses on Sun Oct 23, 2016 6:39 am, edited 1 time in total.
mptfan
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Re: Financial Planner - Spouse has no interest in investments

Post by mptfan »

JoinToday wrote:One page per subject to point her in the right direction.
The OP did not identify the gender of his or her spouse.
Gill
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Re: Financial Planner - Spouse has no interest in investments

Post by Gill »

LAlearning wrote:
Gill wrote:How about a revocable living trust with yourself as trustee and a corporate trustee named as your successor.
Gill
Sounds expensive...
You might find it's well worth it compared to some of the suggestions above.
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Re: Financial Planner - Spouse has no interest in investments

Post by sschullo »

LAlearning wrote:
Gill wrote:How about a revocable living trust with yourself as trustee and a corporate trustee named as your successor.
Gill
Sounds expensive...
No. Get some quotes. Mine cost about $1900 with an attorney who knows estate planning, and California laws. But like you, I know where the money is going and manage a portfolio.

Once in a while I attended these financial presentations with a free meal. The room is full of widows, totally vulnerable to the annuity sharks. You are spot on to be concerned about your spouse. She will get a rude awaking if something happens to you. Get this done ASAP. My spouse died shocking and suddenly one year ago, and he was 74 in good health. But we had everything planned and both of us managed our portfolio, so your problem was not an issue for us.
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NotWhoYouThink
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Re: Financial Planner - Spouse has no interest in investments

Post by NotWhoYouThink »

You said you wanted a financial planner, but you hired an investment manager instead. That was never going to work.

You mention SS planning, medicare planning, and tax planning. So do your planning, and write down the plan. Your spouse does not have to verify the derivation of your formulas, just follow the plan. Retire at age 6X, start taking your pension if you have one at age 6Y, sign up for medicare at age 65, with a recommended plan, to be updated as the insurance market changes, start collecting SS at age 70, start taking RMDs at age 70.5, etc. Most of this you already know or can figure out.

The investment management part is even easier. You make a plan for what the funds should be, at Vanguard if your spouse is ok with doing everything online or over the phone, or maybe at Fidelity or Schwab if your spouse really needs to see a human in person. Two or three funds should do it, decide and be done with it.

If you plan to leave your money in your work accounts, I assume that means you don't plan to do Roth conversions, but you can decide that, then do it, then be done with it.

Your spouse does not have to do the calculations and make the decisions. If that is your job in the family, you should do it, put it in place, and write it down in a simple document. If you can't write it down in a simple document you haven't done it right.

Do you do your own taxes? Do you have a CPA you like? It seems like all you spouse will need is a CPA for taxes at most once you do your job. Should be cheaper than the $14K (AUM +ER) you are paying now per year.
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Re: Financial Planner - Spouse has no interest in investments

Post by gasdoc »

Vanguard and a good CPA.

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Re: Financial Planner - Spouse has no interest in investments

Post by schachtw »

My situation is very similar. My wife is not financially savvy, and really doesn't have much interest in it.

I have all Vanguard ETF's and funds that I used to manage myself. We retired last year, and for peace of mind, we signed up for Vanguards PAS service.

Our portfolio structure, AA and asset location didn't vary much, but in event something happens to me I won't have to worry about my wife managing our money.

Currently, I could easily manage this myself without paying .3% per year, but I look at this as insurance.

Wayne
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Re: Financial Planner - Spouse has no interest in investments

Post by dbr »

Is there any possibility you have children, one of whom can help your wife?
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Re: Financial Planner - Spouse has no interest in investments

Post by miamivice »

Just out of curiosity, couldn't you put all of your 700k into two funds, Vanguard Total Stock Market Index and Vanguard Bond Fund (not the exact name, but they have a general bond fund, and tell your wife that she can spend 4% of the amount that is in the two combined funds for the rest of her life, in the event you passed? All you would have to do is decide the percentage in bond versus percentage in stock.

Perhaps I'm making it sound simple, but I think it could be made as simple as that and still get reasonable returns.

It's probably what I'll do when the time comes. The hardest part for my spouse will be figuring out how to setup automatic disbursements into her checking account.

To some extend, you should ask your wife what her financial goals are....if she simply wants to live happily, her SS strategy might be as simple as initiate SS. Her goals may not be to maximize money but rather to simply live life and to spend little time fretting over finances....
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Re: Financial Planner - Spouse has no interest in investments

Post by JW-Retired »

diy60 wrote: I've been unhappy with the $700K move. Returns are lower (no surprise there), fund management fees are needlessly high, and it bugs the heck out of me to spend $7,000 in fees on something that I've been doing okay on for 30 years. But I just don't know how to approach this differently with any level of comfort. My spouse agrees there is a certain value in going to the financial planner if something happens to me in order to discuss SS strategy, taxes, medicare, etc., but also knows I'm unhappy and is willing to figure out another approach. Spreadsheets, work sessions, financial books, etc just isn't going to happen.
As others pointed out, it's currently more like $12,000 in extra fees when you count the higher mutual funds ER. I sure wouldn't saddle my dear wife with that. Also, the 401k can't stay where it is when you die, so that high fee amount is going to roughly triple when your 401k gets rolled into an inherited IRA. What do you imagine the FA is going to recommend she invest it in? :oops:

I agree with others that your wife will be far far safer if you use Vanguard PAS so she naturally will go to them for advice. It will be easy for her to rollover the 401k to a VG inherited IRA.

Just leave your wife a note with whatever you recommend doing. Drag her through it now, but if her eyes glaze over early on it won't matter. She will find it when the time comes.
JW
ps: I see you are pretty new here with 13 posts. A good primer is an ultra short book by William Bernstein. Suggest you read the "Hurdle Number Five" section about investment advisers. A free PDF is here......... https://www.etf.com/docs/IfYouCan.pdf
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Re: Financial Planner - Spouse has no interest in investments

Post by sambb »

Move to fidelity with local office
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Re: Financial Planner - Spouse has no interest in investments

Post by joebh »

diy60 wrote:I've been unhappy with the $700K move. Returns are lower (no surprise there), fund management fees are needlessly high, and it bugs the heck out of me to spend $7,000 in fees on something that I've been doing okay on for 30 years. But I just don't know how to approach this differently with any level of comfort. My spouse agrees there is a certain value in going to the financial planner if something happens to me in order to discuss SS strategy, taxes, medicare, etc., but also knows I'm unhappy and is willing to figure out another approach. Spreadsheets, work sessions, financial books, etc just isn't going to happen.
If the whole point of the $700k move was to provide financial advice for your wife in case of your passing, then consider the fees the cost of that help. I think you need to find an advisor who makes your wife happy and doesn't make you too unhappy. If this one isn't the right one, you simply need to find another, and keep looking until you find a happy compromise.

Perhaps you could find a new advisor or service, and just move the minimal amount it would take to open an account? Give it a year or two to decide is this is the right "future home" for your wife's assets or not. Repeat until you fund a happy landing spot. Make sure your wife actively meets with, and discusses all interactions with the new advisor (after all, that's what must happen when you are gone).

Meanwhile, you continue to manage the vast majority of your assets, and instruct that they be transferred to the advisor upon your death.
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Re: Financial Planner - Spouse has no interest in investments

Post by leonard »

In cases where a person has no interest in managing investments - even a simple 3 or 4 fund BH portfolio - I think it's worth trading off some tax efficiency to get simplicity.

A 2 fund portfolio - one fund for all taxable (Tax managed balanced or TR or Life Strategy, depending on the anticipated tax bracket(s) through the life of the portfolio) investments and one fund in all tax advantaged (TR or Lifestrategy). At this point, making such a drastic change in the portfolio would depend a lot on tax implications for taxable investments. But, it might be worth considering depending on your situation.

Such a portfolio would be very easy to manage. Investments only go in one of 2 funds. The only learning would be how to take money from the portfolio during retirement.

And, yes, as stated above - I realize this does not optimize tax efficiency.

But, for someone who doesn't want to learn the details, prioritizing simplicity over tax efficiency (and avoiding paid advisors) may be the lowest cost solution overall.
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JoinToday
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Re: Financial Planner - Spouse has no interest in investments

Post by JoinToday »

mptfan wrote:
JoinToday wrote:One page per subject to point her in the right direction.
The OP did not identify the gender of his or her spouse.
And the relevance of this is what?

Advice stands as correct regardless of whether the spouse is a husband or wife. One page per subject is also good for significant other, children, friend, etc.
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Re: Financial Planner - Spouse has no interest in investments

Post by Capsu78 »

I would ditch the FA and pick a "Fee Only" planner who both you and your wife likes. Someone who would be a trusted advisor in the event of your demise. I found one early this year mostly because we are on final approach to our accumulation years if we both want to stop working, but still have time to make some adjustments.
What our guy said is his fee usually saves his clients more than his fees, but in our case it didn't...because we already had moved the majority of our investments to Fidelity and VG. I wasn't looking for that anyway as I just wanted to put a seasoned second set of eyes on my AA etc. He came back with his "for fee" reporting and for the most part he said "nice work", and recommended only specific tweaks.
What I like about him is I can call him and say "this is what I am thinking" and he will say "I have a short answer for you at no fee and a longer one for fee if we think you need it". His short answer is "This is what is good about what your thinking and this is what is ungood". If I am comfortable to move something since he doesn't see and real red flags gives me piece of mind that no FA will ever give me. I intend to involve him at every big decision- pension and SS claiming startegies, replacing my wife with a younger model etc! ( Very, very ungood, Capsu )

This is the search engine I used to find him: http://www.napfa.org/
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Re: Financial Planner - Spouse has no interest in investments

Post by DoTheMath »

JoinToday wrote:
mptfan wrote:
JoinToday wrote:One page per subject to point her in the right direction.
The OP did not identify the gender of his or her spouse.
And the relevance of this is what?

Advice stands as correct regardless of whether the spouse is a husband or wife. One page per subject is also good for significant other, children, friend, etc.
The relevance is that it is good to be reminded to not make assumptions about the OP. If we were to infer anything about the OP and gender, it is that the OP is deliberately *not* making gender part of the discussion. This is something which should be respected.

Otherwise, I agree with the general advice. Vanguards advisory service or similar along with a brief, bullet-point style document laying out the key information and instructions could be a good option.
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dbr
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Re: Financial Planner - Spouse has no interest in investments

Post by dbr »

An important issue which a neither a planner nor an advisor would address is points of simple mechanics. What are the accounts that exist, whose name are they in, how does one gain access to them, what are all the credit cards "we" are signed up for, what are all the bills we get each month and how are they paid, etc., etc., etc. That includes where is access to SS and Medicare online, what is our insurance coverage and who does one contact. In this day and age of electronic access the result for the survivor can be daunting. I cannot say we have completely resolved how to manage this.
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Re: Financial Planner - Spouse has no interest in investments

Post by prudent »

I have accepted that my spouse will need to work with an planner for the same reasons as the OP, and yes, it's going to cost. I cannot assume that telling her to follow my plan will be good advice given that the world changes over time. What makes sense today might be stupid 5, 10, 15 years after my demise, particularly if tax laws change.

The important thing to me is that she will be comfortable with the fee-only planner we have selected. The only thing she needs to monitor is that a year's worth of fees should cost less than X% of the assets. We're paying every couple years for a "financial review" that we really don't need, but the cost is not prohibitive and it makes her feel comfortable that if the time comes when she's on her own, she already has somewhat of a relationship with the firm. It would not be ideal to expect her to seek someone out from scratch on her own.
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Re: Financial Planner - Spouse has no interest in investments

Post by Sandi_k »

dbr wrote:An important issue which a neither a planner nor an advisor would address is points of simple mechanics. What are the accounts that exist, whose name are they in, how does one gain access to them, what are all the credit cards "we" are signed up for, what are all the bills we get each month and how are they paid, etc., etc., etc. That includes where is access to SS and Medicare online, what is our insurance coverage and who does one contact. In this day and age of electronic access the result for the survivor can be daunting. I cannot say we have completely resolved how to manage this.
We have an MSWord file on the desktop of my computer - What to Do In Case of Death. It's about 20 pages, and lists all accounts, contact info, burial wishes, obit plans, etc.

We also have a master password document that is locked up in the gun safe. This will allow DH to pay the bills should I go first. :D
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celia
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Re: Financial Planner - Spouse has no interest in investments

Post by celia »

I agree with NotWhoYouThink, except that you don't need a CPA. You need a tax preparer instead.

We have a complete list of assets for my spouse which I update with current balances at the end of each year. There are notes on it as to which accounts to use up first (income sources, for us), second, and last (Roths, for us). He often asks for written clarification of things, so I update it so it makes sense to HIM. We go over it twice a year and I am "too busy" at least once a year to pay bills so ask him to do it. He knows where things are kept (in the house and in the investment houses). It all has to make sense to HIM or it is useless for survivor support.
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diy60
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Re: Financial Planner - Spouse has no interest in investments

Post by diy60 »

OP here.

Spouse and I agreed to consider a fee for service approach. The financial planner is highly recommend from fellow MegaCorp collegues and I believe they do fee for service as well.

Spouse and I had considerable discussion on creating simplicity.

How do you make something like the following simple? I see a few obvious things to consolidate, but I'm still looking at about 7 different accounts when finished.

Spouse beneficiary accounts: tIRA, Roth, 401K
My beneficiary accounts: 2 tIRAs, Roth, 401K, HSA, Investment Firm for my RSUs, and a small pension when I retire soon
JTWROS accounts: Savings & checking, Brokerage account (my mad money)

All accounts are either "with beneficiary" or "jt with rights of survivorship". House deed and cars as well. Probate would be avoided for all assets, so spouse and I both agree a trust is not necessary while we are both alive.

We recently executed new will, durable power of attorney, durable power of health attorney, living will, and organ donor documents (best $600 we ever spent).
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Re: Financial Planner - Spouse has no interest in investments

Post by sport »

Capsu78 wrote:I would ditch the FA and pick a "Fee Only" planner who both you and your wife likes. Someone who would be a trusted advisor in the event of your demise. I found one early this year mostly because we are on final approach to our accumulation years if we both want to stop working, but still have time to make some adjustments.
What our guy said is his fee usually saves his clients more than his fees, but in our case it didn't...because we already had moved the majority of our investments to Fidelity and VG. I wasn't looking for that anyway as I just wanted to put a seasoned second set of eyes on my AA etc. He came back with his "for fee" reporting and for the most part he said "nice work", and recommended only specific tweaks.
What I like about him is I can call him and say "this is what I am thinking" and he will say "I have a short answer for you at no fee and a longer one for fee if we think you need it". His short answer is "This is what is good about what your thinking and this is what is ungood". If I am comfortable to move something since he doesn't see and real red flags gives me piece of mind that no FA will ever give me. I intend to involve him at every big decision- pension and SS claiming startegies, replacing my wife with a younger model etc! ( Very, very ungood, Capsu )

This is the search engine I used to find him: http://www.napfa.org/
I would think that using a "guy" to help a surviving spouse might not be the ideal solution. What happens if the "guy" retires or dies after you do? Your spouse would then have the task of finding a replacement. This is not a good task for someone who really needs advice. IMO, you would do better with a corporate advisor who is sure to be around as long as you and your spouse need them.
NotWhoYouThink
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Re: Financial Planner - Spouse has no interest in investments

Post by NotWhoYouThink »

The financial planner is highly recommend from fellow MegaCorp collegues and I believe they do fee for service as well.
Unfortunately, "highly recommended by friends" is worth approximately nothing. Most people don't understand investing, and will enthusiastically recommend anyone who says reassuring words to them and makes them feel everything will be ok and is being handled by experts. And most "advisors" with that kind of people skill are good at recruiting clients and terrible at managing their money. They don't necessarily want to be terrible, they just don't know better. So forget the recommendations by friends.

If you want recommendations on what to do with your current accounts and funds, go ahead and post them in the format recommended on the wiki for asking for investment advice. People here can also help with pensions, SS, and taxes if you have questions about that. As a matter of fact, I recommend that you get specific advice on all those issues from this forum before trying to hire someone else. You'll at least be much better informed of what questions to ask.

Two main things to remember:
- With the possible exception of Vanguard Personal Advisory Services, all investment managers are expensive and likely to be somewhere between inept and corrupt. Don't trust them. You can manage your own investments with a little education that you can get on this forum. And you can set your investments on auto-pilot for your spouse. The wisdom you usually see on this forum is that by the time you know enough to know whether your advisor is doing a good job, you don't need an advisor.
- Financial management, including pension, SS, Medicare, RMD planning, taxes, and other issues is complicated and highly dependent on the unique facts surrounding your situation. It will be hard to find someone to help you with this, and the help will be expensive. There are threads on here with people complaining about the prices they pay their attorneys or CPAs, but the fact is that when you need someone to take a careful look at your particular circumstances and make a recommendation, you're going to have to pay for it. If the person is good, your money will be well spent.
LeeMKE
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Re: Financial Planner - Spouse has no interest in investments

Post by LeeMKE »

Here's the good news:

By the time you are 70, all these decisions we talk about here will be made: Social Security, Medicare, ROTH conversions, etc. It will be much simpler for your spouse to manage once you get past this interim period.

I like Fidelity and am organized so my spouse can add their management if he feels he needs it. I know he'll want a local office where he can meet one-on-one with someone, so Fidelity works better for that than Vanguard.

So long as I make it to 70, I'm not too worried about my spouse having to manage the complexity I'm juggling right now. This complexity is short-term.
The mightiest Oak is just a nut who stayed the course.
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celia
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Re: Financial Planner - Spouse has no interest in investments

Post by celia »

sport wrote:I would think that using a "guy" to help a surviving spouse might not be the ideal solution. What happens if the "guy" retires or dies after you do? Your spouse would then have the task of finding a replacement. This is not a good task for someone who really needs advice. IMO, you would do better with a corporate advisor who is sure to be around as long as you and your spouse need them.
I have found that corporate advisors won't necessarily be there for you either. How many banks are gone since 2008?

Our lawyer recommended that after we specify relatives as successor trustees, we select a trust company to follow as "they will always be there". No, they won't.. The relatives are still living at the same addresses, but when I googled the trust company one day, I couldn't find them. They were taken over by another trust company, who themselves were taken over by a third trust company. And I couldn't figure out what happened to them.

Luckily all our kids are adults now and competent enough to be trustees.
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Re: Financial Planner - Spouse has no interest in investments

Post by afan »

Although I am no fan of corporate trustees-they charge far too much for what they do- the point here is that the businesses survive these changes in control. This is especially true if you go with one of the larger organizations. They may get taken over it merge but they do not simply evaporate, the equivalent of an individual dying.

Does anyone know of a case where a large corporate trustee went out of business and stranded the trusts it was serving?
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bostondan
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Re: Financial Planner - Spouse has no interest in investments

Post by bostondan »

Do you have children and are any of them capable of managing the account? Could they do so without doing something inappropriate? If so, consider filling one of them in on all of the details of your financial life.

My father passed away when I was 25. My mother had never deposited a check in her life, let alone managed investments, despite being a high powered executive. She met my father when she was 21 and never had a reason to know anything about the finances because he was so capable.

She asked me to be in charge of the finances. I was capable and willing. I have never even had the slightest thought of doing anything that would negatively affect my mother. My father always kept me informed about his finances, even when I was a teenager. I know many families are not as open about money, but I think that the openness in my family helped me to feel less awkward about money.

Unfortunately, my mother is now nearing death and I will need to take over the financial management of her estate and then help my sister get set up with any inheritance. However, because I was heavily involved in her finances already, it will be a much easier transition.

You could plan to have your wife as a backup if she is capable, but perhaps have a child as a secondary backup as we did in my case. I was happy to do it. It is certainly better than paying a large fee to a management company.

If not, Vanguard PAS seems like a solid backup. Their trust services also seem fairly priced compared to the competition, depending on how much money you have with them.
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Re: Financial Planner - Spouse has no interest in investments

Post by carolinaman »

bostondan wrote:Do you have children and are any of them capable of managing the account? Could they do so without doing something inappropriate? If so, consider filling one of them in on all of the details of your financial life.
This may be a good option if you have children capable and willing to do this for your mother. I am in the same situation as you. My wife has no interest in finances and relies on me. The Vanguard PAS is an option but a child could be better if they are willing to do it. My daughter has a degree in finance and handles most finances for her family. I am 72 and recently went through an investment simplification process of consolidating funds and accounts. My daughter has agreed to do this and will be very capable of handling this upon my death.
mouses
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Re: Financial Planner - Spouse has no interest in investments

Post by mouses »

LeeMKE wrote:Here's the good news:

By the time you are 70, all these decisions we talk about here will be made: Social Security, Medicare, ROTH conversions, etc. It will be much simpler for your spouse to manage once you get past this interim period.
There is one thing about SS that can change, although I don't recall the time frame. My Mom started out taking SS as my Dad's widow, but she kept working. In time, her own benefits would have been greater than what she was getting, but she didn't know that and we kids didn't realize what was going on. Mea culpa. When this came to light, she was able to change to the higher benefit, but was not able to get the money she had lost before that. SS has an immovable policy of not correcting things retroactively, and believe me, we tried, roping in the local congresscritter, etc.
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Re: Financial Planner - Spouse has no interest in investments

Post by dbr »

mouses wrote:
LeeMKE wrote:Here's the good news:

By the time you are 70, all these decisions we talk about here will be made: Social Security, Medicare, ROTH conversions, etc. It will be much simpler for your spouse to manage once you get past this interim period.
There is one thing about SS that can change, although I don't recall the time frame. My Mom started out taking SS as my Dad's widow, but she kept working. In time, her own benefits would have been greater than what she was getting, but she didn't know that and we kids didn't realize what was going on. Mea culpa. When this came to light, she was able to change to the higher benefit, but was not able to get the money she had lost before that. SS has an immovable policy of not correcting things retroactively, and believe me, we tried, roping in the local congresscritter, etc.
In our SS analysis it turns out that my wife gets a tad more if she claims spousal at 66 and her own at 70. I would be surprised if there is a change after 70, but there might somehow be something. I agree with the general idea that by 70 most things are set, but life never stops changing.

I knew someone in their 80's that was all set rolling over T-bills until they stopped managing their affairs properly and ended up eith about half a million in their checking account. That was back when you had to actually mail back a piece of paper to renew the bill. That was also back when banks actually worried about their customers and they called.
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goingup
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Re: Financial Planner - Spouse has no interest in investments

Post by goingup »

leonard wrote:In cases where a person has no interest in managing investments - even a simple 3 or 4 fund BH portfolio - I think it's worth trading off some tax efficiency to get simplicity.

A 2 fund portfolio - one fund for all taxable (Tax managed balanced or TR or Life Strategy, depending on the anticipated tax bracket(s) through the life of the portfolio) investments and one fund in all tax advantaged (TR or Lifestrategy). At this point, making such a drastic change in the portfolio would depend a lot on tax implications for taxable investments. But, it might be worth considering depending on your situation.

Such a portfolio would be very easy to manage. Investments only go in one of 2 funds. The only learning would be how to take money from the portfolio during retirement.

And, yes, as stated above - I realize this does not optimize tax efficiency.

But, for someone who doesn't want to learn the details, prioritizing simplicity over tax efficiency (and avoiding paid advisors) may be the lowest cost solution overall.
Agree with leonard about simplifying. Get your holdings to one administrator. Then use one or two funds. Fidelity or Vanguard can set up the RMDs.

At age 60 I wouldn't be spooked into extreme moves, but start the process of streamlining and simplification. It's so hard for some investors to give up optimization, but simplification is the way to go for disinterested successors.
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1210sda
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Re: Financial Planner - Spouse has no interest in investments

Post by 1210sda »

leonard wrote:In cases where a person has no interest in managing investments - even a simple 3 or 4 fund BH portfolio - I think it's worth trading off some tax efficiency to get simplicity.

A 2 fund portfolio - one fund for all taxable (Tax managed balanced or TR or Life Strategy, depending on the anticipated tax bracket(s) through the life of the portfolio) investments and one fund in all tax advantaged (TR or Lifestrategy). At this point, making such a drastic change in the portfolio would depend a lot on tax implications for taxable investments. But, it might be worth considering depending on your situation.

Such a portfolio would be very easy to manage. Investments only go in one of 2 funds. The only learning would be how to take money from the portfolio during retirement.

And, yes, as stated above - I realize this does not optimize tax efficiency.

But, for someone who doesn't want to learn the details, prioritizing simplicity over tax efficiency (and avoiding paid advisors) may be the lowest cost solution overall.
Totally Agree. You may be losing some tax efficiency, but you're gaining the non-payment of an advisers/planners fee.
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diy60
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Re: Financial Planner - Spouse has no interest in investments

Post by diy60 »

OP here:
Apologize for not responding to all, but there are some common themes . . .
Prudent wrote: I have accepted that my spouse will need to work with an planner for the same reasons as the OP, and yes, it's going to cost. I cannot assume that telling her to follow my plan will be good advice given that the world changes over time. What makes sense today might be stupid 5, 10, 15 years after my demise, particularly if tax laws change.

The important thing to me is that she will be comfortable with the fee-only planner we have selected. The only thing she needs to monitor is that a year's worth of fees should cost less than X% of the assets. We're paying every couple years for a "financial review" that we really don't need, but the cost is not prohibitive and it makes her feel comfortable that if the time comes when she's on her own, she already has somewhat of a relationship with the firm. It would not be ideal to expect her to seek someone out from scratch on her own.
Going to a fee for service planner once every few years is a great compromise. Maybe not needed, but the costs would not be life altering either.
leonard wrote: In cases where a person has no interest in managing investments - even a simple 3 or 4 fund BH portfolio - I think it's worth trading off some tax efficiency to get simplicity.
This is what I am after; simplicity. I managed 15 to 20 different funds in 5 investment firms for about 30+ years. In the end we're not any better off than a 2 fund approach and it was way too much work. I need to consolidate.
articpineapplecorp. wrote: Vanguard's PAS costing 0.3% a year will cost you to hand over a little more than 7% of your wealth over 30 years, but paying 1% a year will cost you around 26% of your wealth over the next 30 years.
I finally put pen to paper, it's an eye opener for sure. Just the summation of the fees is well over $600K in a reasonable retirement period. Adding missed growth opportunity brings the potential cost to twice that or more.
bostondan wrote:
Do you have children and are any of them capable of managing the account? Could they do so without doing something inappropriate? If so, consider filling one of them in on all of the details of your financial life.
This is a very good suggestion, we can make this work.
DoTheMath wrote: The relevance is that it is good to be reminded to not make assumptions about the OP. If we were to infer anything about the OP and gender, it is that the OP is deliberately *not* making gender part of the discussion. This is something which should be respected.
Very astute, it was deliberate.
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