cheese_breath wrote: ↑
Tue Feb 12, 2019 2:27 pm
Using a three fund portfolio doesn't require any skill.
Ah, but it does require skills, as do other simple plans. I'm not picking on you, Cheesebreath, but on the general idea several have expressed that folks will be fine with a simple plan, and/or will know when they are having trouble. (And I do agree that simpler plans are better and easier to manage than complex ones - no argument there.)
The investor needs to remember all sorts of things - which company holds my investments? How much do I withdraw and when (automatic or manual, from which stocks, bonds, or CDs, etc)? Did I take my RMD already this year? Which papers are important to keep for tax preparation? Which company is my bank? How do I pay my bills? (Autopay helps, but isn't foolproof, it still needs some monitoring of account balances and checking that things are coming and going from the account appropriately. And autopay doesn't work for everything.) Is the person on the phone really from my bank, or a scammer? Did I call them, or did they call me? What is my account number, where do I find the paper that has that on it? Who else has permission to access my accounts (e.g. family members on joint accounts, people with a POA, etc)? Should I sign this paperwork that is in front of me? Who called earlier today?
Believe it or not, the ability to keep track of such basic things can slip without the person even really realizing they are having trouble. I have seen it happen. These folks seemed to still be functioning pretty well, but if you watched more closely, they were having difficulty keeping things straight that used to be no issue for them. Later as things became worse, it was more obvious to observers. But even when things are more advanced, the person with memory loss or dementia doesn't always remember that they have issues remembering things, or else can't think straight enough to realize they aren't thinking straight.
Dementia varies quite a bit, and can come on subtly or not so subtly. The person may realize they are having trouble, or not. And it won't happen to everyone. But it is common enough in people as they get older, that it is good to have a plan in place, just in case.
If it's an option, having one or more (younger) trusted family members involved in one's finances so they are able to learn the ropes before it is needed, and are available to step in and assist or take over later if needed (with appropriate agent authority, POA, joint accounts, etc as needed) can be a big help. Of course, this requires a lot of trust with the family member(s). If trusted family members aren't available, I'm not sure what good options are available, I'm interested to read other possible solutions to this issue.