Death of Investment Spouse options

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AmericanRay
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Death of Investment Spouse options

Post by AmericanRay »

I currently manage the investing for my wife and myself. I'm sort of fading - getting old - so, there is a possibility that my wife will end up with that task - around $2 million - she does not even use a computer, so thinking about options for her is on my mind.

Is her only real option to go with an entity like Edward Jones that charges 1-1.5% AUM but does handle everything - advice and trades? I noticed that Vanguard offers personal client services with a charge of only .30% AUM but it appears that that is only for advice not trading. Is that correct? It does appear that Vanguard offers the lowest 'advice' deal but without an execution arrangement, it falls short for my spouse - if that is the case.

Are there any other ways to have someone manage this task at a reasonable cost? Right now, it looks to me like she will just have to pay 1-1.5% but in her case, it may be worth it. I'm just checking to make sure of options to pass on to her.

Thanks in advance.
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CAsage
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Re: Death of Investment Spouse options

Post by CAsage »

Whatever you do, stay the blazes away from Edward Jones at all costs! Vanguard is a good solution, but I have no insight into what trading they want to do (hopefully others do). Who does your tax returns? She will need someone to help with that in the future as well. Any trusted family to help? If you set up something like a single Target retirement fund, you will minimize any "trades" to just determining how much to pull out. You will need to post a bit more about what kind of accounts. RMD on retirement accounts can be automated. Her taxes are likely to change as well, filing single. For now - simplify as much as possible and start a (dreadful title) Death Book for documenting everything - lots of examples on this forum. I have one for my kids, bright color coded folders in front of the file cabinet.
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Mike Scott
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Re: Death of Investment Spouse options

Post by Mike Scott »

Vanguard does the "hands on management" in PAS. You can set up a free appointment to find out what they can do for you. So far, I think it can all be done over the phone.

If in person is needed, check to see if there is a local Fidelity or Schwab office. They will cost more than PAS but should be less than Edward Jones etc.
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Nate79
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Re: Death of Investment Spouse options

Post by Nate79 »

Vanguard PAS service: https://investor.vanguard.com/advice/financial-advisor

Yes, they will fully manage the money that is in Vanguard accounts including trading.
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Wiggums
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Re: Death of Investment Spouse options

Post by Wiggums »

Some brokers like Edward Jones use too many funds with higher (ER) expense ratios. This is in addition to any assets under management fee. This type of arrangement is hard to unwind when in a taxable account. The fees that you will pay or a significant drag on your portfolio. Another concern that I have with Edward Jones is that they will try to sell your wife other “investments” that are not suitable for her and tend to pay a high commission to your EJ sales rep

I agree with the Vanguard PAS type solution with 3-5 funds total. Depending on the tax impact, you can also consider an all in one fund like TDF or lifestrategy fund. I’m a little concerned that your wife doesn’t use the computer. Helpful customer service is a must in your situation.
Investors need to be better informed about the costs they pay. “High fund fees can be hazardous to your wealth in the same way that high calories can be hazardous for your health.”
delamer
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Re: Death of Investment Spouse options

Post by delamer »

Mike Scott wrote: Tue Aug 02, 2022 1:18 pm Vanguard does the "hands on management" in PAS. You can set up a free appointment to find out what they can do for you. So far, I think it can all be done over the phone.

If in person is needed, check to see if there is a local Fidelity or Schwab office. They will cost more than PAS but should be less than Edward Jones etc.
The problem with Vanguard for someone who is computer-illiterate is that all transacting will have to be done over the phone. And Vanguard’s telephone customer service generally does not get high marks. Long wait times, inability to resolve issues in one call, etc.

So I agree with the suggestion to use a local office of a Fidelity or Schwab, if available. They each have a few options for managing a portfolio. You could continue self-managing for now, and then have a contingency plan for when you are no longer willing/able to do so. And you can set up a checking account and credit card with them if you want to consolidate your finances to really simplify things for your wife.
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the_wiki
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Re: Death of Investment Spouse options

Post by the_wiki »

Do you have any children you would trust to take care of this that you could make power of attorney?

If not, well human advisors cost more money, but they provide more service. Most of us here don’t need it, but people like your wife likely will. You may be able to find some cheaper investment management services than EJ at your bank or credit union or at a large brokerage like Schwab with physical branches.
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Nate79
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Re: Death of Investment Spouse options

Post by Nate79 »

There are fiduciary only advisors out there that use index funds. You will pay an AUM, maybe <1% but they would be trustworthy and use a Boglehead's like investment strategy when you don't want to do it yourself.
Topic Author
AmericanRay
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Re: Death of Investment Spouse options

Post by AmericanRay »

Thanks for all -interesting and helpful.

Just a few facts - no local "big" broker offices around here - it's a country setting. No children have survived, no relatives that can help and virtually all of her close friends have passed on. The tax scenario will have to be handled as well - I'm also the tax man.

It seems to me that lots of seniors face the same death of an investment spouse as I do, although hopefully have a family to help.

The bottom line is that I hate to see someone take over who offers nothing valuable in return for the fees - every year. Especially given the fact that senior investment is normally simple, reasonably conservative, and easy to execute. Of course, due diligence is required but spending 20-30 thousand annually is over the top in my view.
Mike Scott
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Re: Death of Investment Spouse options

Post by Mike Scott »

Would this possibly be a case for converting everything into an annuity or looking at a retained life estate with a charity? They may be poor options, but they are options.
delamer
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Re: Death of Investment Spouse option

Post by delamer »

My mother’s finances were managed and invested by the trust department of a local community bank after my father died. Their checking and savings accounts also were held at the bank, so they had a long-time ongoing relationship.

The bank also prepared her annual tax returns (federal & state).

The management fee was about 0.75% per year, paid quarterly. There were more individual stocks in her account than was ideal, but generally they did a solid job. Tax prep was another few hundred dollars.

Perhaps that’s a possibility.

Hopefully, you have had estate planning documents — wills, advance directives, etc. — prepared by an attorney. S/he might have recommendations for trustees.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
joppy
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Re: Death of Investment Spouse options

Post by joppy »

I highly recommend that you set up the investment person and the tax person yourself, while you are still alive. Vet the advisors and build the relationship yourself, and connect your spouse with the advisors. That way, if you pass first, she will not have to figure out how to manage the transitions and not make any big mistakes in the process. Also, if you fade further while you are still alive, you will not make any big mistakes either. Yes, that means you pay the advisor and tax person for a few extra years. You would be paying for insurance to minimize unforced errors, rather than maximizing after-fee returns.
tibbitts
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Re: Death of Investment Spouse options

Post by tibbitts »

Mike Scott wrote: Tue Aug 02, 2022 5:51 pm Would this possibly be a case for converting everything into an annuity or looking at a retained life estate with a charity? They may be poor options, but they are options.
That's not a bad idea although probably not for quite "everything." Maybe the OP can comment on what the plans are for any remaining funds.
Wrench
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Re: Death of Investment Spouse options

Post by Wrench »

My father-in-law recently died, and my mother-in-law (MIL) is in a situation similar to your wife. She never handled any of the finances or taxes in their family. Fortunately for her, she has three children and their spouses that are all helping her. Here are some observations that would have helped her (and us):
1. Simplify, simplify and simplify. The situation will be far more stressful if there are many accounts each of which has multiple holdings (That was my MIL's situation). Ideally, set it up so there are 3 or 4 accounts - a brokerage account, IRA, checking account and savings account. Use the same firm for the brokerage and IRA if at all possible. Set up the brokerage and IRA so there are three funds at most, or even better, one fund like one of the Vanguard Life strategy funds.
2. Establish an income stream with social security, pension, and/or an SPIA (or if you prefer a bond ladder) that will last the rest of her (expected) life and that will meet all her expected expenses.
3. Most important - sit down with her NOW, and go through it with her explaining everything. Have her sit with you when you pay the bills, balance the checkbook, review the investments. This may be hard, but ultimately, it will give you both peace of mind. After you die, she will have to do some of this no matter what so you need to help her prepare for it.
4. Establish a credit card in her name only. If all the credit cards are in your name, after you die, they may cancel them. (She may have a card with her name on your account - that may still be cancelled after you die because you are the account holder). She needs to have some credit on her own. Once she gets it, have her use it, maybe whenever she buys groceries. Then make her responsible for paying it. This is an easy first step for assuming financial responsibilities, and doing it now while you are there to help will make it SO much easier later.
5. Set up a relationship with some sort of advisor so she has someone to help her. Vanguard PAS, or FIdelity or Schwab, or even a fee-only advisor, or someone in the trust department at a local bank. (I agree with previous poster - stay away from Edward Jones or Ameriprise or other AUM advisors!) Same with an accountant. She will need support, and needs to have people to help her (fortunately, in our case that was family) that she knows and trusts.
6. Make sure she knows your estate attorney (presuming you have one) and/or your executor if that is not her. She will need to deal with them to settle the estate unless all your assets have her named as beneficiary and you hold no real estate or other real assets.
7. If she really cannot or does not use a computer, you may want to make sure all statements come to you in paper. (There are potential security issues with this approach, e.g. with losing account numbers with stolen mail, but if she really will not be able to handle electronic statements, then there is not much choice). When they do, go through all the mail with her. It sounds a little silly, but for my MIL getting a lot of mail every day is VERY stressful because it is "one more thing" that has to be dealt with. It very rapidly becomes overwhelming to one not used to it. If you prepare your wife by going through the mail with her, at least she will have a better sense of what she might expect after you are gone.

I wish you the best. These decisions and plans are so difficult. Good luck!

Wrench
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BL
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Re: Death of Investment Spouse options

Post by BL »

What kinds of things do you anticipate needing to get done in "managing"?
RMDs can be automated. Cash can go automatically to your checking account monthly, for example.

No balancing is absolutely required, or you could switch to a balanced fund to have that automatic.

Vanguard PAS could be hired if you feel it is necessary. Ask now what they recommend and think it through. I hear they are sometimes pushing active funds, but that could be turned down. With no family I am thinking: the sooner the better. Get it set up before it is really needed.

Not familiar with trusts, but that could make managing automatic with someone else being trustee.

Our small rural community had free taxes for lower income seniors sponsored by IRS/AARP. That might be worth checking out unless you are high income or complicated taxwise.
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celia
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Re: Death of Investment Spouse options

Post by celia »

joppy wrote: Tue Aug 02, 2022 5:58 pm I highly recommend that you set up the investment person and the tax person yourself, while you are still alive. Vet the advisors and build the relationship yourself, and connect your spouse with the advisors.
I wouldnt select individuals because they can die before you or even retire. You want a company big enough to last at least 40 or 50 years.

I like the annuity option but not putting all your money in at one time. Maybe put in 10% now and again every 5 years. That will leave a chunk for her/your final years in assisted living or a nursing home, if needed.
MathWizard
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Re: Death of Investment Spouse options

Post by MathWizard »

The plan for me is to convert everything to be as simple as possible for both of us.


She'll have an annuity as well as SS benefits, which would handle 60% of the expenses.

The rest will come from Roth and tax deferred accounts.

The plan there is to put 1/4 in a lifestyle fund, the rest into a
60/40 AA with annual rebalancing.
Those funds would send a check for the other 40% into checking and another 20% more into savings for discretionary expenses.

Bills would be on automated bill pay , as most already are now.

If we can get it set up, we'd automate a QCD at the beginning of each year to the church to avoid taxes on that amount, but that is just an additional optimization that isn't necessary.

All this would be set up soon after I turn 70 and claim SS . Then we won't worry about finances anymore .

I do have a son who could take over, but my plan is to make it so simple that the finances run themselves.
palaheel
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Re: Death of Investment Spouse options

Post by palaheel »

Fidelity and Schwab both offer a range of services, from full advisor to hybrid to robo to diy, all at varying price points. I've never asked the question, but that might be a way she could move up and down the service/cost scale as necessary.
Nothing to say, really.
mhalley
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Re: Death of Investment Spouse options

Post by mhalley »

I always told my wife that if I should pass to go with Vanguard PAS. When she decided to divorce me, I repeated the recommendation when she asked me about some local guy who wanted an AUM fee. She has been happy with the service thus far. The problem with Fidelity and Schwab is that they also have high cost services, and it is not unlikely that your wife could be talked into this later. People post all the time about getting called by Fido to talk about getting into a wealth management program.
My ex is a person that had to be put in the chair with the eyelid retractors ala A Clockwork Orange for my 5 minute annual financial update during our marriage. She has absolutley no interest in learning the basics, so she definitely needs help.
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123
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Re: Death of Investment Spouse options

Post by 123 »

Simplify your accounts as much as possible. Use a single fund or ETF for each account, a 100% position. If you need a mix of stocks and bonds in an account or two use a balanced fund or a LifeStrategy fund that has the right mix. Eliminate complex arrangements and pick a good option for each account, your survivors don't need the complexity of a "perfect" solution you may have developed over many years.
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Valuethinker
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Re: Death of Investment Spouse options

Post by Valuethinker »

AmericanRay wrote: Tue Aug 02, 2022 5:28 pm Thanks for all -interesting and helpful.

Just a few facts - no local "big" broker offices around here - it's a country setting. No children have survived, no relatives that can help and virtually all of her close friends have passed on. The tax scenario will have to be handled as well - I'm also the tax man.

It seems to me that lots of seniors face the same death of an investment spouse as I do, although hopefully have a family to help.

The bottom line is that I hate to see someone take over who offers nothing valuable in return for the fees - every year. Especially given the fact that senior investment is normally simple, reasonably conservative, and easy to execute. Of course, due diligence is required but spending 20-30 thousand annually is over the top in my view.
We pay over 1% pa for my mother.

It's not that my brother couldn't do it (given his job and qualifications he'd beat most of the professional managers) but it was the hassle factor, plus Mum needed someone who was polite to her on the phone. She's rather old school that way (and it gets harder to cope the older you get, I find).

One sighs and bites the bullet.

If Fidelity offers good over the phone service (I believe it does) then I would consider them. Or Schwab.

Can your spouse handle online banking?
tibbitts
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Re: Death of Investment Spouse options

Post by tibbitts »

AmericanRay wrote: Tue Aug 02, 2022 1:09 pm ...she does not even use a computer, so thinking about options for her is on my mind.
I haven't exactly been the earliest adopter of technology myself but I think you have to consider someone's ability to function in the world without using a computer (tablet, whatever) for everyday online tasks. The only holdouts I'm aware of have someone else do online tasks for them, and not just related to investing. Eventually of course we all might become computer illiterate so that's really the issue you have to address here, in a much broader sense than just related to investments.
the_wiki
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Re: Death of Investment Spouse options

Post by the_wiki »

Check with your local bank, they often have services for this.
Californiastate
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Re: Death of Investment Spouse options

Post by Californiastate »

In a perfect world, the portfolio will be on automatic and will need minimum trading. In the real world, she'll be stalked by financial managers and will eventually capitulate. You can manage that process by setting it up before your demise. My MIL uses EJ for her extensive portfolio. Yes she pays a AUM fee but ,at this point in her life, it doesn't matter. She's not really paying EJ for growth. She's paying them because it gives her peace of mind that somebody is at the helm.
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Re: Death of Investment Spouse options

Post by ruralavalon »

AmericanRay wrote: Tue Aug 02, 2022 1:09 pm I currently manage the investing for my wife and myself. I'm sort of fading - getting old - so, there is a possibility that my wife will end up with that task - around $2 million - she does not even use a computer, so thinking about options for her is on my mind.

Is her only real option to go with an entity like Edward Jones that charges 1-1.5% AUM but does handle everything - advice and trades? I noticed that Vanguard offers personal client services with a charge of only .30% AUM but it appears that that is only for advice not trading. Is that correct? It does appear that Vanguard offers the lowest 'advice' deal but without an execution arrangement, it falls short for my spouse - if that is the case.

Are there any other ways to have someone manage this task at a reasonable cost? Right now, it looks to me like she will just have to pay 1-1.5% but in her case, it may be worth it. I'm just checking to make sure of options to pass on to her.

Thanks in advance.
Edward Jones is the worst available option. Don't do that.

In tax-advantaged accounts you could set her up in a target date fund.

In a tax-advantaged accounts you could set her up in a Vanguard LifeStrategy Fund, or a balanced fund. (This is what I did, set up a one-fund portfolio using Vanguard Balanced Index Fund [VBIAX]).

Vanguard Personal Advisor Service will advise her and manage the investments for her at a fee of 0.30%. Fidelity and Schwab offer similar services.

Fidelity and Schwab have customer service offices in a few cities.
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niagara_guy
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Re: Death of Investment Spouse options

Post by niagara_guy »

I have not used PAS but I hear good things about it. I would talk to Vanguard about PAS and see if DW would be ok with it. If not, try to find an advisor that charges by the hour.

For a friend of mine who became disabled I hired a 'fiduciary' to handle his finances. He had to close down a business, fix some tax issues, etc. and did a great job. PM me for his contact information or how to find one like him. Not sure if he does all that your DW would need.

All the 'advisor' firms like EJ will charge you high fees (1% per year or more) and put you into funds with high fees, so you could be paying them 2%/year or more. I would avoid all of them like the plague.
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AmericanRay
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Re: Death of Investment Spouse options

Post by AmericanRay »

"My ex is a person that had to be put in the chair with the eyelid retractors ala A Clockwork Orange for my 5-minute annual financial update during our marriage. She has absolutely no interest in learning the basics, so she definitely ne"eds help."

That's about right relating to my situation but it's all typical and just fine while both partners and together and, of course, alive.

I really do appreciate all posts. I do believe that I should have included even more information relating to the anticipated circumstances if I were to pass on. We do not and my wife will not need the $2 million or any of the income from the investment, except if end-of-life care is required. Therefore, creating a scenario in which the invested funds are self-sustaining is probably the way to go. Perhaps, mutual funds or ETFs with any dividends automatically re-invested. She would need to be able to call whatever entity that maintained the funds to have funds sent to her if the noted exception happens but that's it, so paying someone an AUM fee seems over the top to me.

My wife and I have ended up with no family, except some distant relatives that are mostly undeserving beneficiaries. We are not big on charities. The take the money with you scenario still does not work.

This is my first Boglehead experience as a poster - thank you, thank you very much!
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ruralavalon
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Re: Death of Investment Spouse options

Post by ruralavalon »

AmericanRay wrote: Thu Aug 04, 2022 1:41 pm "My ex is a person that had to be put in the chair with the eyelid retractors ala A Clockwork Orange for my 5-minute annual financial update during our marriage. She has absolutely no interest in learning the basics, so she definitely ne"eds help."

That's about right relating to my situation but it's all typical and just fine while both partners and together and, of course, alive.

I really do appreciate all posts. I do believe that I should have included even more information relating to the anticipated circumstances if I were to pass on. We do not and my wife will not need the $2 million or any of the income from the investment, except if end-of-life care is required. Therefore, creating a scenario in which the invested funds are self-sustaining is probably the way to go. Perhaps, mutual funds or ETFs with any dividends automatically re-invested. She would need to be able to call whatever entity that maintained the funds to have funds sent to her if the noted exception happens but that's it, so paying someone an AUM fee seems over the top to me.
. . . . .
This best strategy depends on detailed information about your situation, which you have not provided. For example what sort of accounts are involved (traditional IRA, Roth IRA, taxable brokerage account)? Also what are your current ages? How would you describe your health, and health care needs?

For us the best strategy to ensure end-of-life care turned out to be a Continuing Care Retirement Community.
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fourwheelcycle
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Re: Death of Investment Spouse options

Post by fourwheelcycle »

Nate79 wrote: Tue Aug 02, 2022 3:47 pm There are fiduciary only advisors out there that use index funds. You will pay an AUM, maybe <1% but they would be trustworthy and use a Boglehead's like investment strategy when you don't want to do it yourself.
+1

My wife and I are close friends with two couples who use Dimensional Funds affiliated advisors. They both say their advisors sit down with them at their kitchen or dining room table, at least once a year, and go over all aspects of their investments and upcoming financial decisions - when to start Social Security, when and how to do RMDs, etc.

I am a (cheap) diehard Vanguard index fund investor and I would never pay for a financial advisor, but I would recommend a local Dimensional Funds affiliated advisor for someone who wants or needs handheld, human touch investment management.

You could use this zip code locator to find and interview one or a few affiliated advisors if there are any in your area.

https://us.dimensional.com/individuals
niagara_guy
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Re: Death of Investment Spouse options

Post by niagara_guy »

I called Fidelity yesterday and explained that my DW might need help after I am gone (I am not in the same situation as you but DW still might need some help). (I do my own investment planning and have never used an advisor other than an occasional CPA for tax help.)

They told me that since I have more that 250k there they will provide free financial consulting. I did not go any further, so I am not sure if they would try to steer DW to funds that charge more or not. Vanguard PAS would be another possibility and maybe a better choice.
DebiT
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Re: Death of Investment Spouse options

Post by DebiT »

AmericanRay wrote: Tue Aug 02, 2022 5:28 pm Thanks for all -interesting and helpful.

Just a few facts - no local "big" broker offices around here - it's a country setting. No children have survived, no relatives that can help and virtually all of her close friends have passed on. The tax scenario will have to be handled as well - I'm also the tax man.

It seems to me that lots of seniors face the same death of an investment spouse as I do, although hopefully have a family to help.

The bottom line is that I hate to see someone take over who offers nothing valuable in return for the fees - every year. Especially given the fact that senior investment is normally simple, reasonably conservative, and easy to execute. Of course, due diligence is required but spending 20-30 thousand annually is over the top in my view.
I would investigate Fidelity, to see if you could be assigned to a particular consultant even though the relationship would be by phone. Your asset level qualifies you for this at no cost, and it might be a good compromise for what you are needing.
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Sandi_k
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Re: Death of Investment Spouse options

Post by Sandi_k »

My plan, once retired, is to maintain our accounts at Fidelity.

Once we are both at RMD age (in 2037), the idea is to move everything to a very simplified plan, and auto-generate the RMDs (sell ~5% of portfolio in January, sweep cash to MM account, and then 1/12th will be transferred to the local bank account each month).

(Note: In checking the new RMD/Life Expectancy schedules, at age 72, the divisor is 27.4 - which is approximately 3.65% - so we may need to adjust the RMD percentage based on the then-current Life Expectancy Table. We'll set that up when we get there, and I am sure that Fidelity can assist).

At this time, we are planning on all investment account holdings will have been moved to Vanguard Wellington, Admiral Shares - (VWENX) - which is a 65%/35% allocation.

Each account (457/403/my Roth/DH's Roth) will pay $75 at Fidelity per trade for the Wellington shares purchase, which seems eminently reasonable to me.

[edited to correct divisor on RMDs. 2022 Table is here: https://smartasset.com/retirement/rmd-table]
Last edited by Sandi_k on Sat Aug 06, 2022 12:57 pm, edited 1 time in total.
mkc
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Re: Death of Investment Spouse options

Post by mkc »

Sandi_k wrote: Fri Aug 05, 2022 2:46 pm My plan, once retired, is to maintain our accounts at Fidelity.

[snip]

At this time, we are planning on all investment account holdings will have been moved to Vanguard Wellington, Admiral Shares - (VWENX) - which is a 65%/35% allocation.

Each account (457/403/my Roth/DH's Roth) will pay $75 at Fidelity per trade for the Wellington shares purchase, which seems eminently reasonable to me.
Verify directly with Fidelity that you can hold Admiral shares of Wellington in those accounts. If any are considered "retail accounts", you may be limited to Investor shares (per Fidelity CSR). See my recent post here viewtopic.php?p=6809300#p6809300
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Sandi_k
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Re: Death of Investment Spouse options

Post by Sandi_k »

mkc wrote: Fri Aug 05, 2022 4:03 pm
Sandi_k wrote: Fri Aug 05, 2022 2:46 pm My plan, once retired, is to maintain our accounts at Fidelity.

[snip]

At this time, we are planning on all investment account holdings will have been moved to Vanguard Wellington, Admiral Shares - (VWENX) - which is a 65%/35% allocation.

Each account (457/403/my Roth/DH's Roth) will pay $75 at Fidelity per trade for the Wellington shares purchase, which seems eminently reasonable to me.
Verify directly with Fidelity that you can hold Admiral shares of Wellington in those accounts. If any are considered "retail accounts", you may be limited to Investor shares (per Fidelity CSR). See my recent post here viewtopic.php?p=6809300#p6809300
Thanks, much appreciated. I won't go with Vanguard directly, since we want a retail office access, so if we have to go with Investor-grade (VWELX) we're fine with that.
tibbitts
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Re: Death of Investment Spouse options

Post by tibbitts »

fourwheelcycle wrote: Thu Aug 04, 2022 4:02 pm I am a (cheap) diehard Vanguard index fund investor and I would never pay for a financial advisor...
Eventually everyone who lives long enough will hire an adviser in one way or another, in the absence of family or friends.
fourwheelcycle
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Re: Death of Investment Spouse options

Post by fourwheelcycle »

tibbitts wrote: Fri Aug 05, 2022 6:10 pm Eventually everyone who lives long enough will hire an adviser in one way or another, in the absence of family or friends.
Very true!

However, I took care of my never-married aunt's finances and health care at the end of her life, and I have taken care of my father's finances and health care since he sold his house and moved to an assisted living facility at 92. He is 100 now and still going.

I have set up our own finances with a simple two fund portfolio, almost all at Vanguard. Although my wife's only role in managing our savings is to go online to request her RMDs and QCDs, she pays all of our monthly bills and she is a finance professional, so she should have no problems if I go first. We plan to sell our house and move to a CCRC before we turn 80, to minimize any health care burden on our sons at the end of our lives. Our executor and successor trustee son is very competent to manage our finances and taxes if necessary.
tibbitts
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Re: Death of Investment Spouse options

Post by tibbitts »

fourwheelcycle wrote: Fri Aug 05, 2022 7:53 pm However, I took care of my never-married aunt's finances and health care at the end of her life, and I have taken care of my father's finances and health care since he sold his house and moved to an assisted living facility at 92. He is 100 now and still going.
But I would count that as "friends or family." Lacking younger friends or family, everyone you mention would have had to pay for help. It seems like that's the situation the OP is describing.
fourwheelcycle
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Re: Death of Investment Spouse options

Post by fourwheelcycle »

tibbitts wrote: Fri Aug 05, 2022 8:31 pm Lacking younger friends or family, everyone you mention would have had to pay for help. It seems like that's the situation the OP is describing.
Yes, and I suggested a Dimensional Funds affiliated advisor in my post.
BarbK
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Re: Death of Investment Spouse options

Post by BarbK »

My FIL died this year and my MIL (85) was totally clueless on any technology or even basic money skills. He was in process of moving his retirement account from Edward Jones to a local FA with a fee 1.25%.

He had a 'when I die booklet' but the passwords were all encrypted so it was totally useless. He had several Chromebooks and a laptop with userIds and again unknown passwords.

Someone mentioned getting her own Credit Card. After FIL died, my MIL went to the bank, they shut down their joint card and opened one in her name. All the history on their joint card was gone.

He had the water, electric bill, and HOA fee on Autopay so no problem there. Everything else was a mess even though I'm sure FIL thought he left everything in good shape.

Can / Does your wife use a cell phone? Can she change the selections on the TV? Can she write a check? Use the ATM? If you live in a house or independently and something breaks, would she know who to call?

I would work out getting the finances situated with her now. If you don't want to use a PAS type service, maybe an all in one fund like Life Strategy with the distributions funnelled to her checking account. I know in my MIL case, she was so far removed from any of this, she can't grasp the concepts nor does she try.

I wish you and your wife the best ; it's time to get her involved now.
Chardo
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Re: Death of Investment Spouse options

Post by Chardo »

Sounds like what you really need is a financial planner. Someone to quarterback everything, not just manage the investments (which is the easy part). Your wife will be a rich elderly woman with no financial knowledge. You need to pay for that valuable service, and the lifetime cost is insignificant compared to the benefits.
tunafish
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Re: Death of Investment Spouse options

Post by tunafish »

BarbK wrote: Fri Aug 05, 2022 11:35 pm My FIL died this year and my MIL (85) was totally clueless on any technology or even basic money skills. He was in process of moving his retirement account from Edward Jones to a local FA with a fee 1.25%.

He had a 'when I die booklet' but the passwords were all encrypted so it was totally useless. He had several Chromebooks and a laptop with userIds and again unknown passwords.

Someone mentioned getting her own Credit Card. After FIL died, my MIL went to the bank, they shut down their joint card and opened one in her name. All the history on their joint card was gone.

He had the water, electric bill, and HOA fee on Autopay so no problem there. Everything else was a mess even though I'm sure FIL thought he left everything in good shape.

Can / Does your wife use a cell phone? Can she change the selections on the TV? Can she write a check? Use the ATM? If you live in a house or independently and something breaks, would she know who to call?

I would work out getting the finances situated with her now. If you don't want to use a PAS type service, maybe an all in one fund like Life Strategy with the distributions funnelled to her checking account. I know in my MIL case, she was so far removed from any of this, she can't grasp the concepts nor does she try.

I wish you and your wife the best ; it's time to get her involved now.
Is it not possible to hire some sort of expert to recover the passwords? I am just guessing. Or maybe they are written down in his office somewhere.
MikeG62
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Re: Death of Investment Spouse options

Post by MikeG62 »

OP, Vanguard PAS will be a more than acceptable solution in your situation. Costs are minimal and they will be able to easily help your wife - both in terms of advice and managing her assets. You may want to consider entering into that arrangement while you are still alive so you can set some expectations and make sure your wife is comfortable and knows what to do (as best she is going to).

Fidelity PAS is another option, but probably 2X the cost of Vanguard (maybe a little more).
Real Knowledge Comes Only From Experience
tunafish
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Re: Death of Investment Spouse options

Post by tunafish »

If I were the OP, I would set everything up at Schwab, even if it meant driving an hour to an office for an initial or annual discussion. If you call them up night or day in a few minutes you are talking to a competent person. If you call Vanguard (in their limited hours) you can wait twenty minutes or so and then reach someone clueless. I would be sure the wife comes to the meetings, has things explained to her, and participates in phone calls. The sooner the better.
Penguin
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Re: Death of Investment Spouse options

Post by Penguin »

Sandi_k wrote: Fri Aug 05, 2022 2:46 pm My plan, once retired, is to maintain our accounts at Fidelity.

Once we are both at RMD age (in 2037), the idea is to move everything to a very simplified plan, and auto-generate the RMDs (sell ~5% of portfolio in January, sweep cash to MM account, and then 1/12th will be transferred to the local bank account each month).

(Note: In checking the new RMD/Life Expectancy schedules, at age 72, the divisor is 17.2 - which is closer to 5.7% - so we may need to adjust the RMD percentage based on the then-current Life Expectancy Table. We'll set that up when we get there, and I am sure that Fidelity can assist).

At this time, we are planning on all investment account holdings will have been moved to Vanguard Wellington, Admiral Shares - (VWENX) - which is a 65%/35% allocation.

Each account (457/403/my Roth/DH's Roth) will pay $75 at Fidelity per trade for the Wellington shares purchase, which seems eminently reasonable to me.
IRA Required Minimum Distributions
Age Distribution Period in Years
72 27.4
73 26.5
74 25.5
These are the current rmd schedules. Age 72 is 27.4 years.
About 3.6%.
Jon
DebiT
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Re: Death of Investment Spouse options

Post by DebiT »

tunafish wrote: Sat Aug 06, 2022 7:48 am If I were the OP, I would set everything up at Schwab, even if it meant driving an hour to an office for an initial or annual discussion. If you call them up night or day in a few minutes you are talking to a competent person. If you call Vanguard (in their limited hours) you can wait twenty minutes or so and then reach someone clueless. I would be sure the wife comes to the meetings, has things explained to her, and participates in phone calls. The sooner the better.
The good thing about both Fidelity and Schwab is that their phone customer service is great. Extremely competent,every single time I’ve called.
Age 64, life turned upside down 3/2/19, thanking God for what I've learned from this group.
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ruralavalon
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Re: Death of Investment Spouse options

Post by ruralavalon »

All of my accounts are at Vanguard. I have always found Vanguard customer service to be prompt, courteous and professional. I use the Vanguard free, automated, Required Minimum Distribution (RMD) service (link) and it works very well. This month I completed a transfer of ownership on a Roth IRA without any hitch.

J. D. Power, 2021 U.S. Self-Directed Investor Satisfaction Study. Vanguard ranked highest.

Morningstar, The Best Fund Companies and Their Ratings.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
boomer543
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Re: Death of Investment Spouse options

Post by boomer543 »

Please know that Vanguard PAS with a dedicated CFP advisor (as you would have) is SO much more than just managing your $2 million portfolio. I have been with Vanguard PAS about a year. In that time I have had several conversations with my CFP on financial matters unrelated to my/my wife's portfolio like their advice (not from me) to having my son as "Agent" to get a call in case a scammer or unauthorized party is trying to do something "unusual". Yes, I am a senior citizen too. Also, my portfolio is NOT just "cookie cutter" but includes Vanguard funds that I identified through Morningstar that do better than the initially proposed funds. The overall point is you can work with your CFP over time on all kinds of family financial concerns. If you don't feel comfortable with the CFP they assigned you, ASK for another with the age/experience criteria you may desire. I went with Vanguard because there is the mighty Vanguard research behemoth behind their overall recommendations, but there is the customized individual element through the CFP. If you have any questions, please PM me.
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Sandi_k
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Re: Death of Investment Spouse options

Post by Sandi_k »

Penguin wrote: Sat Aug 06, 2022 8:12 am
Sandi_k wrote: Fri Aug 05, 2022 2:46 pm My plan, once retired, is to maintain our accounts at Fidelity.

Once we are both at RMD age (in 2037), the idea is to move everything to a very simplified plan, and auto-generate the RMDs (sell ~5% of portfolio in January, sweep cash to MM account, and then 1/12th will be transferred to the local bank account each month).

(Note: In checking the new RMD/Life Expectancy schedules, at age 72, the divisor is 17.2 - which is closer to 5.7% - so we may need to adjust the RMD percentage based on the then-current Life Expectancy Table. We'll set that up when we get there, and I am sure that Fidelity can assist).

At this time, we are planning on all investment account holdings will have been moved to Vanguard Wellington, Admiral Shares - (VWENX) - which is a 65%/35% allocation.

Each account (457/403/my Roth/DH's Roth) will pay $75 at Fidelity per trade for the Wellington shares purchase, which seems eminently reasonable to me.
IRA Required Minimum Distributions
Age Distribution Period in Years
72 27.4
73 26.5
74 25.5
These are the current rmd schedules. Age 72 is 27.4 years.
About 3.6%.
Thanks for the correction - I must have gone across the horizontal somehow to a divisor in the 80's!

Original post is corrected - and for those looking for a simple chart, without wading through the IRS pub, here is a simplified one:

https://smartasset.com/retirement/rmd-table
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Wiggums
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Re: Death of Investment Spouse options

Post by Wiggums »

AmericanRay wrote: Thu Aug 04, 2022 1:41 pm Therefore, creating a scenario in which the invested funds are self-sustaining is probably the way to go.
You can’t go wrong with a simple, self sustaining portfolio. Many people have come to the same conclusion. The cost of PAS is quite reasonable, IF you decide later that a dedicated contact is needed. People on this forum are generally against brokers with high fees, who will also place you in expenses funds. Sometimes these funds will have a font end load. To generate even more money for the broker, they will churn the account. Bad brokers will needlessly put you in too many funds. It makes it harder to leave the broker and convinces some customers that their portfolio is too hard to manage themself. The nice thing with Vanguard is they use a handful of low cost funds You can try the service and later drop it without ending up with a complex portfolio.

I’m assuming you both have wills to determine who will receive any money left after you both are gone.

Good luck to you.
Investors need to be better informed about the costs they pay. “High fund fees can be hazardous to your wealth in the same way that high calories can be hazardous for your health.”
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