By Tom Breiter
As registered investment advisors with offices in the Bradenton / Sarasota and Naples areas of Florida, we work closely with our clients to give their retirement income plan the best chance of success. We believe the best situation is where both spouses are involved in the process, even if one is the primary person handling the investment decisions and activity. In most cases, one spouse will pass away first. For the surviving spouse, having a functional knowledge of the investment and income plan and a relationship with the financial advisor, assuming one is being used, can go a long way toward reducing the stress of worrying about money at a time of grief.
Social trends and demographics seem to prevent the ideal scenario from being used in a majority of relationships, at least that has been my experience. Social patterns leave the handling of investment management and retirement income planning to the male spouse. Even as a male, I never thought of investment planning as a “manly” activity. But, for the World War II, Baby Boomer, Generation X and Millennial generations this pattern holds true. Again, not in every case, but looking at the majority of our household relationships.
The problem the social aspect creates is easily put off, like kicking the can down the road. But, eventually you catch up with the can. With female spouses exhibiting longer life expectancies by several years, and tending to be younger in the majority of relationships, the chance of the woman being responsible for managing her financial affairs at some point is very high. Many are unprepared because they have not been involved. Some women don’t know where the investment accounts are maintained and often don’t know the account passwords to access the information.
We often hear “My husband handles our investments”. The husband may be 75 or 80 years old and the wife 65 or 70. This is a situation that places the woman at risk if she is not involved in the financial planning process. Men are more inclined (again, in general) to take more risk than women are comfortable with. This leads to a potential situation where if the male dies, the wife is left with a portfolio needed to produce income for her longer life-span, but it may be predominantly invested in growth stocks that pay little income and are susceptible to large declines in value during the inevitable periods where stock prices may drop 20% or more.
Just recently, we learned that one of our male clients had passed away suddenly at 83. His slightly younger wife, was of course grief stricken. Even though the husband handled virtually all the investment decisions, She has had a relationship with us long enough to know she will have continuity in her financial planning process. She doesn’t need to now go search for an advisor and put herself at risk of falling prey to a commissioned salesperson who might put her in inappropriate investments for the sake of generating personal commission income, an activity we see all the time. We will be able, when she is ready, to help her plan for her new reality and have confidence about her financial situation.
Many decisions in life are black and white. When we blend the social trend of males handling investments with females longer lives, it becomes more grey and can lead to a stressful time for many women at some point. I’m not saying the men handling the investments aren’t doing a good job. It is important for women to want to be involved and important for men to encourage their involvement.
As advisors, we constantly encourage participation by both spouses and believe that a relationship with an advisor for planning and continuity when critical financial events occur is important. Ladies, if you’re feeling out of control, by all means have a serious conversation about your feelings and encourage the idea of retaining appropriate advice. It’s not any different than using an attorney or CPA for their respective professional knowledge and advice.
If you have questions, please call us at 941-778-1900 or click here to complete our contact form.