Lump-sum payment leads to conflict

DEAR ELLIE: I recently retired at 55 and have been living common-law for eight years.

I have one child, 27, a married 30-year-old, and two grandchildren, ages 6 and 10.

My spouse’s children, 20 and 23, live with us.

On retiring, I received a substantial lump sum payment and invested it. Our net worth (house not included) is over $1.6 million.

My wife retires in five years, collecting over $500,000 or $45,000 yearly pension.

I like to give my grandkids things they wouldn’t normally receive — horse-back riding lessons, overnight trips to a waterpark, amusement park season passes, etc.

I’d limit spending on both to no more than $5000 total annually. My daughter works part-time and her husband works constantly, so my taking the kids out helps my daughter get caught up. Do you think $5,000 annually for both grandkids for the next six years is too excessive, considering our circumstances?

This issue has caused many heated arguments as my wife feels that I think the lump sum is MY money only and that I’m not thinking about making it last until we die.

I’ve seen my financial advisor and feel extremely confident that $5,000 per year is completely manageable.

I prefer to help my kids, my wife’s kids, and the grandkids now while I can see them enjoy themselves.

I spend very little on myself other than a used boat.

— Grandfather Fund

ANSWER: Does anyone else out there think a $1.6 million nest egg is a problem?

Well, it is — relationship-wise. This isn’t about spending that sum, which your financial advisor has already confirmed is manageable.

Instead, you’ve discovered that personal spending, when living in a union (and especially one involving children from previous unions) is a topic which easily becomes emotional.

And I’m seeing what’s missing in the details that riles your partner.

There’s no mention of planning for helping her future grandkids similarly, though you’re aware she won’t amass the same savings as you have.

Also, she has a legitimate concern about how you two will manage if you both, hopefully, live a long life together. She deserves some reassurances — e.g. if your investments don’t grow much or you have losses — that you’ll cut back accordingly.

Also, if one of you has high unavoidable expenses, the grandchildren’s “enjoyment” fund can be missed during that time since they do have responsible parents.

But most important, your partner needs to trust you and you must trust her. She must feel that you’re in this generosity-mode as a team.

However, if it keeps causing arguments, there’s more that’s bothering her. That’s what you’ll have to probe more deeply, with some counselling sessions to air it all out.

TIP OF THE DAY

For long-term couples, money and its uses are rarely just “personal.”

Ellie Tesher was born in Toronto and has been working as a journalist for 25 years. She studied sociology at the University of Toronto before landing her first job at Children’s Aid as a case worker with foster children.