Julie Jason: ‘Surprise’ events present risks.
What happens when you suddenly find yourself in charge of your retirement finances without the benefit of having much experience on the subject matter?
The “sudden” nature of this situation is usually couple-oriented. One spouse or partner becomes incapacitated or predeceases the other.
I’ve seen this many times, and it is avoidable, with some planning. In my practice, I encourage couples to treat retirement as a joint venture. That’s a new experience for couples who, like most I know, haven’t thought about the “Gosh, I’m suddenly in charge of the family finances” risk.
What I find interesting is that this state of unpreparedness is not limited to people with no financial experience or training. I see this “head in the sand” approach even when both partners have advanced degrees and work in law, finance or accounting.
Here is the reality: Sooner or later, a partner is unexpectedly left on his or her own to figure out a financial situation that is complicated and possibly overwhelming — retirement finances being the biggie (irrespective of age).
For anyone in this situation — meaning, having done no preparation — the temptation is to look for help, perhaps from a lawyer, accountant or a financial adviser, or a relative or friend. That can work, if you are lucky enough to have skilled and ethical advisers to choose from. I’ve seen people go down this path and never find their bearings; the danger lies in creating a dependency. To be effective, the help has to be short-term and focused on specific outcomes that lead to strength — sound, independent decision-making strength.
What else can you do? Start studying your “new” situation.
One of my favorite sources for unbiased information is FINRA (the Financial Industry Regulatory Authority), which regulates the brokerage industry. FINRA has a section on personal finance (tinyurl.com/2ct47sx5), as well as one titled “Learn to Invest” (tinyurl.com/yp77dcvh), which could help someone new to investing get a better understanding of some of the concepts related to it.
Another favorite resource is Investor.gov, which is part of the U.S. Securities and Exchange Commission. The section on “Introduction to Investing” (tinyurl.com/4hympfnp) contains helpful information, including breakdowns of investment products and a section titled “How the Markets Work.”
FINRA provides help on choosing an investment professional (tinyurl.com/mb8dxvae), be it a stockbroker, a financial planner or an investment adviser. There also is a section offering tips for working with an investment professional (tinyurl.com/zj65vesf).
FINRA’s BrokerCheck (tinyurl.com/t5ynhxcs) will allow you to check a particular firm and its representatives. You can find information there on both broker-dealers and investment advisers. Form CRS (investor.gov/CRS) is the key document that will help you compare and contrast firms.
It’s not easy to jump into a situation involving money when you are not familiar with the language or the nuances of investing and financial management. You’ll have to put in some time and do some homework, but it is worth it.
Now, here is my message to you if you are part of a couple: I’d like to see you avoid this “suddenly” predicament. My advice is simple and straightforward: Think of your retirement as a joint venture with your partner or spouse — and do something about it.
What can you do? That’s the subject of my next column. If you have something to share on this topic, I’d like to hear from you. Send me questions and comments at readers@juliejason.com.
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford) and author, welcomes your questions/comments (readers@juliejason.com). Her awards include the 2020 Clarion Award, symbolizing excellence in clear, concise communications. Her latest book, a curated collection of Julie’s columns, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Columnist.” To hear Julie speak, visit juliejason.com/events.