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Case Study: Spouses Seeking Education

It's common that one spouse handles more of the financial dealings and has more advanced financial knowledge than the other. In fact, a Fidelity Investments survey indicated that:

- Only 28% of respondents expressed confidence in their partner's abilities to manage the finances.

- Only 43% of couples report making investment decisions for retirement jointly.

- Only 38% of unretired couples agree on the lifestyle they expect in retirement.

WE GET IT.
Talking about finances and retirement planning can be stressful.
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But what happens if the spouse handling the finances predeceases their companion? Will that spouse become prey to unscrupulous advisors pushing pricey annuities and unsound investments with high commissions?

At Mariaca Wealth, we know how confusing it can be for a spouse who hasn't previously handled financials to take this on. We also believe that informed clients make the best clients because they understand why we're recommending certain courses of action. This critical understanding helps them sleep better at night and remain disciplined when it matters most.

We've developed a method for educating spouses on the essential aspects of investment planning, tax planning, estate planning, and asset preservation. Through one-on-one meetings, instructional videos, client events and more, we keep our clients informed and educated so they make confident, informed decisions.

Meet Amanda:

Consider the case of Amanda, a widow in her fifties whose husband, David, recently passed. David had worked in finance his entire career and had handled most of the financial decisions during their life together. Amanda was self-employed, had one child in high school and two in college.

Mariaca Spouses Seeking Education

She was concerned about having enough assets to continue to support herself and her children. She also needed guidance on her investments and on how to protect proceeds from David's life insurance policy, his retirement accounts, and a partnership payout from his employer from unnecessary taxes.

In addition to providing for current needs, Amanda was also concerned about being able to retire comfortably and needed to understand her options for collecting social security.

She felt overwhelmed and underprepared, and wasn't sure even what questions she needed to ask in order to make her best decisions.

Amanda needed to understand:

  • The current financial picture, including the shift in available income sources
  • Whether she could continue to enjoy her current lifestyle
  • Tax implications of David’s life insurance payout options
  • How to navigate a partnership payout from David’s employer
  • How to support her children currently in college, as well as save for her youngest child’s college education
  • How to prepare for her retirement, including decisions about when and how to start taking social security

THE MARIACA APPROACH

At Mariaca Wealth Management, we've helped dozens of spouses navigate the same financial maze that Amanda finds herself in. Here's how we step in to help.

We would:

 

01

Gather all her financial information for her

02

Provide her with the records she needs to apply for benefits

03

Analyze her current situation, including all sources of income, available assets, and spending needs

04

Prepare a written financial plan with detailed options for her current needs and future forecasted needs.

05

Meet with her one-on-one to go over the plan, explain confusing concepts, and make certain she was aware of the implications of her choices

06

Increase her financial knowledge and confidence through an ongoing educational video series, client events, and email communications

Amanda’s written financial plan would include recommendations for:

Financial Plan

  • Life insurance payout options
  • David’s partnership payout from his employer
  • Meeting current income needs
  • Potential college costs based on private and public universities
  • Timing options for retirement and social security decisions
  • Tax implications of her decisions
  • A blueprint of different scenarios and their associated costs
  • A decision tree summary and clear next steps

Next steps may include:

  • Establishing a retirement account to consolidate David's retirement accounts in her name
  • Establishing a non-retirement account for proceeds from insurance policies and partnership payouts
  • Investing assets in an allocation appropriate to her needs and risk tolerance

Down-the-road steps may include:

  • Recommending a level of college funding that aligns with her goals for her youngest child
  • Discussing retirement options, including the sale of her current home and a possible move to a different retirement location
  • Strategies for mitigating taxes, including Roth conversions, not claiming early social security benefits, and estate planning considerations

 

THE MARIACA PROMISE

At Mariaca Wealth, we know what’s needed when a spouse needs to come up to speed suddenly on financial matters. Our clients are like family to us, and we promise to guide the surviving spouse through the financial decision-making maze and educate them over time to make confident, informed decisions.

02We Will ...

... do everything we can to educate the surviving spouse on financial concerns

... take the time to meet with the spouse one-on-one and to explain financial concepts and answer questions

... gather together all the information the spouse needs to collect benefits and make decisions

... develop a comprehensive written plan that puts everything the spouse needs to know in writing, including current financials and future forecasting

... offer financial advice that is in the spouse's best interest

And, if you or your spouse are not not quite as well versed as you'd like to be on financial matters, you don't have to wait for something unexpected to happen. At Mariaca Wealth, we have ongoing educational programs, videos, and client educational events in place that will increase you or your spouse’s financial literacy and help prepare both of you for a less stressful, more enjoyable life together.

 

 

Important Disclosure:  The above case study is hypothetical and does not involve an actual Mariaca Wealth client. The case study is for illustration purposes only and it is not intended to provide you with any customized investment advice. Nothing in this case should be considered as a recommendation or advice to buy, sell or continue to hold securities or other investments, or take any specific action regarding any tax matters. Accordingly, certain of the securities and strategies referred to may not be suitable for all clients. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience the same or certain level of results or satisfaction if Mariaca Wealth is engaged to provide investment advisory services.

Sources:
1. Fidelity Investments: 2015 Couples Retirement Study Fact Sheet

 

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