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Book recommendation for my mother in law

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  • Book recommendation for my mother in law

    My wife's mother finds herself at 77 in charge of the portfolio her husband put together over the years. He no longer has the cognitive ability to manage it. She has done little, and frankly hasn't had to: he set things up in a workable way. Nonetheless she is very stressed by the decisions she does have to make.

    She recently asked to speak to me about her finances, and while I was satisfied that there was no urgent need to make changes, I suggested she might want to do some reading to educate herself and gain some confidence in her decision making. I'm wondering whether anyone can suggest a book at might help in her situation? She has no need for saving nor for deep knowledge of retirement vehicle options, since that's long been taken care of. Her biggest concerns are not losing the money, and not losing too much to inflation. She knows enough to have these concerns, but not enough to know how to handle them. She is intelligent, clear-headed, and sees the wisdom in learning about this. They have had good legal and estate planning advice over the years, so this is really just about managing the portfolio.

    More specifically - in case this helps in thinking about a direction for her self-education -- she has 6M in a few retirement accounts invested in TIAA traditional annuities, that have been paying her 450k per year. I don't know the details of that, other than that apparently she could take out 1.2m immediately if she wished without penalty, and the remainder could be shifted into another investment if she wished (she doesn't) over a ten year period, 10% per year. Apparently these funds are not really annuitized, because the principal transfers to a trust for heirs after death. (I thinks this is set up as paying interest-only, instead of as a lifetime guarantee. I'm trying to get her to clarify this.)  After taxes she spends 200k/yr and puts away 100k.

    Her big concern is that she now has accumulated 1M from the distributions that is sitting in a bank account. She has no immediate need for this to generate more money, but feels silly not earning more. I am helping her find a tax-free muni fund, as this level of risk and tax status appeals to her. Nice problem to have!

    Thoughts on reading material appreciated, or on her situation in general.
    My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

  • #2
    Your mother in law is in a great financial position but a stressful personal one.  I would encourage her to keep the lines of communication open with you so no one takes advantage of her.  I really do not understand how her accounts are set up because usually there is no legacy with annuities.  Maybe one of the insurance people will respond.  She might like Mike Piper's books.  They are short and very readable. I noted he is a speaker at the upcoming WCI conference.

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    • #3
      Thanks hatton. I agree about the accounts, but I suspect they took advantage of an option TIAA offers to not annuitize the monies that accumulated in what is called "TIAA Traditional Annuity". I know the option exists in some accounts to preserve principal that way, but it is confusing because of the term "annuity". Needs clarification. I'll check out Mike Piper.
      My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

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      • #4
        Realistically, at age 77, I am not sure that I would expect her to learn to manage her investments. I would help her find a trustworthy advisor and offer to stay in the loop to monitor things, as much as she was comfortable having you do so.

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        • #5
          Right, I see your point. On the other hand she's excited about learning to manage and understand her finances better. She's actually emailing me to follow up on what she ought to read. Far be it from me to interfere with the joy of education!  But practically, yeah, I can probably guide her through basic decision-making, and explore whether she wants to consider a professional advisor.  I do know she doesn't want to pay someone a percentage of AUM. Maybe a fee-only advisor.
          My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

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          • #6
            My oldest brother is 74 and he manages his investments just fine.  I think it is an excellent sign that she wants to learn.

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            • #7
              I agree with vagabond. It sounds like she is still sharp and is not necessarily incapable of learning. But if she wants to optimize returns it might be good to learn and have some professional advice.

              As my own father passed recently with a much much smaller estate, I hope she is also learning about how to be prepared when that time comes. If you guys at least know where wills and accounts are that helps. Passwords written down somewhere safe serve a practical function in this area. Proper beneficiary forms filled out. Trusts. Etc.

              Probably at least as important.
              Also estate sounds like it is approaching or past taxable size. She may be inclined to start thinking about that part.

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              • #8
                she might be interested in "how to manage it" but maybe in "what can she do with it". Is she interested in just how to manage it, or is that a means to the end of getting to use it for (trips, grand kids, retirement house, rate plans, community gifts, churches, etc). This likely applies both during life and after (estate planning).

                Also, suggesting she start to talk with the brother might be helpful too.

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                • #9
                  You are right hatton - My father is 83 and does a very good job of managing his portfolio. I assumed Vagabond was also suggesting that at 77 it's hard to learn this stuff for the first time, and to acquire the experience to understand how you personally handle the information in the real world. Nonetheless I do believe age is not a strict barrier to almost anything, and agree that it is a very good thing that she wants to learn.
                  My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

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                  • #10
                    Thanks adventure. She's fine with what to do with it. She knows she has 300K after tax to spend, and spends 200. She visits children abroad 2-3 times per year, cares for a declining husband, and maintains a summer home and a primary residence. I hope I'm as functional at that age. She really wants to stress less, which I think information and knowledge may help with.

                    There is no brother.
                    My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

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                    • #11


                      Thanks adventure. She’s fine with what to do with it. She knows she has 300K after tax to spend, and spends 200. She visits children abroad 2-3 times per year, cares for a declining husband, and maintains a summer home and a primary residence. I hope I’m as functional at that age. She really wants to stress less, which I think information and knowledge may help with. There is no brother.
                      Click to expand...


                      I think learning is always a good idea. Even if you don't actively manage it, the knowledge about finances can prevent you from being led down a fairy tale path by an unscrupulous EJ type of advisor.

                      I would suggest her making sure she has alll her investments laid out openly and then going to a fee only advisor with either you or your wife or both and learning how she can streamline it, not only to reduce the stress but also make sure it aligns with her future plans with the money (charity, trusts for kids and grand-kids etc).

                      I think the poster confused the "brother" with hatton1's brother.

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                      • #12




                        You are right hatton – My father is 83 and does a very good job of managing his portfolio. I assumed Vagabond was also suggesting that at 77 it’s hard to learn this stuff for the first time, and to acquire the experience to understand how you personally handle the information in the real world. Nonetheless I do believe age is not a strict barrier to almost anything, and agree that it is a very good thing that she wants to learn.
                        Click to expand...


                        That is correct. My 85 year old father manages his portfolio, but he has been doing it for over 50 years. He did not start learning about it eight years ago. Nothing wrong with learning about, but managing it is not the same as learning about it.

                        Edit: As a recommendation, I would consider Bill Bernstein's  "If You Can" :

                        https://www.amazon.com/If-You-Can-Millennials-Slowly-ebook/dp/B00JCC5JKI

                        It is written for millennials, but it is a good, short, beginner's investing treatise, that is free/cheap. You can gauge her interest, and if she wants to go deeper, Bernstein's Four Pillars is a classic and excellent read.

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                        • #13


                          There is no brother.
                          Click to expand...




                          I think the poster confused the “brother” with hatton1’s brother.
                          Click to expand...


                          Yep. Thanks.

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