ONE OF THE MOST exciting events at a track meet is the relay race. Each runner has to run his or her leg, and then hand over the baton to the next runner. If the baton gets dropped, the team usually loses.
My wife and I occupy two roles in our financial life. I save the money and my wife spends it. This arrangement works well for my wife. When she complains about my frugal nature, I simply explain that this gives her more money to spend. She answers, “Carry on.”
As the saver in the family, I’m also the investor. I’ve set up pretty simple financial arrangements. We each have traditional and Roth IRAs. All other money is in joint accounts, accessible to my wife and me. If I die before my wife, it should be a smooth financial transition.
It’s not always so. My father-in-law was the main breadwinner. He’d bring home the paycheck, and my mother-in-law would pay the bills. At the beginning of their marriage, my mother-in-law failed to make mortgage payments on time. They lost their first house that way. It was a hard lesson. But after that, their finances were in good shape—until my mother-in-law died.
It turns out that my father-in-law didn’t know much about their finances. My mother-in-law had set up all of their bills on autopay, so he never thought about paying the bills.
Before she died, they’d reached the point where they could no longer live in their single-family home in a 55-plus community without help. They sold the house and moved to an assisted living facility. The facility didn’t have autopay, so my mother-in-law began paying those bills monthly. This change wasn’t grasped by my father-in-law. When he gets a bill, or what he thinks is a bill, he pays it without question.
Now, it seems, he’s running out of money. My wife, her brother and her sister will need to find a less expensive apartment for him. It likely won’t have the same services or quality of life that he’s currently enjoying.
Can my wife and I do better? I like to think so. The real wild card in our financial life is the potential cost of nursing home care. While I can’t know what our health costs will be as we grow older, I can make a guess based on family history.
My father died of a heart attack at age 56. No nursing home care. My mother needed hospital care but no nursing home care. She died at 93. My brother was badly injured in an altercation that resulted in two years of nursing home care. He died at 79.
Meanwhile, my wife’s mother had a history of poor health, but remained at home until her final three years. She died at 89. Her father has been hospitalized and needs assistance with his daily care, but at 94 he’s still alive and kicking. Her brother and sister are both alive, and haven’t needed nursing home care.
Reviewing our family history, I chose not to buy long-term-care insurance when I was 60, which I was told was the ideal time to purchase it. When you don’t have insurance coverage for a potential financial loss, you are—by definition—self-insured. You’ll have to pay the cost yourself if the need arises. This is our situation if we have long-term-care needs.
In most other ways, our finances are less uncertain. I’ve tried to simplify our accounts to help my wife after I’m gone. Our traditional and Roth IRAs are with the same mutual fund company. We even invest in the same mutual fund in our Roth IRAs, so she can simply merge the two accounts after my death.
I thought about buying Treasury bonds as part of our financial assets, but decided against it. The requirement to maintain an online account with TreasuryDirect seemed like too much of a complication.
I have regular discussions with my wife, so she’ll be informed and equipped to take over our finances, if necessary. It’s not that she can’t understand our finances. It’s just that she’s not as interested as I am. My concern is she may follow in her father’s footsteps, ignoring the subject until something breaks.
The KISS—or keep-it-simple-stupid—approach is almost always a winning way. I just hope our finances are simple enough for my wife to grab the baton without dropping it.
David Gartland was born and raised on Long Island, New York, and has lived in central New Jersey since 1987. He earned a bachelor’s degree in math from the State University of New York at Cortland and holds various professional insurance designations. Dave’s property and casualty insurance career with different companies lasted 42 years. He’s been married 36 years, and has a son with special needs. Dave has identified three areas of interest that he focuses on to enjoy retirement: exploring, learning and accomplishing. Pursuing any one of these leads to contentment. Check out Dave’s earlier articles.
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Thanks David: I made some of the same choices as you did for the same reasons and enjoy the fact someone more knowledgeable agrees with me.
My mother in law turned 102 this past Christmas Day. She lives in an apartment in a Senior Living facility with her soon to be 98 year old second husband. He is soon to be discharged from his first nursing home admission of approximately one month after a fall. They both are cognitively intact to pay their own bills and arrange transportation to doctor appointments with a helpful neighbor. Their only assistance is some occasional meal preparation by my wife. Only in the past year or so have they agreed to hire (they feel more independent if they pay) an acquaintance who does some cleaning and errands once a week.
Pretty darn amazing!
Yes, KISS is increasingly an important attribute of an investment portfolio. I recently exited my I bonds under various different entity names (trusts, etc) for that exact same reason. It required a degree in nuclear physics to unwind that and happy now out of those!!
I am also frugal and appreciate the secondary benefit that more money is left for my loved ones.
Regarding treasuries, individual treasury bills and bonds can be purchased through any of the major brokerages (Vanguard, Fidelity, etc). You do not need a TreasuryDirect account to buy them. Of course, you can also buy bond index funds through these same brokerages.
My wife has no interest in our investments. The other day as we drove through Palm Beach viewing mega mansions and as large yachts she asked, “How much money do we have?” I told her and now having been impressed by those houses, she said, “ that’s not much.” I was crushed so I explained it in relative income and net worth terms for all Americans and for those our age. “Oh” she said now being modestly impressed.
When my pension is deposited each month a portion is auto transferred to a checking account we label “Connie’s checking.” I have no idea nor do I care what happens to that money.
All of our assets are jointly held except my rollover IRA which she of course, is the beneficiary. My pension has a survivor annuity. We both have LTC insurance (for the last 35 years) although with modest benefits – and a big premium.
I have consolidated all investments of any type in a Fidelity account, which Connie has no interest in viewing. I have prepared detailed instructions for our children.
Connie and I are on the same page with money and spending and always have been, she just wants to view things from one “pay day” to the next and knows I will look out for both of us – which I enjoy doing.
My wife and I have an arrangement called, “Mom’s Cash”. This account is where her social security and wages from a part time job go. She sweeps the excess every month into her money market fund at Fidelity. She uses it to buy gift for the kids, other folks, giving, or anything else she wants to do. I was the wage earner and keeper of the finances for almost all of our marriage and this arrangement really makes her feel good that she has money of her own. When I want to tease her, I remind her that her money is her money, and my money is our money–because it really is her money!
Sir Richard,
I think it’s so cool your wife is so cool!
Mine wasn’t and couldn’t see my point of view about money. Sadly, It was always a contention for us.
Maybe she should of had a “Kathy’s Account” in the bank.
Kudos to you two!
David…in your past articles you have mentioned achieving sizeable wealth but also admitted to being cheap. I must admit I was cheap with myself, but never with loved ones. I dressed my mother better and more expensively than myself. I spent lavishly on those I cared for and gifted friends generously to show my appreciation. With your great wealth, why not contribute to your father-in-laws quality of life,allowing him to be comfortable in the apartment he now occupies. You will never be sorry.
Regarding a Treasury Direct account, it’s not all that complicated. If an old lady like me can figure it out you should have no problem.
Hi David, this is Chris. I understand what you are saying about your wife not being interested in the family finances. My husband is the same way. He retired at the beginning of the year and I am showing him how to pay the bills online and other financial things. Through the years he had no idea about our finances, and I had to learn about them. He needs to learn in case something happens to me. So far he is willing, so that is a win.
David wow, while reading through this article I was thinking that your humor was going to offend someone. It’s not that I don’t respect my wife’s intelligence, and I’m sure this is true of you as well, I’m certain that my wife’s IQ is higher than mine but I’m the money nerd in our relationship. Simplifying all things money is the smart thing to do. I’ve found in my tax practice that most marriages have a money nerd and if the nerd dies first the surviving spouse is often totally lost. Involving or at least periodically reviewing money and tax matters with the non-nerd is the smart thing to do. Also I have found that gender does not determine who takes care of the family finances.
“Involving or at least periodically reviewing money and tax matters with the non-nerd is the smart thing to do.”
Easier said than done.
My husband respectfully calls me the family’s CFO. And he’d better or I’d quickly set him straight. We both earned, we both spent, but our superior credit scores are because I paid all the bills!
Wow, I am so grateful that my husband and I have a balanced relationship in which we appreciate each other’s contributions. And respect each other’s intelligence.