Bob and I have been close for 30 years. We don't really discuss finances (probably because I don't like to talk money with friends) but I know they are not hurting. Last night I was at Bob's for a visit and he really poured out his heart and details.
Turns out Bob is retiring at 65. They have almost $2m (401k, IRA, brokerage, cash). He'll have $32K/year when he claims SS. He's always handled their finances and did well. The catch? His wife, one of the nicest people I've ever known, is not good with finances or numbers. I was shocked as I had never picked up on this over the years, but he says her dyslexia makes her terrible with numbers and she just doesn't understand personal finance beyond what you might get tested on in high school. He's tried to educate her, he's taken her to day-long continuing education classes geared to seniors that come with a textbook. He has concluded that she cannot manage their finances unless they are super-simplified in the event he dies first. About a year ago she took over paying the bills via online bill pay, and she can do that OK (with the exception of paying a couple of them twice and ending up with large credit balances on a credit card for one billing cycle). She has a spreadsheet to track their bills but he had to build the formulas - her dyslexia made it impossible for her to do it accurately.
He has accounts at multiple brokerages, 3 bank accounts, multiple credit cards (to maximize rewards).
His wife is not a spendypants on herself so he's not worried that she'll blow through their savings if he dies first. He worries that if someone says "It's going to cost $20,000 to replace your furnace" she'll not realize that makes no sense (and he points out she might look at a quote and think it said $2,000). She's an incredibly nice, compassionate, helpful, non-confrontational person and tends to assume everyone is fair and honest. Especially non-confrontational with anything to do with money since she's self-aware enough to realize she just might not understand what's going on even if she thinks something smells. Man, I felt bad for him since I could tell how much it pained him to have to paint his wife in any sort of negative light.
So with that background in mind, what suggestions might you all have? Simplify everything right now to one brokerage, one bank and one credit card? What kinds of support could he try to have in place for her? They do not have children but she has a lot of friends although none of them are really the type to provide financial guidance in his opinion. Nice family but again, no real financially-savvy people there he said. He worries that while she could go months without any problems (just paying the routine bills, buying food and filling the tank won't cause issues), every once in a while there will be those situations outside the typical and that's where the risk will be. Unscrupulous repairpeople, really any situation where most people typically have a gut feeling of "those numbers don't seem right." A financial advisor probably isn't equipped to handle "Is $20,000 for a furnace a good price?" questions. He wouldn't rule out an advisor even knowing there's a large price to pay for that, but thinks he has to get it in place ahead of her need rather than hoping she finds a good one. Since she isn't a spendypants is it enough to hope that if she gets taken advantage of, it will be on a small enough scale that there wouldn't be severe consequences?
I said I'd I wanted to crowdsource ideas before I got back to him.
