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Subject:  Re: Post-retirement personal finance Date:  2/10/2002  9:25 PM
Author:  rkmacdonald Number:  7771 of 20014

Author: humanshark Date: 2/9/02 3:32 PM Number: 7766
What are some good sources of information and reading material for dealing with the Post-Retirement situation where the husband, who was the breadwinner in the more traditional mode of the older generation, has passed away and the wife is left with a comfortable estate but does not know how to deal with it?

Let me assume we are actually talking about you, and say that I am very sorry for your loss. I lost my father in Dec 99 and my mother was left in a similar position as you. Fortunately, I knew a little about investing, and I have been able to help her.

1. The first thing you have to do is to fully understand every detail of your estate. You need to be sure that you know exactly how much money you have and where it is invested. You will be very vulnerable until you establish a monitoring system to make sure none of your assets are disappearing. Be extremely careful about paying anyone to help you. It is very expensive (if not downright dangerous) to turn your money over to someone else to handle. There are lots of sharks out there who would love to take your money. Make sure all the decisions require your approval.

2. Figure out how much money you should be receiving from dividends, interest, pensions, social security, etc., each month, and where it is going. Call your broker, mutual fund company, and banks to find this out. Track this money flow regularly.

3. Figure out how much you need each month to live on, including discretionary (entertainment, travel, fun, etc) as well as non-discretionary (food, shelter, transportation, clothing, utilities, etc)expenses. Multiply this by 12 to find your annual expenses.

4. Subtract any cash income streams (pensions, social security, etc) from your yearly expenses. This number will be the amount you will need to withdraw from your estate each year to live.

5. Now, since a properly allocated portfolio has historically been able to generate a maximum of 4% per year and survive longterm, you need to find out if your estate will meet your needs long term. Multiply your annual withdrawal number from step 4 by 25. This will give you the total amount of money you need to be sure of long term survival (again, assuming it is properly allocated, but I will address that next).

A lot of information has been written about pre-retirement planning and investing, but very little about the post-retirement world and its challenges of managing assets, income, expenses, and possible health problems. And the special case is when the wife must sudd