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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 suddenly come up to speed to deal with a financial situation that was not in her domain as
a married spouse.

Once you become fairly knowledgeable about where you stand and whether or not you have enough money to live on, you need to address the topic of where it should be invested.

If you have a fairly sizeable estate, then you most likely have a full service broker. You can continue to work with that broker if you want to, but full service brokers are pretty expensive. Plus, your broker may or may not really have your interests as top priority. He/she may have his/her own succcess more in mind than yours.

If you are independent-minded, you could open an account with a respected no-load mutual fund company like Vanguard ( Note: I am not affiliated with Vanguard in any way. I have some of my retirement money with them, and I think they are one of, if not the best mutual funds there is. Vanguard can even handle individual stocks now (but their trading costs are a little high).

I would recommend reading a couple really good books (both can be purchased online at or

'Common Sense on Mutual Funds' by John C. Bogle (founder of the Vanguard Funds.

'A Random Walk Down Wall Street' by Burton G. Malkiel.

And, reading a few good websites: is the Retirement area here at the Motley Fool. Click on 'Managing Your Retirement'. Lots of great information. has lots of information on withdrawal methods and maximum withdrawal rates from retirement portfolios. Scott Burns is a columnist for the Dallas Morning News, and he posts all of his columns as well as tons of other info in his own personal website. Some of it relates to managing your retirement.

Lastly, continue to read this board as well as the Retire Early Home Page board at:

and the Retirement Investing board at:

Other boards you might want to read are:
Indexing Board at:
Bonds and Fixed INcome Investments at:
Investing for Income at:

I hope this will get you started.

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