Simple Portfolio Management in retirement

[airbus330]

@airbus330, the provider transfers the sipp to a new pot called death benefit, this gets paid out typically as a lump sum, or purchase a beneficiary drawdown plan, or an annuity. ie typically cash in and paid across. Under current rules under 75 this is tax free, over 75 taxed at their marginal rate of income tax.

Thanks for explaining the system. I must now ask Aviva what their process is, in the event of my death. t is worrying because, like the OP, my wife has no interest in money management of this type. A drawdown plan, if I can explain the working of it, is a far better bet than an annuity, which I am sure she would easily gravitate to.

[xxd09]

A real cracker of a problem-I am now 74 wife the same
I do the money and she will not learn investing before I die
Half our income comes from investments
So
I run all our finances on Quicken2004-she as the main spender enters transactions every week.The home page of Quicken is setup so as she knows at all times current spending, value of ISAS and SIPPS ie total value of our savings
Investments down to 3 trackers only-2 equity funds and 1bond fund
Our 3 children are executors -all have compete details on paper of our finances -updated regularly
2 children are well off-could help a cash flow situation till probate etc sorted
1 son in law a banker so financially capable and could handle financial advice to executors
She has a Teacher’s Pension and a State Pension so would have cash flow
All powers of attorney wills and end of life wishes in place
Could I do more?
Larry Swedroe mentioned an interesting one
A form signed by both parties while they are compus mentis
If one of the couple feels the other is losing the plot then a Doctors examination can be requested and if unfavourable ie Alzheimer’s etc all credit and debit cards etc can be instantly withdrawn from the affected partner-worth a think?
xxd09

[Darka]

Larry Swedroe mentioned an interesting one
A form signed by both parties while they are compus mentis
If one of the couple feels the other is losing the plot then a Doctors examination can be requested and if unfavourable ie Alzheimer’s etc all credit and debit cards etc can be instantly withdrawn from the affected partner-worth a think?
xxd09

Thanks xxd09,

Does not the powers of attorney cover this?

[xxd09]

I think this is to cover possibility of disagreement between couples on each other’s perceived state of mind preceding obvious incompetence
Slow onset Alzheimer’s?
xxd09

[Chrysalis]

Some useful information here.
Two points that perhaps haven’t been emphasised.
1. Make sure you understand your pension provider’s death benefits options, not all providers offer beneficiary drawdown, if that is something you want to be available to your wife.
2. Consider arranging things so that your wife has enough secured/guaranteed income to pay the day to day bills - ie coming from state pension or an annuity (if neither of you has any DB pension) . I suspect that would massively ease stress after your death, which I assume is the objective. I understand you may feel strongly against annuities, but it is worth thinking seriously about this option because it does provide stress free income. I know it’s possible to buy deferred annuities, I wonder if you can buy an annuity contingent on your death? If not, would you consider a partial annuity for your wife to ensure sufficient day to day income? Then there isn’t the urgency about worrying when and how essential income is going to arrive, and time to get to grips with the ‘savings’.

My final plea would be to simplify, then simplify again. Do this even if it turns out that you are the surviving spouse. My father was a great collector of accounts. When he became too frail to manage (or even remember) them himself, it took me about 2 years to track down every account (and if there hadn’t been written statements, if it had all been online, I might never have found them). After I’d simplified, he had one ISA account holding one multi asset tracker fund, one cash buffer account with National savings, and a current account. That was enough for me to manage (and I wasn’t a bereaved partner and am financially competent). He didn’t have an invested pension, just DB and state pension, which were enough to live on, luckily, because it took me a long time to actually work out how much he had in assets. It would have been much more stressful if he’d needed those assets to live off.

[Chrysalis]

I think this is to cover possibility of disagreement between couples on each other’s perceived state of mind preceding obvious incompetence
Slow onset Alzheimer’s?
xxd09

I’m not sure this would be a legally valid way of proceeding in the UK. It would be covered by LPA, which certainly does need to be put in place. But even then, it is a grey area and there can be disagreements and conflicts, for which there isn’t a simple legal solution.

[JohnW]

Feeling my way here....
Shouldn't a lasting power of attorney identify at least one person to be an attorney, who is unlikely to go nutty before the power giver dies? Such as a trusted adult child. Doesn't that solve the problem without creating a new one?

[Chrysalis]

Feeling my way here....
Shouldn't a lasting power of attorney identify at least one person to be an attorney, who is unlikely to go nutty before the power giver dies? Such as a trusted adult child. Doesn't that solve the problem without creating a new one?

Yes, although it has to be clear in the LPA whether two attorneys are appointed joint and several, in which case they can act independently, or must act jointly. I believe you can name an alternate in the event of lack of capacity of the original. I suspect legal advice might be useful if something more complex like this was desired. And of course it doesn’t eliminate the possibility of conflict.

[Wuffle]

When you have died that will represent a considerable saving on overall expenses.
Is the IFA actually cheaper than you?

Then just get someone to keep an eye on the IFA.

W.

[r21442]

First post

Don’t underestimate the ability of the executory process to slow or stop all activity and look closely into anything that might have occurred after the time of death. I would advise being specific in your will about your express wishes to help speed the process but my experience of executory lawyers is the first thing they do is do nothing for 6 months expecting everyone’s affairs to be a mess and take time to find out. For the organised like yourself this becomes a frustration.