I would agree. Cash is assured to lose value during any type of inflationary period. Which we're in.JonnyDVM wrote: ↑Sun Apr 11, 2021 8:35 amKeeping an enormous sum in cash is the opposite of what I would suggest and I think most on this forum would agree. You might as well tell OP to load up on crypto.BlueOrange10 wrote: ↑Sun Apr 11, 2021 8:19 amDeleveraging is just as scary as inflation. Cash is king.
[Spouse recently passed away. Please help me handle his financial matters]
Re: So what is wrong with not investing?
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
Re: So what is wrong with not investing?
Cash did well during the great depression.JonnyDVM wrote: ↑Sun Apr 11, 2021 8:47 amOk. Well that’s just false. I don’t think I can engage on this debate anymore. Strait cash has always been the way to go except for every previous period in all of US history.BlueOrange10 wrote: ↑Sun Apr 11, 2021 8:40 amI think you need an economist as your advisor, not a financial advisor. Any economist will tell you about how emerging markets are about to get crushed with higher US yields due to their debt denominated in US dollars, potentially causing a deleveraging crisis and a mad scramble for US dollars. Cash is king.
Otherwise holding just cash since then lost money. And seems like he's trying to gaze into a crystal ball.
Last edited by jason2459 on Sun Apr 11, 2021 8:56 am, edited 1 time in total.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
-
- Posts: 80
- Joined: Sun Jun 16, 2019 9:30 pm
Re: So what is wrong with not investing?
I think it's funny you guys think you can predict inflation. If you can, go ahead and bet the house in the futures or forex market. You can make tons of money if you can predict inflation.
Last edited by BlueOrange10 on Sun Apr 11, 2021 8:56 am, edited 1 time in total.
- nisiprius
- Advisory Board
- Posts: 52105
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Re: So what is wrong with not investing?
You are "investing."Bennie wrote: ↑Sat Apr 10, 2021 8:57 pm I have a large sum of money to manage now so I don't get in trouble in the next 14 years: my husband left me his retirement accounts and I need to replace his income with those monies until I retire, at least. I have my own career and retirement account that, I hope, will be enough for me when I am 67 and on. I am 53 now and he was 63.
The market has been good to us over the last 20 years and I am very grateful. My retirement accounts have always been in a more aggressive investment mix and have recently been shifted to a Fidelity 2030 Freedom Fund. That is fine with me.
My husband's life savings, however, are something I woud like to protect, and I have zero tolerance for loss there- so I was thinking about taking it all out and putting it into an inherited IRA, into a Money Market (with 0 interest). Fidelity said, as I understood it, that they are FDIC insured up to 1.25 million dollars, which is much more than he left me, and so I am thinking the money would be safe there.
At this point, I really don't want to grow it, I just want to keep it and have it be there for me when/as I need it.
Is that the wrong idea? How do you estimate and calculate inflation and the future worth of money after inflation for 14 years out?
Saving is whatever you don't spend. Investing is where you choose to put that money. A bank account is a form of investment. And, historically, good bank accounts, money market mutual funds, and Treasury bills, have roughly kept up with inflation. In fact, Treasury bills are often named as an "inflation hedge," while bank accounts and money market funds have closely tracked Treasury bill rates.
For historical reasons, the word "investment" became associated with investing in securities--stocks and bonds. And for marketing reasons, brokerages and mutual fund companies like to make you think that you haven't "invested" your money if you haven't invested it in securities.
And for marketing reasons, banks and brokerages both want your money, and it is in brokerage's self-interest to try to say that you are not "investing" if you are not investing in securities.
"Cash" can mean physical currency, which represent a number of dollars that never changes. There are also non-interest-bearing bank accounts, in which the number of dollars never changes. But, normally, if you are reasonably smart shopper, your "cash" is in the form of something that pays interest, like a competitive-rate bank account or a money market mutual fund.
I am not going to express any opinion on whether you "should" invest a little more aggressively than a money market mutual fund. Very-low-risk investments, investments that never go down, "cash"-like investments, don't always keep up with inflation. But they have held up reasonable well, and are nowhere near as horrible as people trying to sell riskier investments would like you to think.
From inception in 1975 until today, here is how investments in the Vanguard Prime Money Market fund, and in 3-month Treasury bills, would have grown (or shrunk), inflation-adjusted. Shrinking lately, but not horrible. Over that long period of time, you would slowly have doubled your money--in actual buying power. And then, over the next decade, slowly lost about -13% of it to inflation. And no sudden big shocks.
Of course, the following chart, which is just in numbers of dollars, is an illusion, but the point is that during the days of high inflation, cash-like investments were actually growing pretty quickly and kept up. I had a six-month CD once that was paying over 13% APY.
Last edited by nisiprius on Sun Apr 11, 2021 9:00 am, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: So what is wrong with not investing?
I'm sorry, we haven't predicted anything. We're currently experiencing some Inflation. Cash would lose money. Even T-Bills have done better over time. I wouldn't sit on anything less.BlueOrange10 wrote: ↑Sun Apr 11, 2021 8:55 amI think it's funny you guys think you can predict inflation. If you can, go ahead and bet the house in the futures or forex market. You can make tons of money if you can predict inflation.
Current status. No predicting. March CPI info out this week.
https://www.bls.gov/mobile/
Last edited by jason2459 on Sun Apr 11, 2021 9:09 am, edited 1 time in total.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
-
- Posts: 11334
- Joined: Thu Dec 27, 2018 2:06 pm
Re: Spouse died in January: What taxes do I need to be aware of?
My condolences on the loss of your husband.
If you need assistance with/questions answered about the probate process, consider a consultation with a good estate attorney and a good accountant that they can recommend.
Whether you handle the estate/probate yourself or have expert assistance, you will need a complete list of all assets and liabilities as of the date of your husband’s death. List each one, the balance, account registration (individual, joint), and any beneficiary designations on the account. This list will help you (and the expert advisors, if any) understand which assets/liabilities will/will not need to go through probate versus which will pass to you directly due to account registration (i.e., jointly held) or account beneficiary designation.
One step at a time but also keep these items on your radar:
1) follow-up to be sure asset values are “stepped up” at date of death, if applicable, tax returns are filed appropriately, and that you get the assets transferred/retitled timely/properly.
2) Your estate documents (will, durable power-of-attorney, healthcare directives/representative) may need updating
3) Your account beneficiary designations may need updating.
If you need assistance with/questions answered about the probate process, consider a consultation with a good estate attorney and a good accountant that they can recommend.
Whether you handle the estate/probate yourself or have expert assistance, you will need a complete list of all assets and liabilities as of the date of your husband’s death. List each one, the balance, account registration (individual, joint), and any beneficiary designations on the account. This list will help you (and the expert advisors, if any) understand which assets/liabilities will/will not need to go through probate versus which will pass to you directly due to account registration (i.e., jointly held) or account beneficiary designation.
One step at a time but also keep these items on your radar:
1) follow-up to be sure asset values are “stepped up” at date of death, if applicable, tax returns are filed appropriately, and that you get the assets transferred/retitled timely/properly.
2) Your estate documents (will, durable power-of-attorney, healthcare directives/representative) may need updating
3) Your account beneficiary designations may need updating.
- nisiprius
- Advisory Board
- Posts: 52105
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Re: So what is wrong with not investing?
Physical cash in paper bills is "assured" to lose value to inflation.
Treasury bills, bank accounts, and money market mutual funds are not.
For example, from 1971 through 1985, inflation averaged 11.3% per year; yet Treasury bills eked out a positive real return of +0.9% per year.
No, you can't, unless you literally mean physical paper currency or a non-interest-bearing bank account. From 1926 through 2019, i.e. 94 years, the real return of Treasury bills averaged +0.44% per year. Over a period of 94 years, they kept up with inflation.Harry Livermore wrote: ↑Sun Apr 11, 2021 9:12 am But I can predict with 100% certainty that it will lose value to inflation over a long period of time.
I'm not saying putting all their money into Treasury bills or money market funds or competitive bank accounts is a great idea for everyone, but the idea that it is going to be savaged by inflation is the result of confusing "cash" in the sense of non-interest-bearing cash, with "cash" in the sense of interest-earning Treasury bills or bank accounts or money market mutual funds. They may lose some to inflation, they may gain some over inflation, and historically they have tended to roughly track inflation.
Last edited by nisiprius on Sun Apr 11, 2021 9:50 am, edited 3 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
-
- Posts: 80
- Joined: Sun Jun 16, 2019 9:30 pm
Re: So what is wrong with not investing?
I honestly haven't experienced any inflation. My rent, utilities, food, etc. have remained the exact same as last year. Inflation really only affects heavy discretionary spenders.
Re: So what is wrong with not investing?
Many have experienced significant inflation over what CPI reports. Regional fluctuations are common. I have seen inflation in many ways around me from waste management pick up fees, milk, gas prices, etc that I spend money on to home prices and cars that I don't plan to spend money on right now. Nothing to do with heavy discretionary spending however you may define it.BlueOrange10 wrote: ↑Sun Apr 11, 2021 9:03 amI honestly haven't experienced any inflation. My rent, utilities, food, etc. have remained the exact same as last year. Inflation really only affects heavy discretionary spenders.
Last edited by jason2459 on Sun Apr 11, 2021 9:12 am, edited 1 time in total.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
Re: So what is wrong with not investing?
I agree. Except for possibly some bank accounts and some money markets.nisiprius wrote: ↑Sun Apr 11, 2021 9:02 amPhysical cash in paper bills is "assured" to lose value to inflation. Treasury bills, bank accounts, and money market mutual funds are not.
For example, from 1971 through 1985, inflation averaged 11.3% per year; yet Treasury bills eked out a positive real return of +0.9% per year.
Edited to added to the quote which was edited after I had already quoted. I still agree and mentioned above I wouldn't sit in anything less then T-bills.
Last edited by jason2459 on Sun Apr 11, 2021 9:18 am, edited 2 times in total.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
- Harry Livermore
- Posts: 1927
- Joined: Thu Apr 04, 2019 5:32 am
Re: So what is wrong with not investing?
Bennie, I am very sorry for your loss. As others have suggested (here and on your other posts), don't do anything rash. I think, for now, your instinct of putting it into a MM fund is perfectly fine while you grieve and sort through things. It might even be OK to leave it there for a few years. But I can predict with 100% certainty that it will lose value to inflation over a long period of time. If you want to preserve the power of that money, you will need to put some of it in equities. If you are OK with it being worth slightly less (or perhaps radically less; no one knows) at some point in the future, you can simply leave it in the MM fund.
I will let the resident Big Brains Of BH give you an idea of how to estimate inflation; I, with a small brain, simply use one of the many online inflation calculators. I have long suspected that the "official" inflation metrics are often lower than my "personal" rate of inflation.
This is a terrific and well-moderated online community and you are fortunate to have shared your situation with the group. You will receive good advice. Best wishes.
Cheers
ETA: Nisiprius is correct (see response below) that I cannot say this with 100% accuracy. But I think you should consider some asset mix that involves equities, eventually, so as to have an inflation hedge.
Last edited by Harry Livermore on Sun Apr 11, 2021 11:24 am, edited 1 time in total.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Bennie - In order to give appropriate advice, it's best to keep all the information in one spot. What's mentioned for one situation is relevant to another. I merged all of your questions into a single thread. Everything is related to your portfolio and legal documents.
Just ask whatever question you have in this thread and someone will help you. Our experienced members deal with this all the time, don't worry about it.
If you don't understand something, please let us know and we'll try again.
Just ask whatever question you have in this thread and someone will help you. Our experienced members deal with this all the time, don't worry about it.
If you don't understand something, please let us know and we'll try again.
-
- Posts: 80
- Joined: Sun Jun 16, 2019 9:30 pm
Re: So what is wrong with not investing?
Inflation only matters to the extent of your spending. If you only spend $10k a year, your costs are only going up $200 with 2% inflation. Inflation is only a big deal if you have lots of spending (i.e. high cost of living).jason2459 wrote: ↑Sun Apr 11, 2021 9:06 am Many have experienced significant inflation over what CPI reports. Regional fluctuations are common. I have seen inflation in many ways around me from waste management pick up fees, milk, gas prices, etc that I spend money on to home prices and cars that I don't plan to spend money on right now. Nothing to do with heavy discretionary spending how ever you may define it.
-
- Posts: 3341
- Joined: Mon Apr 16, 2012 10:48 pm
- Location: Denver area. Former Texan.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Bennie-
You have so much going on. Like the old elephant analogy- one bite at a time.
1) I agree. The IRA can sit in money market for a few months until you can get there. When someone says they have no tolerance for risk of loss, then money market, CDs, savings accounts are where that money goes. I think when the cloud lifts, you will change your mind but follow your instincts right now. Are you going to miss some market gains? Probably. Or you might miss some losses. If you leave it in cash for a year, the inflation hit is not that bad.
2) File the 2020 taxes.
3) Retitle assets, probate the will. It sounds like it will be pretty straightforward and you can do most of it yourself but getting the advice of a local attorney is probably wise. On any taxable asset, get the cost basis step up. Make sure you have your own credit cards. Cancel his cards. Make sure you have your bills in order.
4) Estimate the 2021 taxes. If you feel comfortable running it through TurboTax yourself, then you can do a lot of scenarios on Roth conversions. You have until December to do the conversion. Still plenty of time. If you want, ask questions here. But when you do, it is important to give complete information. And just expect people to tell you that you have too much cash. Everyone is entitled to their opinion.
5) Once all of that is fine, you’ll be able to think through your investment plan, asset allocation and the rest.
Making big financial decisions while grieving is tough. I am sorry for your loss, but you can do this.
You have so much going on. Like the old elephant analogy- one bite at a time.
1) I agree. The IRA can sit in money market for a few months until you can get there. When someone says they have no tolerance for risk of loss, then money market, CDs, savings accounts are where that money goes. I think when the cloud lifts, you will change your mind but follow your instincts right now. Are you going to miss some market gains? Probably. Or you might miss some losses. If you leave it in cash for a year, the inflation hit is not that bad.
2) File the 2020 taxes.
3) Retitle assets, probate the will. It sounds like it will be pretty straightforward and you can do most of it yourself but getting the advice of a local attorney is probably wise. On any taxable asset, get the cost basis step up. Make sure you have your own credit cards. Cancel his cards. Make sure you have your bills in order.
4) Estimate the 2021 taxes. If you feel comfortable running it through TurboTax yourself, then you can do a lot of scenarios on Roth conversions. You have until December to do the conversion. Still plenty of time. If you want, ask questions here. But when you do, it is important to give complete information. And just expect people to tell you that you have too much cash. Everyone is entitled to their opinion.
5) Once all of that is fine, you’ll be able to think through your investment plan, asset allocation and the rest.
Making big financial decisions while grieving is tough. I am sorry for your loss, but you can do this.
- Harry Livermore
- Posts: 1927
- Joined: Thu Apr 04, 2019 5:32 am
Re: So what is wrong with not investing?
Sorry, I meant a bank account, which is currently as close to 0% as you can get.nisiprius wrote: ↑Sun Apr 11, 2021 9:02 am
No, you can't, unless you literally mean physical paper currency or a non-interest-bearing bank account. From 1926 through 2019, i.e. 94 years, the real return of Treasury bills averaged +0.44% per year. Over a period of 94 years, they kept up with inflation.
And I probably should not post in absolutes.
But if the OP is going to park $600K or whatever in a money market fund and leave it alone so it does not "lose value" via investing in equities, she will likely lose real purchasing power over the next 14 years.
Cheers
ETA: I amended my post above with a strikethrough. Again, speaking in absolutes is often a bad idea.
-
- Posts: 1165
- Joined: Tue Feb 11, 2020 7:32 am
Re: [Spouse recently passed away. Please help me handle his financial matters]
I too am sorry for your loss.
I didn't read all the posts (glad lots of people chiming in) but I wanted to give you my input. There are lots of financial people who will want to 'help' you but are really going to take 1% to 2% of your assets every year if you let them, and they will probably provide returns that are less than what you would get if you used the simple 3 fund portfolio recommended by many on this site. (Two percent doesn't sound like a lot but it really adds up over the years.) If you do need help, consider Vanguard's PAS (Personal Advisor Service) which charges 0.3%. (I have not used it, I do my own planning with help from this website.)
I trust the people on this site to give advice that is usually very good.
I didn't read all the posts (glad lots of people chiming in) but I wanted to give you my input. There are lots of financial people who will want to 'help' you but are really going to take 1% to 2% of your assets every year if you let them, and they will probably provide returns that are less than what you would get if you used the simple 3 fund portfolio recommended by many on this site. (Two percent doesn't sound like a lot but it really adds up over the years.) If you do need help, consider Vanguard's PAS (Personal Advisor Service) which charges 0.3%. (I have not used it, I do my own planning with help from this website.)
I trust the people on this site to give advice that is usually very good.
Re: So what is wrong with not investing?
Ha ha ha ha!!! A welcome set of items for advice! Thank you so much for taking the time. Yes, that is what I thought: keep it together for now and get on my feet again - can always invest again next year? I just walked up the hill from the mail box and thought 'maybe this financial planning is a mute point' I felt so weak I thought I may be dying myself. Nothing really hurts more than usual but I just can't walk right - I have no energy. Could be grief, I guess. I cry every day and it takes it out of me. In a way I don't care if I die and then again, I am still avoiding COVID, so I must have some will to live left. It may just take a long long time - not weeks but months or years and I don't want to have to worry about this money disappearing or having to drink from the firehose now to learn investing. We never worried about it, other than paying our debts off and saving as much as possible. We figured the retirement funds are already in the stock market - that is enough. We both have graduate degrees and did not get out of school until late in life (I was 30 and my husband almost 40 since he had worked 10 years as a mechanic before going back to school) so we had nada and no experience or means to invest. That's why I have to learn it now. But maybe I can keep the money in a MM for now and breathe a little first. I never had a large sum of money to manage. I am curious about inflation and what I need to learn about that to be ready for the cash to lose value and plan appropriately. I have learned the [Principle*(1+interest rate)^years = Furture value ] calculation to show myself how different percent interest rates affect compound interest over the years but I never learned to estimate inflation to show how devalued the money can become.Sandtrap wrote: ↑Sat Apr 10, 2021 9:43 pm Condolences
For now, choose accounts and or funds that have
Security of Principle (includes CD's, Treasuries, Money Market, etc)
Liquidity
Accessibility
Read the forum wiki on “Windfalls”
Don’t do anything until you read it.
Avoid friendly helpful;
Financial advisors
Wealth managers
Bank advisors
Helpful uncle Joe who knows about money and investing
Etc.
j
I will read the "windfalls" information next. Thanks for that!
- Sandtrap
- Posts: 19582
- Joined: Sat Nov 26, 2016 5:32 pm
- Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.
Re: So what is wrong with not investing?
here is the link to windfallsBennie wrote: ↑Sun Apr 11, 2021 12:42 pmHa ha ha ha!!! A welcome set of items for advice! Thank you so much for taking the time. Yes, that is what I thought: keep it together for now and get on my feet again - can always invest again next year? I just walked up the hill from the mail box and thought 'maybe this financial planning is a mute point' I felt so weak I thought I may be dying myself. Nothing really hurts more than usual but I just can't walk right - I have no energy. Could be grief, I guess. I cry every day and it takes it out of me. In a way I don't care if I die and then again, I am still avoiding COVID, so I must have some will to live left. It may just take a long long time - not weeks but months or years and I don't want to have to worry about this money disappearing or having to drink from the firehose now to learn investing. We never worried about it, other than paying our debts off and saving as much as possible. We figured the retirement funds are already in the stock market - that is enough. We both have graduate degrees and did not get out of school until late in life (I was 30 and my husband almost 40 since he had worked 10 years as a mechanic before going back to school) so we had nada and no experience or means to invest. That's why I have to learn it now. But maybe I can keep the money in a MM for now and breathe a little first. I never had a large sum of money to manage. I am curious about inflation and what I need to learn about that to be ready for the cash to lose value and plan appropriately. I have learned the [Principle*(1+interest rate)^years = Furture value ] calculation to show myself how different percent interest rates affect compound interest over the years but I never learned to estimate inflation to show how devalued the money can become.Sandtrap wrote: ↑Sat Apr 10, 2021 9:43 pm Condolences
For now, choose accounts and or funds that have
Security of Principle (includes CD's, Treasuries, Money Market, etc)
Liquidity
Accessibility
Read the forum wiki on “Windfalls”
Don’t do anything until you read it.
Avoid friendly helpful;
Financial advisors
Wealth managers
Bank advisors
Helpful uncle Joe who knows about money and investing
Etc.
j
I will read the "windfalls" information next. Thanks for that!
MANAGING A WINDFALL
https://www.bogleheads.org/wiki/Managing_a_windfall
Investing behavior pitfalls (emotions, etc)
Investing Behavior Pitfalls
https://www.bogleheads.org/wiki/Behavioral_pitfalls
Getting Started
GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started
Suggested Reading:
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Forum Library of Investing Advice with links
https://www.bogleheads.org/wiki/Main_Page
j
-
- Posts: 199
- Joined: Mon Mar 24, 2008 2:46 pm
Re: [Spouse recently passed away. Please help me handle his financial matters]
Bennie, I am so very sorry for your loss.
As I read through the responses, I couldn't imagine how you weren't overwhelmed by terminology and the plethora of topics. I took a shot below at sorting some priorities/timing. NOT as a firm or all-inclusive guide, but as a possible framework for you to create your own (and BH experts to add to/refine.)
Some of these are big, have sub-actions ... but no sense listing the subactions until you learn about the overarching elements. (IOW, you're going to have lots more to-dos.) Some of the specifics mentioned in this thread might not apply to you, but you can't know that until you learn about the topic. (Roth IRAs/conversions, for example.)
The main point is that everything does not need to be done at once. Sort and prioritize. Learn before acting, yet with a sharp eye on deadlines for acting. Spread out what you can so you don't go nuts and don't take actions that must be undone .. or can't be undone.
DRAFT
By end of April
Wrap up 2020 taxes
Get death certificates if you don’t already have
Find out how things were left to you and gather paperwork:
House title
Retirement accounts (via will or name beneficiary)
Banking accounts (leave at least one joint acct for depositing checks) / CDs
Life Insurance
Any brokerage account?/Taxable investments?
Other accounts/possessions
Explore Boglehead wiki (note the Acronym/Abbreviation resource in the left sidebar)
Sort through topics in this thread and assign them a when-to-learn-about month
Learn to recognize and ignore the section in many BH threads that is a disputing-money-related-topics/theories-as-sport tangent. The participants have a fine time. Rarely is responsive to OP. (Bet you can already spot that tangent in this thread.)
List future to-dos arising out of these activities and add them to calendar
May
Learn (Boglehead wiki great for many) about rules governing/maximizing:
Specifics of DH’s retirement accounts/company benefits
Roth IRAs
Traditional IRAs
Inherited Trad IRAs
Roth vs. Trad IRAs – when to use which
Roth conversions / Rules
How change in tax status from MFJ to single will affect taxes
What you can do before end of 2021 as MFJ but not after. List all. Revisit in Aug.
Finalize in late Oct if you are going to act on these.
List future to-dos arising out of these activities and add them to calendar
June
Rough estimate of 2021 tax outlook – possibly adjust withholding
Learn about impact of inflation over time on next egg
Learn about asset allocation
Run scenarios through i-ORP
Change default values to what your monies are actually earning.
Assess tax consequences/disposable income consequences of your plan vs. various
suggested changes
List future to-dos arising out of these activities and add them to calendar
July
Write IPS (Investment Policy Statement) – this is for you. To set out what you’re trying to
achieve and your plan to get there.
Stress-test your IPS vs. i-ORP other calculators that make sense to you and whose level of
complexity match your desires.
Write out list of steps to implement your plan and when to do the steps.
List future to-dos arising out of these activities and add them to calendar
Aug.
Begin implementing your plan
Revisit possible actions to take because 2021 is an MFJ tax filing year before switching to single
List future to-dos arising out of these activities and add them to calendar
Sept
Check in with your plan to implement – need any changes?
Assess 2021 tax picture – possibly adjust withholding again
List future to-dos arising out of these activities and add them to calendar
Oct
Finalize in late Oct if you are going to act on any remaining MFJ>Single instigated actions.
List future to-dos arising out of these activities and add them to calendar
Nov
Prepare anything that must be done before the end of the calendar year
Recheck that you’ve completed all calendar items to day
Jan. 2022
Change withholding to Single
As I read through the responses, I couldn't imagine how you weren't overwhelmed by terminology and the plethora of topics. I took a shot below at sorting some priorities/timing. NOT as a firm or all-inclusive guide, but as a possible framework for you to create your own (and BH experts to add to/refine.)
Some of these are big, have sub-actions ... but no sense listing the subactions until you learn about the overarching elements. (IOW, you're going to have lots more to-dos.) Some of the specifics mentioned in this thread might not apply to you, but you can't know that until you learn about the topic. (Roth IRAs/conversions, for example.)
The main point is that everything does not need to be done at once. Sort and prioritize. Learn before acting, yet with a sharp eye on deadlines for acting. Spread out what you can so you don't go nuts and don't take actions that must be undone .. or can't be undone.
DRAFT
By end of April
Wrap up 2020 taxes
Get death certificates if you don’t already have
Find out how things were left to you and gather paperwork:
House title
Retirement accounts (via will or name beneficiary)
Banking accounts (leave at least one joint acct for depositing checks) / CDs
Life Insurance
Any brokerage account?/Taxable investments?
Other accounts/possessions
Explore Boglehead wiki (note the Acronym/Abbreviation resource in the left sidebar)
Sort through topics in this thread and assign them a when-to-learn-about month
Learn to recognize and ignore the section in many BH threads that is a disputing-money-related-topics/theories-as-sport tangent. The participants have a fine time. Rarely is responsive to OP. (Bet you can already spot that tangent in this thread.)
List future to-dos arising out of these activities and add them to calendar
May
Learn (Boglehead wiki great for many) about rules governing/maximizing:
Specifics of DH’s retirement accounts/company benefits
Roth IRAs
Traditional IRAs
Inherited Trad IRAs
Roth vs. Trad IRAs – when to use which
Roth conversions / Rules
How change in tax status from MFJ to single will affect taxes
What you can do before end of 2021 as MFJ but not after. List all. Revisit in Aug.
Finalize in late Oct if you are going to act on these.
List future to-dos arising out of these activities and add them to calendar
June
Rough estimate of 2021 tax outlook – possibly adjust withholding
Learn about impact of inflation over time on next egg
Learn about asset allocation
Run scenarios through i-ORP
Change default values to what your monies are actually earning.
Assess tax consequences/disposable income consequences of your plan vs. various
suggested changes
List future to-dos arising out of these activities and add them to calendar
July
Write IPS (Investment Policy Statement) – this is for you. To set out what you’re trying to
achieve and your plan to get there.
Stress-test your IPS vs. i-ORP other calculators that make sense to you and whose level of
complexity match your desires.
Write out list of steps to implement your plan and when to do the steps.
List future to-dos arising out of these activities and add them to calendar
Aug.
Begin implementing your plan
Revisit possible actions to take because 2021 is an MFJ tax filing year before switching to single
List future to-dos arising out of these activities and add them to calendar
Sept
Check in with your plan to implement – need any changes?
Assess 2021 tax picture – possibly adjust withholding again
List future to-dos arising out of these activities and add them to calendar
Oct
Finalize in late Oct if you are going to act on any remaining MFJ>Single instigated actions.
List future to-dos arising out of these activities and add them to calendar
Nov
Prepare anything that must be done before the end of the calendar year
Recheck that you’ve completed all calendar items to day
Jan. 2022
Change withholding to Single
Re: [Spouse recently passed away. Please help me handle his financial matters]
So, sorry for your loss, dealing with caregiving and finances is overwhelming for anyone. If no one has yet provided a link, here is the link to what VA taxes under probate and the menu on this web page also has a link to explain VA's estate/inheritance tax (which for the most part seems to have ended).
https://www.tax.virginia.gov/probate-tax
As others have mentioned be sure to step up the basis on your husband's share of any assets for any future transactions and valuations.
While you can no doubt handle settling your husband's estate, it will still take some work. Try to find a lawyer you trust who will allow you to do what you can of the work and they will do the rest for an hourly fee as needed or use them as reference for questions. Certified Elder lawyers may provide estate help and insight into future estate planning for yourself. A CPA may also be a good resource for both taxes and some estate questions/work. It may be good to have both, as you can compare answers, and use the best advice of both.
One other thing, one of your posts mentioned FDIC insurance. FDIC insurance is only $250,000 per bank per each type of account FDIC insures. So, you can e.g. have $250,000 on all your IRA money (Roth and Traditional) titled in the same way at one bank, and then also have $250,000 on your regular (nonIRA) money all titled in the same way at that bank, etc. You no doubt had joint accounts, and possibly individual accounts and IRA accounts and possibly POD (payable on death accounts with a beneficiary) all at the same bank. You will need to reconsider your FDIC insurance and how your accounts will be set up going forward, since you won't have joints accounts and may not have any POD accounts, etc. FDIC gives you a short amount of time to get this all sorted out and accounts retitled. But you need to be sure to retitle accounts and possibly move money around to be sure all your assets at a particular bank are FDIC insured (or NCUA at a credit union). Brokerage insurance is a different sort of thing and that's under SIPC.
Check out FDIC insurance coverage by type of account here: https://edie.fdic.gov/
Best of luck and definitely post any additional questions.
https://www.tax.virginia.gov/probate-tax
As others have mentioned be sure to step up the basis on your husband's share of any assets for any future transactions and valuations.
While you can no doubt handle settling your husband's estate, it will still take some work. Try to find a lawyer you trust who will allow you to do what you can of the work and they will do the rest for an hourly fee as needed or use them as reference for questions. Certified Elder lawyers may provide estate help and insight into future estate planning for yourself. A CPA may also be a good resource for both taxes and some estate questions/work. It may be good to have both, as you can compare answers, and use the best advice of both.
One other thing, one of your posts mentioned FDIC insurance. FDIC insurance is only $250,000 per bank per each type of account FDIC insures. So, you can e.g. have $250,000 on all your IRA money (Roth and Traditional) titled in the same way at one bank, and then also have $250,000 on your regular (nonIRA) money all titled in the same way at that bank, etc. You no doubt had joint accounts, and possibly individual accounts and IRA accounts and possibly POD (payable on death accounts with a beneficiary) all at the same bank. You will need to reconsider your FDIC insurance and how your accounts will be set up going forward, since you won't have joints accounts and may not have any POD accounts, etc. FDIC gives you a short amount of time to get this all sorted out and accounts retitled. But you need to be sure to retitle accounts and possibly move money around to be sure all your assets at a particular bank are FDIC insured (or NCUA at a credit union). Brokerage insurance is a different sort of thing and that's under SIPC.
Check out FDIC insurance coverage by type of account here: https://edie.fdic.gov/
Best of luck and definitely post any additional questions.
Re: [Spouse recently passed away. Please help me handle his financial matters]
A trusts and estates lawyer would probably be a better fit for this. The original poster is only 53.water2357 wrote: ↑Sun Apr 11, 2021 2:58 pm ...
While you can no doubt handle settling your husband's estate, it will still take some work. Try to find a lawyer you trust who will allow you to do what you can of the work and they will do the rest for an hourly fee as needed or use them as reference for questions. Certified Elder lawyers may provide estate help and insight into future estate planning for yourself. ...
Re: [Spouse recently passed away. Please help me handle his financial matters]
Wow - thank you so much for all the replies! So much information!
I enjoyed the sparring, too. Best results come from discussions with different view points and a bit of exchange - friendly ping pong - I did bring it up: why invest, why not cash. I learned what I needed to learn, I think. More to come, I'm sure.
Having started reading the Wiki on windfalls, I am delighted to see that the advice is along the lines of what I was thinking: hold on. Everything goes into an inherited IRA with immediate access (not deferred for years) and everything goes into a Money Market (basically savings account with 0 interest) for now. It won't hurt anything for 1 year. I won't lose any principle and inflation is not going to ruin my life in that time. I can recover from the shock of losing the love of my life and may, next year, put the money in CD's, a "staggered ladder of U.S. government securities that matches your time horizon", or something else, maybe even stocks, as I see how I can manage.
I may start a Roth-IRA for the years past 6.5 years from now (currently 53 yo)- but it would only make sense, really, if I do eventually start investing the monies such that there is an interest rate that pays something (that is the only advantage of a Roth-IRA from what I can see so far, that you can keep the interest without taxes on it, rather than earn interest on the pre-tax amount in a regular IRA). I have no idea how my income will go: larger later or smaller later. So that part of the Roth-IRA calculation is not so easy for me to decide on.
Two points and two questions:
Points
1) Many say to get a lawyer or accountant to take stress of me but I feel that this would be 10x more stressful for me, personally, since I don't know how to find such people (fee based, certified, fiduciary, experienced, worth it, trustworthy - I have even tired and not had much luck - online or through references from friends) and I am a DIY person in so many ways and have often been disappointed when I got "help". Also, I think our 'case' is pretty simple in a lot of ways: we did not have much and don't have children. I don't think there are any investments that need to be re-set, as some emphasize. All we had was our retirement accounts and those were not that big since we were in school forever and did not work and earn that long. Any words of wisdom that could calm my protective self and show me why professional help may be of benefit?
I am soooo glad my excellent manager at work recommended this forum and soooo glad you'all are here!!! I hope I can return some help to others in the (very far) future when I have learned a lot more. I have been on other forums before but never for financial stuff.
2) We filed married filling separately before my husband died because we wanted to play with our withholding and get our own tax returns, mostly, I think. So that won't be a change for me now. We had seperate bank acocunts and one common account for common expenses (mortgage, groceries, power, phone, etc.) but, on advice from the banker, I closed his account (to stop all debits and deposits) and took his name off our common account. The banker said that this would help to keep people from impersonating him and getting access to the common acount but I got several checks in his name now... (stimulus check, refund from pharmacy from monthly drug shippment that I returned, maybe a tax return?) So there goes the "listening to help" confidence again. I wanted to keep his name on the common acocunt for now but went with the advice from the professional. Hm. May have been better if I had thought about it and looked into it myself before doing it maybe.
Questions
1) Ok, so the important money is in a beneficiary 401k, administered by my husband's place of work for me now. Fidelity transferred it into a beneficiary account in my name with my SS# upon the company's say-so since I am listed as beneficary. If I want to, I can leave it there. But if I withdraw even one dollar, they want me to take it all out and roll it to something else (inherited IRA or IRA). The only advantage of leaving it in the 401k is that it is protected from personal law suits, as far as I can see. Unfortuately, I can't leave it there, though, since I need to replace his income and have access to the money before I am 59 and 1/2. So I think I want to roll it into a MM in an inherited IRA. How do I do this? On the phone with Fidelity? Are there fees I should be aware of? How do they make money (for doing these transactions and having this account for me)? What paperwork should I expect and sign? Any taxes yet (I am not taking anything out yet - we have a small savings account buffer that I am using first)? When should I roll this over (when do they freeze the amount? it is still in a Fidelity 2020 freedom fund and fluctuating a bit)?
2) There is a small amount of money - same way - from my husband having worked for 1 year at a different company. I was thinking about doing the same thing: inherited IRA and Money Market, for now. The other account is with Vanguard. I was thinking to transfer some of the Fidelity monies to Vanguard and have two accounts with almost the same balance- I don't know - just my paranoia about keeping things simple but not all in one place. Is this a good idea? How is it done? Fees? I am still not 100% sure about FDIC insurance - Fidelity rep said they are insured up t 1.25 million dollars in the MM (much more than we have, so that would be fine) - I asked about the 250k limit, and he said they keep it in 5 different banks, from what I understood. Does that make sense - sound right - how do you check on it? I really don't have much luck with professionals - when I tried to reach the same gentleman again, his direct dial did not work and after an hour of listening to their music and hearing a machine say every 5 seconds how important my call is to them, I got a different rep in their transition team who could not find my guy but luckily could find his notes on my account from the date I told him from my notes and it turns out the person is now not in active status anymore - after he guaranteed me he would be available any time just 2 weeks ago - hm - I hope he won the lottery and did not get COVID - not sure what happened there.
I enjoyed the sparring, too. Best results come from discussions with different view points and a bit of exchange - friendly ping pong - I did bring it up: why invest, why not cash. I learned what I needed to learn, I think. More to come, I'm sure.
Having started reading the Wiki on windfalls, I am delighted to see that the advice is along the lines of what I was thinking: hold on. Everything goes into an inherited IRA with immediate access (not deferred for years) and everything goes into a Money Market (basically savings account with 0 interest) for now. It won't hurt anything for 1 year. I won't lose any principle and inflation is not going to ruin my life in that time. I can recover from the shock of losing the love of my life and may, next year, put the money in CD's, a "staggered ladder of U.S. government securities that matches your time horizon", or something else, maybe even stocks, as I see how I can manage.
I may start a Roth-IRA for the years past 6.5 years from now (currently 53 yo)- but it would only make sense, really, if I do eventually start investing the monies such that there is an interest rate that pays something (that is the only advantage of a Roth-IRA from what I can see so far, that you can keep the interest without taxes on it, rather than earn interest on the pre-tax amount in a regular IRA). I have no idea how my income will go: larger later or smaller later. So that part of the Roth-IRA calculation is not so easy for me to decide on.
Two points and two questions:
Points
1) Many say to get a lawyer or accountant to take stress of me but I feel that this would be 10x more stressful for me, personally, since I don't know how to find such people (fee based, certified, fiduciary, experienced, worth it, trustworthy - I have even tired and not had much luck - online or through references from friends) and I am a DIY person in so many ways and have often been disappointed when I got "help". Also, I think our 'case' is pretty simple in a lot of ways: we did not have much and don't have children. I don't think there are any investments that need to be re-set, as some emphasize. All we had was our retirement accounts and those were not that big since we were in school forever and did not work and earn that long. Any words of wisdom that could calm my protective self and show me why professional help may be of benefit?
I am soooo glad my excellent manager at work recommended this forum and soooo glad you'all are here!!! I hope I can return some help to others in the (very far) future when I have learned a lot more. I have been on other forums before but never for financial stuff.
2) We filed married filling separately before my husband died because we wanted to play with our withholding and get our own tax returns, mostly, I think. So that won't be a change for me now. We had seperate bank acocunts and one common account for common expenses (mortgage, groceries, power, phone, etc.) but, on advice from the banker, I closed his account (to stop all debits and deposits) and took his name off our common account. The banker said that this would help to keep people from impersonating him and getting access to the common acount but I got several checks in his name now... (stimulus check, refund from pharmacy from monthly drug shippment that I returned, maybe a tax return?) So there goes the "listening to help" confidence again. I wanted to keep his name on the common acocunt for now but went with the advice from the professional. Hm. May have been better if I had thought about it and looked into it myself before doing it maybe.
Questions
1) Ok, so the important money is in a beneficiary 401k, administered by my husband's place of work for me now. Fidelity transferred it into a beneficiary account in my name with my SS# upon the company's say-so since I am listed as beneficary. If I want to, I can leave it there. But if I withdraw even one dollar, they want me to take it all out and roll it to something else (inherited IRA or IRA). The only advantage of leaving it in the 401k is that it is protected from personal law suits, as far as I can see. Unfortuately, I can't leave it there, though, since I need to replace his income and have access to the money before I am 59 and 1/2. So I think I want to roll it into a MM in an inherited IRA. How do I do this? On the phone with Fidelity? Are there fees I should be aware of? How do they make money (for doing these transactions and having this account for me)? What paperwork should I expect and sign? Any taxes yet (I am not taking anything out yet - we have a small savings account buffer that I am using first)? When should I roll this over (when do they freeze the amount? it is still in a Fidelity 2020 freedom fund and fluctuating a bit)?
2) There is a small amount of money - same way - from my husband having worked for 1 year at a different company. I was thinking about doing the same thing: inherited IRA and Money Market, for now. The other account is with Vanguard. I was thinking to transfer some of the Fidelity monies to Vanguard and have two accounts with almost the same balance- I don't know - just my paranoia about keeping things simple but not all in one place. Is this a good idea? How is it done? Fees? I am still not 100% sure about FDIC insurance - Fidelity rep said they are insured up t 1.25 million dollars in the MM (much more than we have, so that would be fine) - I asked about the 250k limit, and he said they keep it in 5 different banks, from what I understood. Does that make sense - sound right - how do you check on it? I really don't have much luck with professionals - when I tried to reach the same gentleman again, his direct dial did not work and after an hour of listening to their music and hearing a machine say every 5 seconds how important my call is to them, I got a different rep in their transition team who could not find my guy but luckily could find his notes on my account from the date I told him from my notes and it turns out the person is now not in active status anymore - after he guaranteed me he would be available any time just 2 weeks ago - hm - I hope he won the lottery and did not get COVID - not sure what happened there.
Last edited by Bennie on Sun Apr 11, 2021 11:36 pm, edited 2 times in total.
-
- Posts: 3341
- Joined: Mon Apr 16, 2012 10:48 pm
- Location: Denver area. Former Texan.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Let’s see-
On the outside help, it is more to make sure you are not missing anything particular to your state. I would do some homework and at least consult with someone to explain your plans and have them give you their thoughts.
I would not worry about the checks. Go to the same banker and I bet he’ll help.
You can call Fidelity to roll the account over. Might be able to do it online too. Depending upon what it is invested in, you might have to sell first before you rollover but since you are going to money market, you don’t care. All of that will be free and tax free.
Keep the Vanguard account if it makes you feel better. You can move it later if you want.
In terms of other assets that might have step up in basis- the house comes to mind and if any of the cars are collectibles.
On the outside help, it is more to make sure you are not missing anything particular to your state. I would do some homework and at least consult with someone to explain your plans and have them give you their thoughts.
I would not worry about the checks. Go to the same banker and I bet he’ll help.
You can call Fidelity to roll the account over. Might be able to do it online too. Depending upon what it is invested in, you might have to sell first before you rollover but since you are going to money market, you don’t care. All of that will be free and tax free.
Keep the Vanguard account if it makes you feel better. You can move it later if you want.
In terms of other assets that might have step up in basis- the house comes to mind and if any of the cars are collectibles.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Bennie
So sorry for your loss, and the resulting pain, loneliness and heartache. First thing is to do what you need to in order to take care of yourself. You will not "get over it" but in time the pain may be less acute, simply because it is not so new.
In regards to the money, you have come to the right place.
For clarity
1. House: Do you own, and if so, Is the deed in both of your names?
2. House: If you own, is the mortgage in both of your names?
3. Based on your posts, please confirm that the only inherited monies are Husbands 401k's, which you want to use to fund living expenses from now until your retirement
a. Husbands 401k from employer at time of death
b. Husbands 401k from previous employer - you indicated this one is smaller - how long would these funds last you at your projected withdrawal rate?
4. Is there a life insurance policy? Are there any other accounts you are inheriting?
5. You indicated you and your husband each filed taxes as single people. Is that correct, or did you mean to say you filed as married filing separate? The reason this may matter is that there may be different regulations that pertain to a legal spouse inheriting an IRA vs a non-married partner inheriting an IRA. It would be helpful if you could clarify that.
For the time being, you are probably best off doing NOTHING with the 401k's until you get your gameplan together.
6. How long will the savings you are using to augment your income last? Also, see question 3 b above.
Whatever you do, DO NOT mix the 401k monies with your own IRA's. You will want to keep those segregated and separate.
Part of your gameplan should be to examine your own 401k assets and project social security to confirm those, combined, will be sufficient to support yourself at retirement. If so, you plan to use your husbands accounts from now until retirement would work. If not, a different plan may be in order.
Again, condolences. I know it's not much from a stranger on the internet, but at least with the mechanics of the financial stuff you are not alone. This is a fine group of people who will help lead you in the correct direction.
So sorry for your loss, and the resulting pain, loneliness and heartache. First thing is to do what you need to in order to take care of yourself. You will not "get over it" but in time the pain may be less acute, simply because it is not so new.
In regards to the money, you have come to the right place.
For clarity
1. House: Do you own, and if so, Is the deed in both of your names?
2. House: If you own, is the mortgage in both of your names?
3. Based on your posts, please confirm that the only inherited monies are Husbands 401k's, which you want to use to fund living expenses from now until your retirement
a. Husbands 401k from employer at time of death
b. Husbands 401k from previous employer - you indicated this one is smaller - how long would these funds last you at your projected withdrawal rate?
4. Is there a life insurance policy? Are there any other accounts you are inheriting?
5. You indicated you and your husband each filed taxes as single people. Is that correct, or did you mean to say you filed as married filing separate? The reason this may matter is that there may be different regulations that pertain to a legal spouse inheriting an IRA vs a non-married partner inheriting an IRA. It would be helpful if you could clarify that.
For the time being, you are probably best off doing NOTHING with the 401k's until you get your gameplan together.
6. How long will the savings you are using to augment your income last? Also, see question 3 b above.
Whatever you do, DO NOT mix the 401k monies with your own IRA's. You will want to keep those segregated and separate.
Part of your gameplan should be to examine your own 401k assets and project social security to confirm those, combined, will be sufficient to support yourself at retirement. If so, you plan to use your husbands accounts from now until retirement would work. If not, a different plan may be in order.
Again, condolences. I know it's not much from a stranger on the internet, but at least with the mechanics of the financial stuff you are not alone. This is a fine group of people who will help lead you in the correct direction.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Thank you sooo much!!! Swift reply in the middle of the night, ha ha - no professional can match that! Even if it is not 100% right for each situation - it is 200% right for calming me down! There is help in the world! Thank you!lazynovice wrote: ↑Sun Apr 11, 2021 11:27 pm Let’s see-
On the outside help, it is more to make sure you are not missing anything particular to your state. I would do some homework and at least consult with someone to explain your plans and have them give you their thoughts.
I would not worry about the checks. Go to the same banker and I bet he’ll help.
You can call Fidelity to roll the account over. Might be able to do it online too. Depending upon what it is invested in, you might have to sell first before you rollover but since you are going to money market, you don’t care. All of that will be free and tax free.
Keep the Vanguard account if it makes you feel better. You can move it later if you want.
In terms of other assets that might have step up in basis- the house comes to mind and if any of the cars are collectibles.
Ahm, the house, why does it matter? I still have to read up on the step-up... maybe the answer is there. I think we have Joint Ownership with Survivor becoming the owner. I also still need to find the letter the courthouse sent to fill out their forms and bring them the will. That may also explain it.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Yes, thank you soooo much for the fast and compassionate and expert reply!!!Saving$ wrote: ↑Sun Apr 11, 2021 11:46 pm Bennie
So sorry for your loss, and the resulting pain, loneliness and heartache. First thing is to do what you need to in order to take care of yourself. You will not "get over it" but in time the pain may be less acute, simply because it is not so new.
In regards to the money, you have come to the right place.
For clarity
1. House: Do you own, and if so, Is the deed in both of your names?
2. House: If you own, is the mortgage in both of your names?
3. Based on your posts, please confirm that the only inherited monies are Husbands 401k's, which you want to use to fund living expenses from now until your retirement
a. Husbands 401k from employer at time of death
b. Husbands 401k from previous employer - you indicated this one is smaller - how long would these funds last you at your projected withdrawal rate?
4. Is there a life insurance policy? Are there any other accounts you are inheriting?
5. You indicated you and your husband each filed taxes as single people. Is that correct, or did you mean to say you filed as married filing separate? The reason this may matter is that there may be different regulations that pertain to a legal spouse inheriting an IRA vs a non-married partner inheriting an IRA. It would be helpful if you could clarify that.
For the time being, you are probably best off doing NOTHING with the 401k's until you get your gameplan together.
6. How long will the savings you are using to augment your income last? Also, see question 3 b above.
Whatever you do, DO NOT mix the 401k monies with your own IRA's. You will want to keep those segregated and separate.
Part of your gameplan should be to examine your own 401k assets and project social security to confirm those, combined, will be sufficient to support yourself at retirement. If so, you plan to use your husbands accounts from now until retirement would work. If not, a different plan may be in order.
Again, condolences. I know it's not much from a stranger on the internet, but at least with the mechanics of the financial stuff you are not alone. This is a fine group of people who will help lead you in the correct direction.
I have spent the first three months mostly on a grieving forum - that has been tremendously helpful. You seem to know - so I am sorry for you, too, if that is the case. This is all new to me and I am learning that some people have gone through this and know. Others are like I was, just have no idea about this kind of loss, thank God, for them.
About your questions - I had to chuckle a little - since I can see how this information would be needed for the most tailored advice and sharing of knowledge. I am, however, a very private person and surprised myself with posting on the grieving forum and here at all. I got a lot out of the replies so far and am reading through some of the Wiki pages and learning a lot. I think that is all I feel comfortable doing right now - that may change, so thank you for your guiding questions - good for me to think about, if nothing else. Lots of insights there.
My father always said "you're not asking the right question" when I was confused about something - he would repeat that to me again and again rather than telling me the answer - by the time I asked the right question, I had the answer myself - sometimes knowing the questions is very very helpful. Thanks for that!
Re: [Spouse recently passed away. Please help me handle his financial matters]
From one widow to another, I know what you're going through. Posting here and in the grieving forum is a very good first step. Likewise, I am also a very private person.
What helps is that your financial situation is not unique. As long as you don't post real names, locations, or exact dollar amounts, you don't have to worry about privacy. We only want to know the state you live in because the law is different for each state. Dollar amounts can be given in very rough numbers - or may not be needed at all.
What worked for me is to have a plain old bound notebook. Every question I had, I wrote down. Every call I made, I wrote down. Date, name, phone number, what was discussed.
When I was ready, I went back to the notebook and worked on the items. Eventually, everything was done. It took a while, but it worked.
When you have financial questions, just ask them here. We'll give the answers (or ask for more info). Write that in your notebook and cross it off your list.
Re: [Spouse recently passed away. Please help me handle his financial matters]
My condolences. Take some time before making any huge financial decisions. There is one form the IRS requires to be filled out within 9 months, that is form 706. This allows you to transfer your spouse’s portion of their inheritance exemption to you. Even though the individual exempt amount is $11.5M now, that can be changed at anytime.
Re: [Spouse recently passed away. Please help me handle his financial matters]
If the only reason for filing Form 706 — Estate Tax return is to protect the spouse’s portion of the exemption, the deadline to file the 706 is 2 years from the date of death. Under Section 4.01(1) of Rev. Proc. 2017-34, any executor will automatically have until the second anniversary of the decedent’s date of death to file an estate tax return for the purposes of claiming portability. Given the general information given about the assets of the OP and her deceased husband, it is likely that no estate tax return is required for her husband’s estate, except to elect portability.basspond wrote: ↑Mon Apr 12, 2021 7:57 am My condolences. Take some time before making any huge financial decisions. There is one form the IRS requires to be filled out within 9 months, that is form 706. This allows you to transfer your spouse’s portion of their inheritance exemption to you. Even though the individual exempt amount is $11.5M now, that can be changed at anytime.
-
- Posts: 3341
- Joined: Mon Apr 16, 2012 10:48 pm
- Location: Denver area. Former Texan.
Re: [Spouse recently passed away. Please help me handle his financial matters]
For the house, it will matter when and if you sell it and there is a gain over the capital gains exclusion amount. That might not happen, but if it does, it will prevent potential taxes.Bennie wrote: ↑Sun Apr 11, 2021 11:53 pmThank you sooo much!!! Swift reply in the middle of the night, ha ha - no professional can match that! Even if it is not 100% right for each situation - it is 200% right for calming me down! There is help in the world! Thank you!lazynovice wrote: ↑Sun Apr 11, 2021 11:27 pm Let’s see-
On the outside help, it is more to make sure you are not missing anything particular to your state. I would do some homework and at least consult with someone to explain your plans and have them give you their thoughts.
I would not worry about the checks. Go to the same banker and I bet he’ll help.
You can call Fidelity to roll the account over. Might be able to do it online too. Depending upon what it is invested in, you might have to sell first before you rollover but since you are going to money market, you don’t care. All of that will be free and tax free.
Keep the Vanguard account if it makes you feel better. You can move it later if you want.
In terms of other assets that might have step up in basis- the house comes to mind and if any of the cars are collectibles.
Ahm, the house, why does it matter? I still have to read up on the step-up... maybe the answer is there. I think we have Joint Ownership with Survivor becoming the owner. I also still need to find the letter the courthouse sent to fill out their forms and bring them the will. That may also explain it.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Just wanted to point out a way back in this thread about reporting your husband as deceased on your tax return. If he died in January of 2021, then he was not dead in 2020 which are the taxes you're filing soon. I don't believe you want to mark him as deceased on that return (but please verify).
I think you want to mark him as deceased on your 2021 taxes which you would be filing about a year from now. You want the ability to file Married Filing Jointly for 2021 to keep your tax rate low.
One of the reasons to do Roth conversions when the current and future tax rates seem to be the same is death of spouse. This is because one person typically spends about the same as two living together (so required income stays about the same as single vs married), but the tax rate thresholds get cut in half. So the benefit to Roth money may only be after a spouse passes with the conversions done when married. Since that just happened to you, 2020 and 2021 are your tax advantaged years and offer the most headroom for converting money to Roth up to the top of your existing tax bracket.
If you are in the 12% tax bracket for 2020 and 2021 as married filing jointly, you will most likely be in the 22% tax bracket in 2022 when you file as single.
I think you want to mark him as deceased on your 2021 taxes which you would be filing about a year from now. You want the ability to file Married Filing Jointly for 2021 to keep your tax rate low.
One of the reasons to do Roth conversions when the current and future tax rates seem to be the same is death of spouse. This is because one person typically spends about the same as two living together (so required income stays about the same as single vs married), but the tax rate thresholds get cut in half. So the benefit to Roth money may only be after a spouse passes with the conversions done when married. Since that just happened to you, 2020 and 2021 are your tax advantaged years and offer the most headroom for converting money to Roth up to the top of your existing tax bracket.
If you are in the 12% tax bracket for 2020 and 2021 as married filing jointly, you will most likely be in the 22% tax bracket in 2022 when you file as single.
Mark |
Somewhere in WA State
-
- Posts: 30
- Joined: Sun Jan 24, 2021 2:10 pm
Re: Stimulus check for spouse who recently died
So sorry to hear of your husband's passing. We will be praying for you. One thing that I would recommend and others could have as well. I would advise you to not make any major changes in your lifestyle for at least six months to a year. From this site you can learn so much about finance, So over the next six months just absorb all you can. I would say don't sell your home or move to another area for at least a year. You have been so much during the past several months. Grieve for your husband and try as you may to adjust to living without him. Thankfully he has left you financial secure, many widows are left without much but a few dollars to stretch for a few months. Don't loan money to anyone. Not even relatives nor friends. Believe me when I say some will come knocking on your door. So slowly there is no big rush. Complete your taxes and payments and roll with the flow until you are confident that you are in control of your finances.Bennie wrote: ↑Sat Apr 10, 2021 8:01 pm Wow - Thank you so much!
And thank you for saying you're sorry - yes, it is hard. We have been together for 29 years and were going to grow old togther.
I hope to get some help on the forum about other things.
It has taken me a while to get started even thinking about finances, but I have to.
Good thing is that I have done our budget, taxes, mortgage, refinance, etc. all these years. He was never interested,
Bad thing is that I know nill about surviving a spouse and we never wanted to talk about it.
May God richly bless you.
Re: [Spouse recently passed away. Please help me handle his financial matters]
I should also mention that you won't need to sign your deceased husband's name on the tax form.suemarkp wrote: ↑Mon Apr 12, 2021 2:17 pm Just wanted to point out a way back in this thread about reporting your husband as deceased on your tax return. If he died in January of 2021, then he was not dead in 2020 which are the taxes you're filing soon. I don't believe you want to mark him as deceased on that return (but please verify).
I think you want to mark him as deceased on your 2021 taxes which you would be filing about a year from now. You want the ability to file Married Filing Jointly for 2021 to keep your tax rate low.
The IRS has special rules about signing tax forms for this. All you need to do is check a box in the tax software.
When you get to this point, we'll help you walk through it.
- ObliviousInvestor
- Posts: 4212
- Joined: Tue Mar 17, 2009 9:32 am
- Contact:
Re: [Spouse recently passed away. Please help me handle his financial matters]
I am sorry for your loss.
There's some years yet before this becomes applicable, but I would encourage you at some point between now and age 60 to look into restricted applications for Social Security benefits in survivor situations. Specifically, if the rules don't change between now and then, you'll have the option at age 60 to file for your benefit as his survivor, while allowing your own retirement benefit to grow until age 70 -- or to file for your retirement benefit at 62 and allow your benefit as his survivor to grow until your full retirement age.
There's some years yet before this becomes applicable, but I would encourage you at some point between now and age 60 to look into restricted applications for Social Security benefits in survivor situations. Specifically, if the rules don't change between now and then, you'll have the option at age 60 to file for your benefit as his survivor, while allowing your own retirement benefit to grow until age 70 -- or to file for your retirement benefit at 62 and allow your benefit as his survivor to grow until your full retirement age.
Mike Piper |
Roth is a name, not an acronym. If you type ROTH, you're just yelling about retirement accounts.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Be sure to notify Social Security soon regarding your husband's death. You get a whopping $200 or so for a death benefit. But they will mark him as deceased in their database. If you plan to keep working, collecting benefits at age 60 under his record may not be of much benefit as it could be reduced if you have earned income (but it depends on how much you earn). But once you decide to stop working, it may be best to collect under his record and let yours grow, especially if you have the larger benefit as it will be even larger if you wait until 70 to begin SS under your record. If his is the larger, then probably best to collect at 67.
Perhaps visit here at some point in a year or two to make a plan (and check the special circumstances box): https://opensocialsecurity.com/
Perhaps visit here at some point in a year or two to make a plan (and check the special circumstances box): https://opensocialsecurity.com/
Mark |
Somewhere in WA State
Re: [Spouse recently passed away. Please help me handle his financial matters]
^^^ The funeral home notifies Social Security of the death. The intent is to prevent fraud. Both Vanguard and my local bank already knew of my late husbands death when I notified them. A notification was done when I cremated my late husband's ashes last year. That's how they knew.
Bennie needs to visit Social Security in person to claim the $255 death benefit. She'll need to make an appointment. Expect a month or so delay until a time slot opens up.
Bennie needs to visit Social Security in person to claim the $255 death benefit. She'll need to make an appointment. Expect a month or so delay until a time slot opens up.
-
- Posts: 745
- Joined: Wed Jun 26, 2019 8:26 pm
Re: [Spouse recently passed away. Please help me handle his financial matters]
notPatience wrote: ↑Sun Apr 11, 2021 2:05 pm Bennie, I am so very sorry for your loss.
As I read through the responses, I couldn't imagine how you weren't overwhelmed by terminology and the plethora of topics. I took a shot below at sorting some priorities/timing. NOT as a firm or all-inclusive guide, but as a possible framework for you to create your own (and BH experts to add to/refine.)
Some of these are big, have sub-actions ... but no sense listing the subactions until you learn about the overarching elements. (IOW, you're going to have lots more to-dos.) Some of the specifics mentioned in this thread might not apply to you, but you can't know that until you learn about the topic. (Roth IRAs/conversions, for example.)
The main point is that everything does not need to be done at once. Sort and prioritize. Learn before acting, yet with a sharp eye on deadlines for acting. Spread out what you can so you don't go nuts and don't take actions that must be undone .. or can't be undone.
DRAFT
By end of April
Wrap up 2020 taxes
Get death certificates if you don’t already have
Find out how things were left to you and gather paperwork:
House title
Retirement accounts (via will or name beneficiary)
Banking accounts (leave at least one joint acct for depositing checks) / CDs
Life Insurance
Any brokerage account?/Taxable investments?
Other accounts/possessions
Explore Boglehead wiki (note the Acronym/Abbreviation resource in the left sidebar)
Sort through topics in this thread and assign them a when-to-learn-about month
Learn to recognize and ignore the section in many BH threads that is a disputing-money-related-topics/theories-as-sport tangent. The participants have a fine time. Rarely is responsive to OP. (Bet you can already spot that tangent in this thread.)
List future to-dos arising out of these activities and add them to calendar
May
Learn (Boglehead wiki great for many) about rules governing/maximizing:
Specifics of DH’s retirement accounts/company benefits
Roth IRAs
Traditional IRAs
Inherited Trad IRAs
Roth vs. Trad IRAs – when to use which
Roth conversions / Rules
How change in tax status from MFJ to single will affect taxes
What you can do before end of 2021 as MFJ but not after. List all. Revisit in Aug.
Finalize in late Oct if you are going to act on these.
List future to-dos arising out of these activities and add them to calendar
June
Rough estimate of 2021 tax outlook – possibly adjust withholding
Learn about impact of inflation over time on next egg
Learn about asset allocation
Run scenarios through i-ORP
Change default values to what your monies are actually earning.
Assess tax consequences/disposable income consequences of your plan vs. various
suggested changes
List future to-dos arising out of these activities and add them to calendar
July
Write IPS (Investment Policy Statement) – this is for you. To set out what you’re trying to
achieve and your plan to get there.
Stress-test your IPS vs. i-ORP other calculators that make sense to you and whose level of
complexity match your desires.
Write out list of steps to implement your plan and when to do the steps.
List future to-dos arising out of these activities and add them to calendar
Aug.
Begin implementing your plan
Revisit possible actions to take because 2021 is an MFJ tax filing year before switching to single
List future to-dos arising out of these activities and add them to calendar
Sept
Check in with your plan to implement – need any changes?
Assess 2021 tax picture – possibly adjust withholding again
List future to-dos arising out of these activities and add them to calendar
Oct
Finalize in late Oct if you are going to act on any remaining MFJ>Single instigated actions.
List future to-dos arising out of these activities and add them to calendar
Nov
Prepare anything that must be done before the end of the calendar year
Recheck that you’ve completed all calendar items to day
Jan. 2022
Change withholding to Single
Blue/bold above added. Thank you notPatience...I was bordering on getting annoyed, given the seriousness of the OPs concerns.ETA: at least the OP has a more open mind than I do ...
To this list, I might add:
1. nothing is critical or catastrophic if you wait a bit. Yes, file the taxes or at least an extension (though it sounds like you are the type of person who might want to get a few things checked off a list...). Money can sit, it’s not like it’s going to disappear in a nanosecond.
2. Depending on how you feel, this might be a time when good self-care includes delegating a few tasks you might normally do (financially- taxes, accounting...investment firms like Schwab, Fidelity etc have an estates department. Ask to be transferred to them, as they will be better informed about how to handle things).
3. A comment on Roth IRAs: one benefit of the Roth is that you can let those investments ride longer for the most growth possible. If you draw from other types of accounts, the Roth continues to grow more - for example, until 85 - and then any amount can come out tax free. I hope that makes sense.
4. I do not have nisiprius’ experience by any means. That said, I 100% agree with the assertion that conservative “investments” like CDs, Treasure bonds, savings bonds count as investments. It just so happens that rates are suuuuper low these days, yet that will change (oh, how I’d love to get my hands on one of those old CD rates...but at the time, they still were conservative for the time - it’s all relative to the rate of inflation and how the fed sets interest rates...and that’s about the extent of my knowledge ). Stuffing money in a mattress doesn’t sound like your cup of tea, in any case...
My condolences go out to you. It’s OK to just lay in bed some days!!
Please spell out new acronyms. Thank you.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Wow again - thank you all so much for checking into my post, taking time to reply, and your kindness!
There are so many things I want to respond to but I am super-tired today. Yes, the funeral home notified social security - do they talk to the IRS or do I need to somehow? The value of the home is not likely to be great but I will look into the re-set for sure.
Most urgent and interesting two question I have for you, suemarkp - after your quote below....
Also, from what you and others write, I my still be able to contribute to Roth for 2020??? Or did that have to happen before Dec. 31. 2020? If I can still contribute then I may need to do that this month and so get on it right away. I currently don't have a Roth-IRA and would need to open one.
By the way, I may be considered a dinosaur by you'all: I do not use software to do taxes. Always just printed out the forms and mailed in on paper. and yes, I do most numbers in my head or on paper, too, but did double check with a calculator for taxes, just to make sure, ha ha - I will brace myself for some scolding from this forum - yeah, I may have missed some tax advantage the software versions may point out, but that is how private I am: I did not want to use software or file online to keep the information simple, on paper, and protected - or so I thought at least.
There are so many things I want to respond to but I am super-tired today. Yes, the funeral home notified social security - do they talk to the IRS or do I need to somehow? The value of the home is not likely to be great but I will look into the re-set for sure.
Most urgent and interesting two question I have for you, suemarkp - after your quote below....
Wow - the taxes will go up that much!? Hm, I am not sure I understand. I did not see that when we switched from just being together to being married. I filed for us before and after and don't remember a big break after we got married.suemarkp wrote: ↑Mon Apr 12, 2021 2:17 pm Just wanted to point out a way back in this thread about reporting your husband as deceased on your tax return. If he died in January of 2021, then he was not dead in 2020 which are the taxes you're filing soon. I don't believe you want to mark him as deceased on that return (but please verify).
I think you want to mark him as deceased on your 2021 taxes which you would be filing about a year from now. You want the ability to file Married Filing Jointly for 2021 to keep your tax rate low.
One of the reasons to do Roth conversions when the current and future tax rates seem to be the same is death of spouse. This is because one person typically spends about the same as two living together (so required income stays about the same as single vs married), but the tax rate thresholds get cut in half. So the benefit to Roth money may only be after a spouse passes with the conversions done when married. Since that just happened to you, 2020 and 2021 are your tax advantaged years and offer the most headroom for converting money to Roth up to the top of your existing tax bracket.
If you are in the 12% tax bracket for 2020 and 2021 as married filing jointly, you will most likely be in the 22% tax bracket in 2022 when you file as single.
Also, from what you and others write, I my still be able to contribute to Roth for 2020??? Or did that have to happen before Dec. 31. 2020? If I can still contribute then I may need to do that this month and so get on it right away. I currently don't have a Roth-IRA and would need to open one.
By the way, I may be considered a dinosaur by you'all: I do not use software to do taxes. Always just printed out the forms and mailed in on paper. and yes, I do most numbers in my head or on paper, too, but did double check with a calculator for taxes, just to make sure, ha ha - I will brace myself for some scolding from this forum - yeah, I may have missed some tax advantage the software versions may point out, but that is how private I am: I did not want to use software or file online to keep the information simple, on paper, and protected - or so I thought at least.
Re: [Spouse recently passed away. Please help me handle his financial matters]
My response was assuming equal incomes. If you each make $50K, taxes could be say $5k each if not married, $5k each married filing separately, or $10k if married filing jointly. But my point was, if you and husband were spending $100k per year, you are probably going to spend about the same with him gone. Food will go down slightly, but utilities, taxes, mortgages, etc still cost the same. Travel could be somewhat cheaper but it depends. And you could downsize housing. But dont rush into changes yet.
If $100k of income was costing you $10k in taxes being married, it will cost you closer to $20k being single.
When you do your taxes you could do them twice, once as married filing joint and once as single. Then you will know for you what it really is going to turn into. Only a few thing change between these two filing statuses.
If $100k of income was costing you $10k in taxes being married, it will cost you closer to $20k being single.
When you do your taxes you could do them twice, once as married filing joint and once as single. Then you will know for you what it really is going to turn into. Only a few thing change between these two filing statuses.
Mark |
Somewhere in WA State
Re: [Spouse recently passed away. Please help me handle his financial matters]
I use the pdf forms from the IRS web site, but I still print and mail in my taxes. Actually taking the time to follow the 1040 instructions, etc and not just rely on tax software can (in my opinion) help in understanding why you are paying what. Although I'm sure tax software provides its own benefits.
A while back, you were asking about a Fidelity MM with $1.25 million in FDIC insurance. I'm assuming what you must be referring to is the Fidelity Cash Management Account. If this is correct and you haven't read the FAQ on this, it may help in understanding how Fidelity is able to FDiC insure funds in this account for more than $250,000 per individual. Fidelity appears to be assigning portions of your account to a selected set of banks (that offer FDIC insurance), possibly up to 5 banks (5 x $250,000 = $1.25 million). However, you need to monitor on the Fidelity web site which banks Fidelity put your money in. And if you also have money in those banks outside of this Cash Management Account, you need to make sure that the total in each bank stays below the FDIC limit for each bank based on the type of accounts you have there. The FDIC web site link I provided earlier will help with determining if your money is fully insured at each bank. https://edie.fdic.gov/
Here is the link to the Fidelity Cash Management FAQ
https://www.fidelity.com/cash-managemen ... nt-account
If you have questions on this FAQ, there may be others posting who have this same type of Fidelity account and can answer more of your questions on it. Again best of luck!
A while back, you were asking about a Fidelity MM with $1.25 million in FDIC insurance. I'm assuming what you must be referring to is the Fidelity Cash Management Account. If this is correct and you haven't read the FAQ on this, it may help in understanding how Fidelity is able to FDiC insure funds in this account for more than $250,000 per individual. Fidelity appears to be assigning portions of your account to a selected set of banks (that offer FDIC insurance), possibly up to 5 banks (5 x $250,000 = $1.25 million). However, you need to monitor on the Fidelity web site which banks Fidelity put your money in. And if you also have money in those banks outside of this Cash Management Account, you need to make sure that the total in each bank stays below the FDIC limit for each bank based on the type of accounts you have there. The FDIC web site link I provided earlier will help with determining if your money is fully insured at each bank. https://edie.fdic.gov/
Here is the link to the Fidelity Cash Management FAQ
https://www.fidelity.com/cash-managemen ... nt-account
If you have questions on this FAQ, there may be others posting who have this same type of Fidelity account and can answer more of your questions on it. Again best of luck!
Re: [Spouse recently passed away. Please help me handle his financial matters]
Regarding your question about the Roth and Traditional IRA 2020 contribution deadlines. The IRS has extended these to May 17, 2021. However, please read the following directly from the IRS to be sure this is the information you need.
https://www.irs.gov/newsroom/irs-extend ... -to-may-17
https://www.irs.gov/newsroom/irs-extend ... -to-may-17
Re: [Spouse recently passed away. Please help me handle his financial matters]
Get some rest. When you're ready, here's the official guidance: Survivors Benefits
Call them and make an appointment to visit your local Social Security office. You want to claim the $255 Special Lump-Sum Death Payment, which has to be done in-person.
Before the appointment, have an idea of what you want to do with regards to claiming your survivors benefit. They'll ask you about this during the visit. No worries, everyone is very helpful and friendly.
Use the suggestions provided earlier in the thread, especially the post by ObliviousInvestor here and the next post by suemarkp. ObliviousInvestor is the developer of the https://opensocialsecurity.com/ tool and is an expert on Social Security.
(Ask your questions in this thread.)
Re: [Spouse recently passed away. Please help me handle his financial matters]
Thank you so much! Very helpful. Do you know if Fidelity ever holds your monies in Credit Unions or can they only use banks? If no Credit Unions are used by Fidelity for your savings, then those would be a good option to hold other savings, right?water2357 wrote: ↑Tue Apr 13, 2021 6:49 am ... you need to monitor on the Fidelity web site which banks Fidelity put your money in. And if you also have money in those banks outside of this Cash Management Account, you need to make sure that the total in each bank stays below the FDIC limit for each bank based on the type of accounts you have there. The FDIC web site link I provided earlier will help with determining if your money is fully insured at each bank. https://edie.fdic.gov/
Here is the link to the Fidelity Cash Management FAQ
https://www.fidelity.com/cash-managemen ... nt-account
If you have questions on this FAQ, there may be others posting who have this same type of Fidelity account and can answer more of your questions on it. Again best of luck!
In the link you sent, they list 20-some banks - some say "unavailable" - none of them is a Credit Union, from what I can see.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Thanks for that! Yes, having done the finances for years for both of us, it has crossed my mind what I need to do, should somthing happen to him, and how I don't need to replace all his contributions to our common account, but really only the groceries would go down! You are right, mortgage, power, phone, internet, etc. all stay, as do home repairs and feeding the animals monthly. He used to carry half of all that. So I see what you mean with the taxes possibly going up, if I exceed my tax bracket if I need to take out retirement monies from the inherited IRA to cover his part and then have to file single with that amount. Please correct me if I still got that wrong.suemarkp wrote: ↑Mon Apr 12, 2021 9:15 pm My response was assuming equal incomes. If you each make $50K, taxes could be say $5k each if not married, $5k each married filing separately, or $10k if married filing jointly. But my point was, if you and husband were spending $100k per year, you are probably going to spend about the same with him gone. Food will go down slightly, but utilities, taxes, mortgages, etc still cost the same. Travel could be somewhat cheaper but it depends. And you could downsize housing. But dont rush into changes yet.
If $100k of income was costing you $10k in taxes being married, it will cost you closer to $20k being single.
When you do your taxes you could do them twice, once as married filing joint and once as single. Then you will know for you what it really is going to turn into. Only a few thing change between these two filing statuses.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Wow! Thanks! I need to get right on that to see how much I can contribute, how much would it would help with 2020 taxes, and how to do it phycially. I guess I have one month to get it all done. (I don't like to file for extentions and think I can handle it)water2357 wrote: ↑Tue Apr 13, 2021 6:57 am Regarding your question about the Roth and Traditional IRA 2020 contribution deadlines. The IRS has extended these to May 17, 2021. However, please read the following directly from the IRS to be sure this is the information you need.
https://www.irs.gov/newsroom/irs-extend ... -to-may-17
If you have more tips on that, much appreciated. Where/with whom and how do you open a Roth IRA? Any best places / favorite ways to do that and why??
Re: [Spouse recently passed away. Please help me handle his financial matters]
Thank you for that! I had no idea about this payment. I will make an appointment.LadyGeek wrote: ↑Mon Apr 12, 2021 5:54 pm ^^^ The funeral home notifies Social Security of the death. The intent is to prevent fraud. Both Vanguard and my local bank already knew of my late husbands death when I notified them. A notification was done when I cremated my late husband's ashes last year. That's how they knew.
Bennie needs to visit Social Security in person to claim the $255 death benefit. She'll need to make an appointment. Expect a month or so delay until a time slot opens up.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Wow, again! Thank you so much for all the help. This is really helpful. I had no idea about this option but it may make a siginficant difference for many years for me, if I get to be that old. If I get to be that old, I will be very happy I learned about this option from you since it would increase monthly income for life, possibly. That is significant!ObliviousInvestor wrote: ↑Mon Apr 12, 2021 4:26 pm I am sorry for your loss.
There's some years yet before this becomes applicable, but I would encourage you at some point between now and age 60 to look into restricted applications for Social Security benefits in survivor situations. Specifically, if the rules don't change between now and then, you'll have the option at age 60 to file for your benefit as his survivor, while allowing your own retirement benefit to grow until age 70 -- or to file for your retirement benefit at 62 and allow your benefit as his survivor to grow until your full retirement age.
Re: [Spouse recently passed away. Please help me handle his financial matters]
Thank you so much for all the links! I may not get to the details in all of them until this weekend but I am eager to learn what you shared.LadyGeek wrote: ↑Tue Apr 13, 2021 7:11 amGet some rest. When you're ready, here's the official guidance: Survivors Benefits
Call them and make an appointment to visit your local Social Security office. You want to claim the $255 Special Lump-Sum Death Payment, which has to be done in-person.
Before the appointment, have an idea of what you want to do with regards to claiming your survivors benefit. They'll ask you about this during the visit. No worries, everyone is very helpful and friendly.
Use the suggestions provided earlier in the thread, especially the post by ObliviousInvestor here and the next post by suemarkp. ObliviousInvestor is the developer of the https://opensocialsecurity.com/ tool and is an expert on Social Security.
(Ask your questions in this thread.)
Also thanks for the "No worries, everyone is very helpful and friendly." - how did you know how I feel, ha ha...
Re: [Spouse recently passed away. Please help me handle his financial matters]
Based on the Fidelity Cash Management FAQ, it appears that Fidelity is only using FDIC insured banks. It also appears that Fidelity provides a list of the banks where they have invested your money, possibly that list is shown online if you have signed up to view your Fidelity accounts online. Otherwise, you would need to look at your account statements from Fidelity or call them and ask what banks your money is in. You need to know this and to keep track of it, so you can be certain all your money, including what is not with Fidelity is fully FDIC insured in a particular bank.
Credit Unions are insured through NCUA. So, if Fidelity (based on your account statement from Fidelity) does not show any of your money in any Credit Union (you can ask Fidelity the general question if they ever use Credit Unions), then you using Credit Unions would not impact your FDIC insurance through Fidelity. But you could use other banks with FDIC insurance, as long as you monitor where Fidelity is putting your money, what specific banks.
Here is a link to credit union insurance information:
https://www.mycreditunion.gov/share-insurance
Credit Unions are insured through NCUA. So, if Fidelity (based on your account statement from Fidelity) does not show any of your money in any Credit Union (you can ask Fidelity the general question if they ever use Credit Unions), then you using Credit Unions would not impact your FDIC insurance through Fidelity. But you could use other banks with FDIC insurance, as long as you monitor where Fidelity is putting your money, what specific banks.
Here is a link to credit union insurance information:
https://www.mycreditunion.gov/share-insurance