Q. Hi, Dan. A group of friends of mine were sharing our worst financial mistakes. We are all retired after pretty nice careers and doing fine financially but everyone has made a big mistake. Weirdly, the pain came from a similar action – investing in things that sounded like sure winners but getting burned. Is that the most common error you see retirees make or is it just us? — Ken in Cocoa Beach
A. Hi, Ken. That is a very common mistake. How could it not be? No one is going to invest in something that strikes them as sketchy. People buy into things that end up painful because they don’t see it as risky. I find it helps to remember you cannot buy anything unless someone with an opposing view is selling it.
The most painful mistake I see retirees make has little to do with investments. The worst thing is having only one person involved in a family’s finances. This is the default arrangement with singles, but it is common in marriages.
In most marriages, one spouse handles most financial issues for the couple. That works great for most people most of the time – until it doesn’t. I lost count a long time ago of how many times I have met with a widow or the spouse of someone who is growing frail or exhibiting cognitive decline who, despite having a more than adequate amount of money, is confused, frustrated, or even terrified about their financial situation.
Having one spouse handle finances can take a great burden off the other spouse. Such delegation can be valuable and freeing. However, the non-financial spouse should still be tuned into high level issues at the very least. This means having a grip on the basics of what the couple’s goals, needs, resources, and obstacles are.
The person handling the money will do a great service to their family by involving a smart, responsible, trustworthy friend or family member or even better, forming relationships between the couple and qualified, trusted, and accountable financial, tax and legal advisors that will serve them exclusively in a fiduciary capacity.
Building these relationships is difficult for some, especially for some men. After years of being the money person, involving others can feel like a weakness, even a loss of relevance. They may think, “If I’m not handling this, what value do I bring to my family.” Gentlemen, if this is you, please work on it. There is much more at stake than your egos.
By not preparing for the management of finances when personal conditions are not good, there is a risk that all the years of work can get wiped out by bad decisions or fraud and you could tarnish your legacy. I lost both my parents in recent years, and I can attest few things bring out the scam artists more than the issuance of a death certificate. Dad was always the money guy. As his faculties declined, he was always getting hit up for terrible investment “opportunities.” After he died, my mom was downright under siege. My parents had my sisters and me to help her. Many others have no one.
If you are in charge of the family money, don’t leave your finances vulnerable should your physical or mental health decline and don’t leave your heirs the stress that comes with not having a plan and good relationships in place. There comes a time when doing this alone becomes a very risky choice for your family. Do you want to be remembered for how well you did for your family over your lifetime, or how you put them in a stressful position precisely when they were most vulnerable?
Dan Moisand, CFP®, was the 2023 chairman of CFP Board, the organization that grants and administers the CERTIFIED FINANCIAL PLANNER™ designation for the more than 100,000 CFP® professionals in the U.S., a past national president of the Financial Planning Association, and has been featured as one of America’s top financial planners by at least 10 financial planning publications. He can be reached at www.moisandfitzgerald.com or 321-253-5400 ext 101
Originally published on FloridaToday. Read the original article here.