Sorry for the unpleasant question, but... If you died today, what would happen to your investments?
In a past member survey, the answers to one question in particular really stood out. We asked, “If your household’s primary investment decision-maker died today, how well equipped would the survivor be to make such decisions?”
Just 7% said, “Very well-equipped.” Another 29% said, “Somewhat well-equipped.” But the majority said “Not very well-equipped” or “Not at all well-equipped.”
How would you answer that question? And if you’re like most who responded to our survey, what will you do about that?
While it’s often the case that one spouse takes the lead in managing the investments, both spouses should be knowledgeable and in agreement about what’s being done in this area. Both should have some familiarity with how much you have in your portfolio, how the money is invested, and why.
To get a sense for how well-equipped you and your spouse are to handle your household’s investments on your own, how well could both of you answer the following questions?
Why are we investing? This is all about your goals. Retirement? College for the kids? What other goals are you pursuing and what's the time frame for each goal?
How have we determined how much we’ll need for these goals? Did you run an analysis using MoneyGuide or another online calculator? If you’re saving for college, have you used the College Cost Calculator on the Saving for College website?
What’s our ideal asset allocation? Have you gone through the SMI Getting Started material to figure this out?
How much are we investing? Is this based on a percentage of income or a fixed dollar amount? Is it as much as your calculations say you should be investing?
How often are we investing? Are you, in fact, adding to your investment accounts? If so, do you invest through payroll withholding?
What’s our process for choosing investments? Are you following one or more of the SMI strategies?
What are we investing in? What specific investments do you have?
What investment accounts do we own and how do we access them? Do you both know how many accounts you have and what their passwords are?
How much money do we have in our investment accounts? What's the total across all accounts?
That should give you plenty to talk about! What other steps have you taken to make sure each of you is equipped to manage your investments in the event of the other spouse’s death? What further steps do you need to take?
