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Learning about retirement from mom

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Tess Vigeland: Take a moment and think about all the things you have learned from your parents. There are the small things, like cooking tips. And some big things, too, like how you go about navigating life.

Linda Stern is a senior personal finance correspondent for Reuters. She recently wrote a piece called “Lessons from my mother’s money.” It’s about all the financial wisdom she picked up from taking care of her mom. Linda Stern, thank you for joining us.

Linda Stern: Thank you very much.

Vigeland: This is a remarkable story that you’ve told here in the wake of your mother passing away. And I guess what I’d like first is for you to give our listeners a bit of a sense of your mother. You said she’d spent 30 years as a widow. What was she like, what did she do?

Stern: Well, it’s interesting that you use the word “remarkable,” because I wrote about her because I thought she wasn’t remarkable. In some ways, I thought she had a very normal retirement. She did spend 30 years as a widow, and did a lot on a fairly small amount of money. She was a golfer, she was a Floridian for a while. She moved back to D.C. from originating from New Jersey. Child of the Depression. And always a fairly smart and funny person, albeit not a highly educated person.

Vigeland: I guess what was remarkable to me was some of the lessons that you took away from watching her go through retirement. And I think some of these are a bit counterintuitive and not necessarily what we hear all the time about how you should manage your money during that time. So let’s just go through some of these elements that you talk about in the article. And the first one is that “Retirement spending is a roller coaster, not a flat line.” I think when people think about retirement, they think, “OK, I’m going to spend this amount every month and I’m gonna have this,” et cetera, et cetera. And that’s not the way it goes.

Stern: That’s exactly true. I think a lot of the planning scenarios that you see, they talk about, you know, getting the same amount month after month, year after year. But the typical retirees they only really start spending money at the end of life and older years if they have big medical health care expenses.

Vigeland: And how did they play out for your mom?

Stern: My mother was somewhat typical. I think in her early sixties, she had a home in New Jersey, she had a home in Florida. By the time she was in her mid-seventies, she had sold her place in New Jersey and she was having a happy little life in Florida and not spending very much money at all every month.

Vigeland: And you know when I mentioned the idea of counterintuitive, this next one, I think, is what really stood out for me. And what you realized with your mother is that it’s actually good to keep some money in stocks, no matter how old you are. And I think particularly right now, in such a crazy market, there are a lot of people approaching retirement who just want to get out.

Stern: When you retire in your sixties, you’re looking at 20 or 30 years when you need money and you need it to grow. And over the very long term, you need to keep some money invested in stocks. And my mother always did have that. I mean, she was somewhat interested in the market, she listened to her advisers. She died a few months shy of 91 and still had money in the market.

Vigeland: And you know, this is something that we’ve tried to address many times on the show before, which is that having organized paperwork, ready for your heirs, no matter what age you are is probably one of the best gifts that you can give them. And that’s something your mother gave to you.

Stern: You know, that is really true. And I have to admit that it’s really boring advice. But still, my mother did all of these things and it made my life so much easier, because I had her power of attorney, we had a joint checking account. When the time came that I had to make both medical and financial decisions for her, I not only had the right paperwork to do that, but I knew for a fact that she wanted me to do that and I had some guidance in terms of what direction she wanted me to go. So, I didn’t have to spend time when she was sick near the end of her life running around getting a lawyer to open a bank account for me. I had it all there, and it did make my life very easy in that aspect.

Vigeland: So as we’ve mentioned, you’re a personal finance writer, so presumably you knew all this and you knew what was coming and you knew how to manage things. But reality is certainly different from what we learned outside of it.

Stern: Yeah and reality is different in so many ways. The way that people muddle through their retirement is different than the plans show. And the reality of actually handling your own mother’s money when you’re a personal finance expert or writer is daunting, because mom’s voice is always in your head. So, you wanna make sure you’re doing it the right way and not just the right way by the book, but the right way that she would want you to be doing it.

Vigeland: Linda Stern is a personal finance writer for Reuters, and we’ve been talking to her about her recent article “Lessons from my mother’s money.” Linda, thank you so much.

Stern: Thank you Tess, it was great.

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