Protect your family from the unexpected

Learn from one family’s experience on how to cope when life doesn’t go according to plan

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Craig Schroeder had a great career at a farm equipment manufacturer, along with a wife and two sons he adored, and a life that was everything he’d hoped for. Then something happened that changed everything—Craig was diagnosed with a deadly brain tumor.

“It was a total shock,” Sue says. “Craig was never sick. Once in our whole 34 years of marriage he had the flu, and that was it.”

Craig had also been the family’s sole financial decision maker. But in the two years before he passed, he would teach his wife and sons how to assume that role. Today Sue, 63, says she’d be lost if they hadn’t had that time to learn and plan together.

Preparation pays.

Craig knew he had very little time to prepare his family for what was ahead. While he had put the financial resources in place, he knew he needed to introduce Sue to the world of budgeting and investing.

Over the next two years, Craig and Sue met several times with their Fidelity representative, Alicia, to go over their accounts. When Craig died, Sue turned to Alicia for help. “I needed someone who could think clearly at a time when I couldn’t,” she recalls.

Their 401(k) plan provided a potential means of support.

Fortunately, Craig and Sue had saved throughout their married lives. Both their parents had lived through the Depression and had taught their children the importance of saving. Sue’s father, an early investor in the 401(k) plan offered by his employer, had talked Craig into investing in his employer’s workplace savings plan. Craig also took advantage of his employer’s matching program in order to increase his contributions. He was adamant about putting in the maximum amount allowed.

Sue realized she could no longer rely on Craig’s paycheck, and would soon have to start withdrawing from his 401(k) account. She needed to determine how much money it would take to live comfortably, and what she could afford.

Budgeting became a family activity.

Craig had always been the one who paid the bills. So, Sue took a crash course on online bill paying and on budgeting.

“Fortunately, I don’t spend a lot, but I still had to learn how to take care of it all,” recalls Sue. “I’m grateful that Craig and I had that year to work on this together. He sat down with me and made me balance that checking account every month.”

“It was crucial,” says 34-year-old Ben, the elder of their two sons. “Jason, Mom, and I would look at how much the family had as a whole, and we’d discuss how to handle different situations as they came up. It was important for everybody to understand what the family’s financial position was—and for us to all be on the same page.”

Building confidence one step at a time.

Craig made managing the family finances easier for Sue by making their investments available on a mobile app on her phone, and working through the family’s investments with her. Alicia guided Sue as she developed an investor profile of her own, reflective of Sue’s individual risk tolerance. It was important to Sue to safeguard the family’s assets. With Alicia’s guidance, Sue decided to shift her portfolio to a more conservative asset mix.

Ben was confident in the skills and values that his father had instilled in him. But he says he appreciates having someone like Alicia whom he can call for guidance, someone “who knows the markets and understands what’s going on.”

In addition to contributing to his employer’s 401(k) plan, Craig had purchased an insurance policy that he had divided three ways, among the two boys and Sue. He wanted the boys to get the money as soon as possible so they could invest more for their retirement. Ben, who also works at the same company his father did, has a 401(k) account that his dad helped him set up.

While growing up, Jason and Ben would receive money for doing chores, and they’d talk with their dad about saving it. Over time, being financially responsible just became second nature. “I’ve always lived below my means, especially right out of college,” says Ben. “When I got my first job, I took that money and invested it, and that’s really paid off. I’ve learned how to spend, manage, and budget my money, so I’m light years ahead of most of my friends.”

Talk about money as a family.

When asked what she would tell others about preparing for the future, Sue says “I’d tell them to sit down right now and talk about what they have—list all their assets, indicate whose name they’re in, and where they are held. Everybody’s going to die, so you have to talk about it. Face your own mortality instead of sticking your head in the sand.”

Doing so can help avoid unneeded family stress when a loved one dies. “Remember how much time Dad spent going through Grandpa’s stuff after he died, and he couldn’t figure out where anything was?” says Ben. Craig’s careful planning saved his wife and sons that burden.

Sue also stressed the importance of opening a 401(k) account and contributing the maximum amount allowed. “At times it hurt, because we could have used that money for something else more fun,” she recalls. “But now I’m so thankful. There are so many people out there who aren’t prepared. They spend more than they earn on stuff they don’t really need.”

Prepare for parents getting older.

Ben is concerned about his mother’s overall standard of living as she ages and what type of care they’ll be able to afford. He says he and Jason have discussed this with their mom because they want to make sure there’s a plan in place when she can no longer take care of herself. That plan includes a long-term-care insurance policy.

Get your ducks in a row.

The Schroeders were fortunate that Craig had been a planner, a saver, and an investor. Just as important, Craig made sure he had instilled his family with the same money skills and values that he possessed.

His favorite motto, “Get your ducks in a row,” meant they didn’t have to search for assets or scramble to replace his income. And that sense of financial responsibility will serve his family well.

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The experience of this customer may not be representative of the experiences of all customers and is not indicative of future success.
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