Retirement is another chapter in your life; one that requires not only planning but day-to-day maintenance once you get there. And if you have a partner in life, it’s important to remember that your retirement, like a tandem bike, is built for two.
Planning for your own retirement is complicated enough, but doing so at the same time as your spouse can be daunting, with additional details to consider.
For starters, you and your spouse may have two completely different sets of needs in retirement.1 One may have health problems requiring expensive medications and frequent visits to the doctor. The other may live 20 years or more after the first spouse dies. Two people. Two different income needs.
When most people plan for retirement, they figure out how much household income they need. Their income sources may include two Social Security checks, a pension or other employer-sponsored plan, and withdrawals from personal savings accounts. But have you thought about how much income would be lost when one spouse passes away?
In some cases, the household income may go down to one Social Security check, less pension income and reduced personal savings once lingering medical bills and funeral expenses have been paid. In this situation, it’s helpful to know that a surviving spouse may be eligible for a lump sum death payment of $255 from Social Security to help pay for funeral or burial costs.2
Married couples frequently enjoy savings from shared costs by living in one house with one set of utility and cable bills. However, when one spouse passes away, those costs usually remain static; it’s not as if they’re reduced by half because only one spouse lives there going forward.
Consider this situation and ask yourself — will the surviving spouse need less money to maintain the household? In many cases, that person will likely need more money to hire someone to do some of the chores previously handled by the deceased spouse. Will the survivor have lower medical bills? Not likely if he or she lives into their 90s or beyond. What about housing? Will there be enough money should the survivor need living assistance or full-time nursing care down the road?
With all these questions to consider, it may be worth exploring various ways to help protect a surviving spouse’s financial situation, such as buying life insurance3 and/or working with a qualified attorney to establish a trust.Please keep us in mind if you and your spouse could use some help planning for retirement income. As an independent financial services firm, we help people create retirement strategies using a variety of insurance products to custom suit their needs and objectives.
Content prepared by Kara Stefan Communications
1 Jeff Brown. U.S. News & World Report. May 17, 2017. “Investing Advice for May-December Marriages.” http://money.usnews.com/investing/articles/2017-05-17/investing-advice-for-may-december-marriages. Accessed May 26, 2017.
2 Wesley E. Wright, Molly Dear Abshire. Laredo Morning Times. May 18, 2017. “Elder law: Social Security – Many fail to apply for death benefit.” http://www.lmtonline.com/news/article/Elder-law-Social-Security-Many-fail-to-apply-11156931.php. Accessed May 26, 2017.
3 Jamie Hopkins. Forbes. April 27, 2017. “Why Life Insurance Is Essential for Retirement Planning.” https://www.forbes.com/sites/jamiehopkins/2017/04/27/why-life-insurance-is-essential-for-retirement-planning/#4b15989b31cd. Accessed May 26, 2017.
Life insurance policies are contracts between you and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.
This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice. We are able to provide you with information but not guidance or advice related to Social Security benefits. Our firm is not affiliated with the Social Security Administration or any governmental agency.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
Source: Woods Blog Old