If there’s a significant differences in ages between you and your spouse(Alan Greenspan and Andrea Mitchell come to mind- he is 19 years her senior) there may be some things you should know. Hopefully you find the following useful.
Consider This…
Retirement planning advice for married couples tends to assume two things: You are pretty close to each other in age, and the husband has always been the primary bread-winner. But in this age of late marriages, divorce, and second marriages, what if there’s a much younger spouse? Large age gaps between spouses requires planning. Here are some things to consider:
- Expect to work longer. You may have to stay employed past the typical retirement age in order to build up a larger pot of savings. If, for example, your spouse is 55 and you die, your nest egg may have to fund your spouse for 40 years.
- Plan to spend less. If you are a typical retired couple, conventional wisdom says that you can spend 4 percent of your savings in the first year and give yourself a raise for inflation in each subsequent year. But with a much younger spouse, you may have to consider dropping your withdrawal rate to around 3 percent.
- Reduce withdrawals. At 70 ½ , you have to start taking money out of an IRA. If your spouse is more than 10 years younger, you can reduce the required withdrawals – and stretch your savings – by using the IRS’s joint life expectancy table to calculate the amounts.
- Mind the insurance gap. If the older spouse carries the couple’s health insurance and switches to Medicare at 65, the younger spouse will need to buy an individual health policy.
- Adjust your Social Security. Spouses with big age differences should generally approach Social Security as if they were single, says Bill Reichenstein of SocialSecuritySolutions.com. If you have health issues and don’t expect a long life, take Social Security at 62. Otherwise, wait until 70.
- Consider life insurance. If you haven’t saved enough, look into a 20-year term life insurance policy to cover your spouse’s future needs. You can get it even at 65 if your health is good.
- Plan your pension. If you’ll get a company pension, don’t take the lump sum payment when you retire unless your spouse is already well provided for. Instead, take the maximum joint and survivor option. It will continue to pay your surviving spouse for life.
Be mindful that the younger spouse might find his or her career interrupted and savings slashed due to the needs of an aging spouse for medical and personal care. It’s something you need to account for in your planning – and all the more reason to manage your spending and savings.
If you have further questions, please reply or comment and I will contact you. At North Shore Retirement, we offer retirement planning services including help with Social Security. If you’ve paid into the system for any amount of years, you absolutely need to take your benefit in the best way possible for you based on income needs, your health, and your family. We can help you figure out the optimal method–you’ve got to get this right! You only get one shot at this! Contact me or my office and we can get you on the right track!
This information has been prepared by Lakes Publishing, LLC. The information provided is educational in nature and is not intended to be construed as, legal, tax or investment advice and does not necessarily represent the views of the presenting party. Specific federal and state laws relevant to a particular situation may affect the applicability, accuracy or completeness of this information. Material presented is believed to be from reliable sources, but its accuracy is not guaranteed. If additional information is needed, the reader is advised to seek professional services. ty52 \lsd
Jeff Dragon 
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