10 financial considerations for retired married couples.
You’re retired; life’s good; here’s how to keep it that way.
Last week you went on that long-awaited Alaskan cruise; and next month you’ll be at your timeshare in Aruba; Or maybe you’re just tending your garden and catching up on some reading. Either way, life is good, now that you’re retired.
We’d like to help you keep it that way. Here’s a short list of some of financial questions that retired married couples should have answered already or should consider doing so soon.
- Are you ready for the really long run? It’s no longer unusual for people to live a century or more these days. If you retired at 65 and live until you’re 100, are you prepared to take advantage of the next 35 years of life? Think about all the things you and your spouse want to do, the passions you’ve put aside, the bucket lists; and then consider how financially you’re going to fulfill them all together. A little planning can help.
- Have you maximized your Social Security benefits together? This is particularly important, especially if you want to ensure the surviving spouse receives the highest possible Social Security income. This can also help you increase the likelihood that other assets will last longer in retirement.
- How much do you really need? Retirement planning and budgeting are important ways to figure out what you need now and later. Most people realize that after examining their current expenses that they’ll need about 70-80% of what they spent before retiring in order to live comfortably according to their standard of living.
- Do you have an estate plan? Now that you’ve taken a good hard look at the assets you have and a better understanding of your finances overall, why not create or reevaluate your will or trusts and insure the security of your spouse and/or children?
- To downsize or not to downsize? This is the question that many retirees are asking themselves. The fact is the value of your home may not be what it was a few years ago, so looking to sell it to add to your retirement funds may not be the most prudent action to take right now. After you consider all the time and costs involved, the inconvenience of packing and moving, as well as any depreciation your house may have incurred, you should think about whether or not selling at this time is worth all the trouble.
- Have you both named your beneficiaries? Many of the places you’ve invested your money allow you to designate beneficiaries in case of your death. Naming beneficiaries allows you to pre-determine who will receive the death benefits of your life insurance policy, trust, 401(k), IRA, or employer-sponsored retirement plan. You can name a living person, a trust, your estate, or any combination of these options. You and your spouse should periodically review and keep all your beneficiary designations up-to-date because significant life events such as marriage, divorce, or a birth, adoption, or death in the family can significantly change your perspective on who gets what.
- Do you have life insurance? A surviving spouse may face financial hardship in many ways: loss of one Social Security paycheck, reduction or elimination of employer-sponsored retiree medical benefits or pension, or increased expenses due to disability and poor health at an older age. According to 2013 LIMRA research,1 only a quarter of married couples consider the need to provide for one spouse if the other dies, a major concern when planning for retirement That same LIMRA analysis finds that for almost half of 65-year-old couples, one spouse will outlive the other by 10 or more years, and in 3 out of 4 couples, one spouse will outlive the other by at least five years. That’s why you should always consider life insurance.
- Have you considered long-term care insurance? Health insurance can cover a lot, but there can be situations that are not covered. At some point, we all may need some sort of long-term care. Will a spouse or other family members realistically be able to help? It may be difficult if you need help with everyday tasks, such as getting dressed. The costs associated with long-term care services may be expensive and prices can vary by region. Long-term care insurance may be a possible answer to help with some of the costs. See www.newyorklife.com/products/long-term-care-cost for more information.
- Are you financially liquid and flexible? The same investment strategy you’ve been following during the accumulation stage may not be the optimal one after retirement. Since you’ll be partly dependent on these assets going forward, it is wise to consider taking a more conservative approach. You can’t afford to take the same risks to increase your assets as you once did, so maybe it’s time you shift gears to ensure the smooth ride you’ve been looking forward to all these years. In addition to shifting assets with preservation in mind, also consider how you can make those assets a little more liquid and flexible, just in case you need them unexpectedly.
- Should you retire? A lot of people are realizing that even with all the planning, saving, and investing, they’ve done that they may still need to work just a little longer or start a second career, doing what you really have always wanted to do.
Once you’ve considered these questions, you may need some help in determining the best course of action. Along with your tax and legal advisers, we’re here to help. You can contact one of our agents for help with any of your retirement needs. Whatever you decide, enjoy! You’ve worked hard for it.