We talked about how much it takes for retirement, but we didn’t talk about…

[Bear Paw Jack]

have you talked to your spouse about the plan for how much money the left over spouse will have to live on. The reason I ask, is I already know several couples that are already worried about making it through retirement with both getting their social security. When one passes what's the surviving spouse going to live on?

One of the couples I know in that condition, the husband pulled me aside and said does your wife know what she's going to do if you pass first. He suggested I write up a plan, so she would know the plan. He figured neither her or my son could reproduce what I had created and suggested we plan on moving back to where her family and our son and grandchildren are. That's how I ended up back in Alaska. I even included that if she found someone else, don't get married, live together, that way she could leave what she had to our son and he could do the same with whatever he had to his family.

How many of you have had "the talk"?

 

[watashie00]

Yeah,, we have,,, it really sux. Trying to get the house paid off,,,, already been told by one set of kids,,, "dont even think we are going to take care of you, not being mean,,, just aint going to do it!",,, and,,,, I believe them from what I have seen. The son in law, informed me that I shouldnt be building a pond, or barns, or anything "HE DIDNT APPROVE OF OR WANT, BECAUSE HE ISNT GOING TO HELP ME TAKE CARE OF IT WHEN I GET OLD",,,, I said,, "Pay very close attention to my hands when they carry me out on the stretcher,,,, and google what a "plunger" is,,, and contemplate all meanings,,,,, because before I see your fat meathooks on a single thing I built, own, or cared for,,,, I will blow it to the moon as they load me in the ambulance..... so I made a target for the kids out of a goofy picture of him in this silly plaid pj outfit that his mommy dresses him up in for christmas,,, and then a 45 year old man goes on a scavenger hunt for his mommy ,,,,, guess the little puke doesnt get marine humor,,, i digress

 

[Dan in MI]

Not to sound like a jerk, but we don't need to have that talk. I set us up so it makes zero financial difference who goes when.

 

[Mobuck]

If I say what I'm thinking, most will call me an inconsiderate jerk. Grouch Attack demanded her 'survivor's annuity' be secured when I retired the first time. That cost a pretty significant sum over the years but she's assured a subsistence level monthly payment if she outlives me. If she doesn't, that cost me several thousand dollars per year since 2009. To say I've not been happy with this would be an understatement. She had opportunities to find and work a job with a decent retirement plan of her own but she chose to go with a low input, low pay, basically dead end job w/o much in the way of retirement income. In fact, my retirement income (AFTER paying our health insurance) exceeded her 40 full time job income .
Now that she's retired, there's a constant nag about why my annuity isn't keeping up with the ever increasing household expenses. WHAT?
I guess my answer to the OP's question is: I don't give a darn. I'm pretty sure she'll sell all the stuff I worked so hard to have ASAP and blow the $$ on a new car ( like her Mother did 30 years ago).

 

[hittman]

Did people not buy life insurance in their working years?

 

[Kevin]

Not to sound like a jerk, but we don't need to have that talk. I set us up so it makes zero financial difference who goes when.

Is that what a trust does? I know my folks have some clause in their pension. I know my dad does. That he takes less, but then if he buys the farm first, my mom will continue to get his pension. This is opposed to him taking more but when he goes, my mom wouldn't get anything.

But would establishing a trust do something similar?

 

[g5m]

We saved and saved and saved money. And the inflation eats it up. Inflation has been referred to as "the cruelist tax of all".

But, fortunately, we are okay, but people we know are living paycheck to paycheck and they weren't in the past.

 

[Dan in MI]

Is that what a trust does? I know my folks have some clause in their pension. I know my dad does. That he takes less, but then if he buys the farm first, my mom will continue to get his pension. This is opposed to him taking more but when he goes, my mom wouldn't get anything.

But would establishing a trust do something similar?

I do not believe so. A trust is great for transferring money and possessions to your children, but should have no effect on your spouse. To explain why it doesn't matter who goes first for us. Either way, we only lose her SS portion of our income.

I just planned on the the 3 legged stool they used to preach. Savings, retirement, SS.

Savings - Started saving as soon as possible. If you company has any type of matching do all you can to get all the "free money" they will give. A 2% match is still instant 2% interest at zero cost to you. Any raise I received was split. A portion added to savings a portion to live on (as long as we were ok prior to the raise) Didn't hurt our spending and added to the future. Also, any money taken out pretax doesn't hit your paycheck quite as hard. Ballpark 30% less. That said, I'd still go Roth if I had the opportunity.

Retirement - Take what they will give if you have one. In MI you can't leave your wife off from receiving benefits unless she signs off early on. This does reduce your benefit alittle, but covers her. I had zero trust in the company to keep my retirement flowing so I took a lump sum and invested it. That does three things, gives me control of my money (which is growing at a far better rate), doesn't limit what my wife gets if i die first, and lastly I get 100% of what I earned. I can leave some to my kids if any is left. If both of us die early on with a pension the company gets to keep 100% of what I should have received, now it still goes to my family.

SS- because I did steps 1 and 2 well, it really doesn't matter, but I am taking it ASAP. That reduces how much of my savings I dip into each year therefore letting grow even more.

I'm pushing 6 years retired and am not eligible for SS yet.


Life insurance can be good if you start young enough, but then you need to look at term vs whole life etc. My wife was very upset I let our life insurance drop when I retired. ( it was through the company) It also took me a while to get it through to her if we have enough money for two of us to live out retirement shouldn't it be more than enough for one?

Now life insurance is a good way to develop family wealth. It pays out tax free. I know some people even have their kids pay for policies on them as a retirement fund. They pay/invest less than traditional ways and get the payout tax free.

The biggest thing is to plan ahead as early as possible. I'm no financial wizard, but I was able to do it.

 

[Watertender]

My wife and I are set either way. If I go first she gets the same amount as I get on my pension. If she goes first I get her investment money.
The fun part is who gets the worldly goods when both of us are gone. If I am the survivor the stuff will go to some conservative friends and charity. If she is the survivor her liberal sister and spoiled nephew will get it...

 

[the_leper_colony]

...How many of you have had "the talk"?

Yeah, we've talked about it - which is the main reason I sold most of my guns & ammo over the last few years: the missus wouldn't know what to do with it if I wasn't around. Selling it all to a local FFL who was a straight shooter got most of our money out, and because of the weird market (China virus, election shenanigans, etc.) he was still able to make a profit.

As always FWIW, IMHO, YMMV, etc.

 

[Bob Wright]

As to the death of a spouse, I was in some financial straits when Nita died. We were livinf on Social Security plus a small annunity. With her death I lost her S.S. income, which was just under $1000 monthly. I had no policy on her but did have some savings to cover her burial. But now I've set up a will and appointed an executor, the short of it is that my estate be sold and proceeds go equally divided to my three girls.

Though we had good medical insurance, our part of her medical expenses took a hard hit on my finances. Our out of pocket expenses were pretty high for her last days.

 

[txramfan]

Is that what a trust does? I know my folks have some clause in their pension. I know my dad does. That he takes less, but then if he buys the farm first, my mom will continue to get his pension. This is opposed to him taking more but when he goes, my mom wouldn't get anything.

But would establishing a trust do something similar?

A trust provides protection from public disclosure of financial information upon the passing of a person is my basic understanding . A Will goes to probate a Trust doesn't. A Trust and a Will have similar taxes, step up in values and other things .
My parents have a trust , A good friends parents also had one. If you are a private person set one up, I need to our basic will is real old.

 

[Mobuck]

I only 'saved money' for the last few years knowing I needed some freeboard for those 'unexpected catastrophes' after I can no longer work even a part time job. Prior to that I was 'investing' in land and paying down long term debt. I haven't owed ANYONE money for over a decade. This aversion to incurring debt has likely cost me in the long run due to missed opportunities for profit now and then.

 

[Bob Wright]

I might add that if you or your spouse is a military veteran, most funeral directors have special rates for funeral arrangements. And of course, burial is free, including a headstone. This in a military cemetery. One local cemetery will provide a free plot for the veteran, charging only for the spouse. And having viewing and service at my church was free also.

Things to consider.

Bob Wright

 

[RSIno1]

I had the option on my retirement of - when I die no more is paid out (biggest monthly payment) - when I die payments continue at same level (lowest monthly payment) - when I die she continues at 1/2 (best balance - and ok if you don't have big monthly expenses, like a house payment).
My big concern is inflation. My retirement is capped at 3% max. If inflation is 1% I get 1% if it's 3% I get 3% when inflation is 7% I still only get 3% so I fall behind. I expect to live 10-18 years (based on family history) and with Bidenomics I'm already seeing my retirement fade.

 

[cowboycopus]

Soon, very soon.

 

[Goldstar225]

Yes, I've had the conversation with the wife. My military retirement will stop but she will continue to draw 75% of my police pension and transition to my SS and she will still have her state pension plus a healthy life insurance policy, a paid for house and no debt.

 

[watashie00]

Did people not buy life insurance in their working years?

she loses 50% of my retirement and all my disability, those are the rules

 

[hittman]

Life insurance proceeds are tax free.

 

[Danjet500]

One thing that hasn't been mentioned is vehicles or boats or most anything with a title. In order to avoid issues in probate or potential arguments among heirs, titles can be noted as "Transfer on Death" to whomever the owner desires. This also helps if only one spouse's name is on the title. I don't think this is the case in all states but it is in Ohio and may be in yours.