Please help me. I am a 68 year old woman married 17 years ago with the love of my life. Our finances have always been separated, and I signed a prenuptial agreement recognizing that your child will inherit his property in a living trust (about $ 3 million). I come to our house and it leaves me $ 350,000 in will.
The husband received a lump sum payment from Social Security before meeting us. We have always lived without debt and I have a nice 2020 vehicle. Although I lead a modest lifestyle, his health has prevented us from enjoying a vacation for eight years. I look forward to traveling more in the future. My husband is terminally ill and probably only lives a year or two. Your medical bills are not my responsibility.
In 2019 we built a new house. Although its exact value is unknown, I will probably wipe out about $ 800,000 for this asset, hoping to buy a smaller house when it dies.
I get Social Security and a pension, and now I raise about $ 20,000 a year. I’ve been an ambitious saver and now I’ve reached about $ 350,000 earning good money with my mutual funds. Other shares are worth about $ 20,000, and I have a 457 account worth $ 65,000. I currently have $ 60,000 in savings and $ 20,000 in billing.
I’ve never taken a penny out of my investment, and I doubt it will change much if it requires it until I’m alone. My husband pays our living expenses now. My goal is to enjoy the rest of my life, leaving as much money as possible to my four siblings.
It sounds pretty good to me, but I’ve ventured to keep my savings in stock to get an annual return of more than 15% over the last decade. And I don’t have long-term care insurance.
Can I expect to live my life in good financial health?
I am very sorry to hear about your husband’s illness. It is such a difficult experience to live. I am glad to see that you are planning your finances after his death, this will save you a lot of headaches along with lovelessness and give you stability and security in your advanced age.
To get your answer, you need to make a serious analysis of your current and future planned expenses. Keep in mind, however, that anything can change in a few years, or even a year, so be flexible when planning your finances for the future.
First, develop a plan (some might call it a budget), said Robert Gilliland, general manager and senior wealth advisor at Concenture Wealth Management. Consider all possible expenses that you anticipate after your husband’s death, and consider inflation as well. You can break down these short-term expenses, such as one to five years, the medium term, which would be the six to 10 year period, and the long term, or beyond 10 years. Include your planned housing expenses, and maybe plan to stay in your current home or find something smaller. Also consider health care, which is a significant potential expense in any retiree’s budget; public services; emergency expenses; casual dining or entertainment; etc.
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After performing this analysis, look at your expected sources of income. You mentioned Social Security and a pension, and you may receive periodic withdrawals from your investments. Compare your income with your expenses. “Once you have that number, you can determine what a‘ reasonable ’rate of withdrawal of assets is to determine the excess funds available for travel,” Gilliland said.
A note on your investments: Advisors use this cube approach with investments, in which case it is common to see medium- and long-term needs invested with more risk. Mention that your savings are taking a big risk right now, though, and you should consider talking to a financial advisor, even one with where your money is, to see if this is the right asset allocation. for you. If you live on a fixed income, you can’t afford to lose too much in your wallet. Diversification and proper allocation will be key to your success. “At the end of the day, being able to ensure that funds are available to meet your needs should be the most important thing,” Gilliland said.
Also, contact the Social Security Administration office to begin planning what other potential benefits you might enjoy, such as the widowhood benefit, said Jude Boudreaux, a certified financial planner and partner at the Center. planning. As a result, you could even make more money each month, depending on whether your survivor benefit is greater than your staff, and it doesn’t hurt to start understanding benefits or numbers now. You may be waiting with the Social Security Administration for hours when you call, but it will be worth it. (Here’s more information on SSA survivor benefits.)
See the MarketWatch column Retirement hacks for useful tips for your own retirement savings trip.
You said you did not have long-term care insurance. This can be very expensive, especially since you’re a little older than your typical “ideal” candidate (advisors often suggest that people start looking for long-term care insurance at age 50). It may make sense to you, so it is worth looking into some policies, but know that there are other options for you as well, such as hybrid policies that could offer you long-term care and a possible death benefit for your brothers. Some annuities have long-term caregivers, though you should analyze these products thoroughly before launching into them. (Here’s a complete guide to long-term care insurance for you to see).
This isn’t financial advice, but it’s still important: Stay active and take your health seriously. Take long walks, try to maintain a healthy diet, and keep in touch with loved ones, now and after your husband’s death. These daily activities make the difference for older years.
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Here are some other suggestions. Gilliland said he always recommends taking a year before deciding whether or not to move after losing a spouse, because that time is very emotional and people can make decisions that will eventually be regretted.
You may want to start doing some calculations now and talk to your husband for input. You mentioned a prenuptial agreement, but that doesn’t stop someone from giving a gift to their spouse during marriage. If the trust you are referring to is an inter vivos or revocable trust, your husband could give you some money now without tax consequences while he is still alive. Of course, this may seem like a sticky situation, and this suggestion is by no means intended to cause any drama between you and your husband and son, but it is worth asking your husband what he thinks, Boudreaux said. “Worth exploring.”
Ultimately, you seem to be very aware of your finances, and this will help you later. Try to think of all the possible things you need, financially and in other ways, so that you are not caught unawares when your husband dies. And make sure you and he have a variety of conversations about what he thinks you should know after you leave, from bank account passwords to the little chores he usually takes care of at home.
I wish you the best.
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