Rethinking your retirement plans after the loss of your spouse

We can help ease the stress of losing your spouse during retirement.

Survivor benefits and income decisions

Many retirement income sources, such as Social Security, military pensions, private pensions and income annuities, have a survivor component that should be reviewed after the death of a spouse.

Military pension and veterans benefits for the surviving spouse

Navigating through military retiree pay and benefits can be complex. Fortunately, guidance is available through various resources"Opens in a New Window".‍ ‍ ^{See note 1}

Social Security benefits for the surviving spouse

When one member of a married couple dies, the survivor is eligible for survivor's benefits, also known as a widow's or widower's benefits. This is equal to 100% of the deceased spouse's benefits. The rule also applies to a divorcee whose former spouse has died. If the couple was married for at least 10 years and the divorcee remained unmarried until age 60, then the surviving spouse is eligible for either a widow's benefit or their own benefits (based on his or her own individual earnings history). Only the higher of the two is paid, not the cumulative total of both. Again, this decision can be complicated, and more information can be found with the Social Security Administration"Opens in a New Window".‍ ‍ ^{See note 1}

Private pensions

Private pensions are becoming a thing of the past. If a deceased spouse was receiving pension income either through a former employer or through a private annuity, the surviving spouse should contact the pension provider to verify what, if any, survivor benefit is available to them.

Annuities

Decisions must be made with the loss of a spouse regarding existing annuities and their payouts, just like a private pension. This may also be a good time to consider converting a lump sum into retirement income.

Retirement account decisions

Although many retirees may hold some investments that pass to the survivor at death, most retirement accounts such as IRAs and 401(k) plans will require the beneficiary to make decisions regarding the account. Whether the surviving spouse can or should treat the inherited account as their own — or when they must start taking minimum distributions — can depend on several factors. Since retirement account rules for beneficiaries can be complex, you should review the IRS Publication 590-B"Opens in a New Window".‍ ‍ ^{See note 1}  Also, seek appropriate tax or legal guidance.

New expenses after loss of a spouse

The old saying that "Two can live as cheaply as one" may be true. But when retirement income is reduced after the loss of a spouse, then it may be time to reexamine some of the bigger-ticket items in the budget.

Housing decisions

Consider your housing arrangements after losing your spouse. If you've been in housing that's too big or no longer appropriate for you, then think about the cost, or savings, of making a change. Although many retirees choose to age in place, consider not just potential savings but also quality of life.

Transportation

With the loss of a spouse, and possible change in housing, consider whether you'll still require an automobile. Insurance, taxes or permits, and periodic upkeep are all expenses that you will continue to incur, even if you don't drive a car.

Legal and estate planning issues

Although you may have already done a good job of preparing your legal documents and estate planning before the loss of a spouse, now may be a good time to review your legal affairs with appropriate legal counsel. Here are some key items to possibly update:

• Healthcare power of attorney
• Durable power of attorney
• Living will
• Will or trust documents
• Third-party contact for financial institutions
• Titling of assets and new beneficiaries
  

Although losing a spouse can be difficult, it's important to make sure that your financial future is secure. Be sure to seek appropriate guidance from tax and legal professionals.