Eighty Percent

I read a sobering statistic last week:  eighty percent of women will die single.

 Though sobering, I guess it should not be surprising since women, on average, live four to five years longer than men.

 What is sadder, however, is another eighty percent figure: women are eighty percent more likely than men to live in poverty in their later years of life. 

 Put these two statistics together and it becomes clear that women as a group suffer a financial disadvantage, especially after about age sixty, and the men in their lives owe them a responsibility to not leave them unprepared.  It takes some planning, but it’s really not that hard.  Here are some simple steps a spouse—of either sex, really—can take to help his mate.

 1. Don’t do all the banking and investing alone.  Involve your spouse at least to the point that she knows which bills need to be paid each month and what bank and investment accounts are owned either jointly or singly, along with the account numbers and passwords.

2. Be sure the beneficiaries are named for each account.  For a bank account that is owned by one spouse and not the other, simply making a “pay on death” (POD) designation is enough.  Laws prevent a spouse from being excluded as a beneficiary on some accounts without her knowledge, but keep beneficiary designations current on investment accounts, insurance policies, etc.

3. Have all end-of-life documents (will, power of attorney, trust, etc.) up to date.

4. Choose your annuity payment carefully.  If selecting an annuitized pay-out (i.e. with automatic and regular payments during retirement) for a pension or other retirement account, choosing the highest dollar payment is likely not the best choice if two or more people depend on that income.  The highest monthly payment likely comes when selecting a single-life annuity, meaning that the payments only keep coming as long as that one person named as the single life is still living.  If he dies, the income stream ceases for the survivor.  Far too many women suffer this fate.  Opt for the dual-life annuity.

5. Thoroughly understand the ramifications of your choice of when to start drawing your Social Security retirement benefits.  Yes, you may begin collecting benefits as early as age 62.  But each year you delay collecting, the monthly benefit grows.  You may qualify to receive $2000 per month at full retirement age (currently 66), but if you begin collecting at age 62 the benefit will be closer to $1500…permanently (except for cost of living increases).  It will not go up to $2000 when you reach 66.  If you are the husband in a married couple and have the higher Social Security benefit, it is usually advisable for you to delay filing for benefits for as long as possible in order to maximize your benefit.  Your wife may collect a smaller monthly check and together you may manage to have a comfortable lifestyle.  But if you die first, her Social Security benefit becomes a survivor’s benefit, and the amount will be what you were collecting and nothing else; she cannot collect two Social Security benefits.  Maximizing the larger of a couple’s two Social Security monthly checks is one of the most important ways to guard a widow’s financial security.

 6. Consider life insurance.  If you are not comfortable with the outlook for an income stream for your surviving spouse or have already made a bad and irrevocable choice with your Social Security or retirement account benefits, you might be able to help secure her financial stability as a widow with an affordable life insurance policy.

 These are just a few steps to take.  Review your own financial situation and ensure you have a plan to ensure not only how much money to bring in each month but for how long.

Until next time,

Roger

 “Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.” I Timothy 5:8 NIV®*

 *Scripture quotations taken from the Holy Bible, New International Version® NIV®

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