In the realm of retirement planning, there is one goal that summarizes the thrust of our efforts: maintaining your quality of life. When we engage in financial planning for retirement, that is what we’re fighting for. However, upon entering the uncharted waters of retirement, there are no shortage of risks that can threaten that quality of life you plan so hard for. In a two-part post, I wanted to bring up a few of the most common post-retirement risks that can jeopardize your stability.
Death of a Spouse
It’s natural to say that you can never prepare for this, and on the level of emotion, it may be true. However, on a practical level, especially in the realm of retirement funds, preparing is exactly what you must do.
The emotional burden is known, but losing your spouse can also result in an economic burden. That spouse may have provided monthly income of some kind. The spouse may have been a caregiver to a degree, meaning added health care costs are a given.
There is a variety of options out there in the form of products to mitigate this risk and its effects, including life insurance or annuities that carry the option of survivor income. However, all of these products are most effective when structured within the greater context of your retirement plan. You want to know the specific risks you are open to, and find the best way to meet this risk head-on. Take your will and estate planning seriously from an early stage. The stability this will afford you in the uncertain time is invaluable.
Change in Marital Status
This is yet another massive life change that carries significant emotional and economic ramifications. Divorces, obviously, but late-life marriages, too, can create violent shifts in economic security.
“Planning for divorce” is not really something you do, especially if you and your spouse have been happily married for a long time. However, if divorce does arise, it’s very important not to assume. Don’t take anything for granted. Get sound legal and financial counsel, because more than in your younger years, a divorce may mean your standard of living is on the line.
Marriage in retirement, too, can raise variables. In a lot of ways, it can be a great benefit financially, allowing the couple to pool resources like Social Security and retirement accounts. However, without personal planning, you can open yourself up to unknowns. It’s a crucial step for late-life lovebirds to sit down and tease out all the economic changes that will come their way.
And for retirees with beneficiaries, don’t disregard the idea of a prenuptial agreement. You owe it to your beneficiaries and to yourself. What’s more, as people who have both lived and loved for decades, a little practicality will likely do nothing to rain on you and your new spouse’s parade.
Retirement planning—especially later in the game—can be a challenge, and it helps to have a guide. If you’ve got questions, give Miramontes Capital a call.