Why does household retirement income drop 42% when a spouse dies… on average

Imagine you finally retire, and everything is going great.

You and your wife (or husband if you are a lady) get to do that traveling you kept putting off.

You get to spoil the grand-kids.

And then BOOM. You have a heart attack on the golf course at age 72. Dead.

What happens to your wife’s income? Will she be OK?

Let’s think about this for a second.  There are 2 very big, potential problems.

  1. The wife loses the lower of the 2 Social Securities.
  2. If the husband is getting a pension, it may only have a 50% or 25% or even 0% survivor-ship. So the wife loses that income too.

If you are married and both age 65, there’s over a 50% chance one of you will live to 92.

So there’s a 50% chance your wife could live another 20 years.

On average her income is going to drop by 42% when you die.

There are still bills to pay for the next 20 years.

Taxes, insurance, food, car payments, plus traveling and all that other stuff.

Getting all your income mapped out for the rest of your life, and trouble shooting different scenarios like this to see if there are any holes that need to be fixed, is a good idea.

If you’d like to see an example of the software I use…

CLICK HERE. There’s a short video and a full example.

When we do this for people, it’s usually the first time they get to see everything mapped out like this.

What if the husband dies in 1 year, 5 years, 10 years, 20 years, how is the wife affected.

What if the wife dies in 1 year, 5 years, 10 years, 20 years, how is the husband income affected.

Then if there are any holes, you can go about fixing them.

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