Generating an ongoing, reliable retirement income can be tricky – especially given the volatility of the stock market and low-interest rates. If you are married, though, there is an added factor to consider – and that is keeping this income flowing for the surviving spouse after the other passes away.
How Much Income Will You Need?
In order to live the retirement of your dreams, you must first come up with an approximate idea of what your expenses will be in retirement, and in turn, the amount of income that you will need.
Some of the most common retirement income generators include:
- Social Security
- Defined benefit pension plan (employer sponsored)
- Interest/dividends from personal savings and investments
- Rental Income
- Reverse Mortgage
Even if you have more income than you need to pay your expenses, though, that could all change if you or your spouse passes away. That is because when an individual dies, it is possible that various income sources, such as employer-sponsored pension benefits and/or Social Security, may go away (or be reduced).
As an example, if you are receiving Social Security benefits, and your spouse is receiving spousal benefits from Social Security – where the amount is typically 50% of the worker/retiree’s income amount – when one of you dies, the survivor is allowed to keep the larger benefit payment, but the smaller one will go away.
So, for instance, if you generate $2,000 from Social Security and your spouse brings in $1,000 per month – for a total of $3,000 per month for your household – if one of you passes away, the larger $2,000 per month will continue, but the $1,000 will disappear.
This means that the survivor will lose roughly 33% of the household Social Security income. And in many instances, this could mean the difference between continuing their current lifestyle, or drastically having to cut back. Depending on the situation, it could even require the survivor to make tough choices regarding what they will spend their income on – such as food OR necessary medications.
One option for making sure that income continues going forward, though, is to purchase an annuity and choose the joint and survivor income option. That way, income will continue to flow in, even after one of the recipients dies, allowing the remaining recipient to continue relying on the incoming cash flow.
Do You Have a Plan in Place for Ongoing Income – Even After You or Your Spouse Passes Away?
A successful retirement has far less to do with net worth than it does with ongoing and reliable income generation. That is because it is income that allows you to pay your essential – as well as possibly your non-essential – expenses. With that in mind, having an income plan in place before it is actually needed is highly recommended.
At Annuity Gator, we specialize in educating consumers – and financial advisors – on how to secure streams of reliable, ongoing income in retirement, which can alleviate the concern about running out of money when you need it the most.
So, if you have questions, or if you’d like to chat one-on-one with a retirement income specialist here at Annuity Gator, please feel free to reach out to us directly by calling (888) 440-2468, or by sending us an email through our secure online contact form. We look forward to helping you protect yourself and those you care about – both now and in the future!