Remember to Make Your Retirement Income Last – For Two Lifetimes

One of the hardest things for a new retiree to plan for is spousal loss, and for good reason. But widowhood is an absolutely critical retirement planning issue for married couples – one that disproportionately affects women.

Just consider these facts:

  • For a couple retiring at age 65, there’s a 50/50 chance that one person will live to age 90.
  • At age 85, only 13% of women are still married; in general, widows or female divorcees are less likely to remarry than men.
  • Women generally experience longer periods of disability in retirement, and are less likely to have a family caregiver available.

As the Society of Actuaries puts it, it’s the longer-lived person in a relationship who is most likely to have problems with inadequate resources – and that person is typically female.

Understanding your risk

If you’re married, we believe that one of your top financial planning goals should be to plan out your retirement income for two lifetimes. That, of course, is where things get complicated.

Numbers like average life expectancy fail to truly capture the reality that many people will live far longer than they expect. “Average” means that half can expect to live less and the other half longer. In fact, a 65-year old woman has a 42% chance of living to age 90, and a 21% chance to living to 95 (for men the chances are about 33% and 12.5%, respectively)!

Don’t ignore the risks: Plan for them

 It’s at this point that many people want to just stop this thought experiment. We understand that completely – after all, many of our advisors are married, too, and these are not pleasant subjects to think about.

But as difficult as it is, making plans ahead of time can strengthen your financial future.

Consider the following steps as you get started:

  • Break out your income sources by recipient. What would the survivor’s income look like if one spouse passed away?
  • If that income is more than adequate to cover elder care and other living expenses, great. If it isn’t, consider what can be changed about your retirement income plan to generate enough money for the survivor.
  • For income from investments or other market sources, try a stress test. This is when you ask yourself what would happen during a significant market downturn – and it’s especially thorny if the more financially active spouse has recently passed away.
  • Do a simple “what would you do if?” exercise. Where do you feel gaps in your financial knowledge? What would be your most worrisome financial issue if you had to face it alone?

This is a basic starting point, but it can help to get you started on both income planning and on talking through more basic financial issues. Many couples have a designated “financial person” who keeps on top of the family’s affairs. But by raising these concepts now, you might realize that it’s time to more fully share the load, or to bring the less active spouse up to speed on what’s going on and how to handle it in the future.

Lay your financial foundations

Issues affecting the very elderly are, put simply, more likely to affect women: for every 100 women ages 90 to 94, there are just 38 men.


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That’s part of the reason why we generally encourage couples to pay special attention to the risks facing widowed women. The basic reality is that widowhood can be a significant risk factor for female retirees, who typically live longer and often have lower lifetime income to fall back on.

As you start planning for a potentially long lifetime, ask yourselves some of these questions:

  • How would, say, 2% annual inflation impact your basic cost of living over the next two to three decades? Does your retirement income plan anticipate these inflation effects?
  • What resources do you have in place for a survivor’s needs? Elderly retirees are more likely to need professional services, especially if disability or chronic illness strike. This is especially pressing for widows, who may not have a family member to count on for care. We generally recommend considering the possible need for assisted living or nursing care, in-home aid services, or general help with the tasks of daily living.
  • Have you budgeted for healthcare? In addition to long-term health expenses like nursing care, basic healthcare needs also need to be addressed in your retirement plan, including prescription drugs and medical support.

The importance of health expenses in particular cannot be overstated: a US Census study found that just over 80% of people who were in their 90s and living at home had at least one disability. That means greater need for support, and for many retirees the answer becomes a nursing home. About 20% of people in their early 90s live in nursing homes, the majority with a disability, and about 30% of those in their late 90s also do.

You may also want to discuss issues like your overall asset base, including your home or investment accounts, and what your “widowhood plan” for these assets might look like.

For example, some couples prefer to downsize early in retirement to make late retirement a little less complicated, while others bring their larger family into the process to build appropriate contingency plans.

These are very difficult and extremely personal conversations, which is why you might be surprised to find that it can be helpful to bring an advisor into the fold.

A qualified and compassionate advisor can help you keep the conversation on track, ensuring the important issues are addressed and helping to manage some of the emotions that might arise.

The importance of planning: An Example  

 Our client Rose explained the benefits of this kind of planning far better than we could. We share her story here:

We came to Vitucci & Associates to do our retirement income plan. I thought it’d be fun – we’d come in and talk about budgeting for vacations and moving closer to our kids. When our advisor brought up the need to consider the impact of widowhood on our financial plan, I actually felt myself becoming distraught. I hadn’t really thought about this in detail before (my husband Gary worked with the attorney on our estate plan) and it was awful to do this kind of “end of life” planning.

 But do you know what? We walked away from our financial planning process with a PLAN. If I ever lose my husband, I know exactly what’s going to happen. I know who I’m going to call. I know what resources I have. I know what risks are out there and I know about the strategies to deal with them. I really feel that if I’m ever 85 and alone, I will be okay – I will be able to handle it.

 And that has been more than worth it for me, and (this one surprised me!) also for Gary. We just feel so much more prepared, so much more competent in our retirement. And that is also making it easier to enjoy the stuff we’re doing today, like traveling and moving.

 I tell everyone that if they don’t have a plan already, they are really missing out.

 Planning for more than one generation?

Many couples aren’t just facing down retirement: they’re also helping elderly parents or guiding their children into adulthood. If you’re a member of the “sandwich generation,” too, you might be tackling some complex financial planning issues!

As part of your planning, don’t forget to sign up for our free eBook series on navigating your financial plan as a member of the sandwich generation. It’ll give you an overview of some of the key planning issues you might face – and what to do about them!

Download Sandwich Generation Finances and get started with multi-gen planning today!


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Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

Important Disclosures

& Associates Insurance Services or United Planners Financial Services (United Planners). The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. United Planners does not render tax advice.

Securities and advisory services offered through United Planners Financial Services, member FINRA, SIPC. Pasquale Vitucci, CA Insurance Lic. # 0758212, is an Endorsed Agent of Vitucci & Associates Insurance Services CA Insurance Lic. # 0I06319. Vitucci & Associates Insurance Services and United Planners are separate and unrelated companies.
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Further Reading

Life expectancy:

Stats on aging and widowhood:…/research-2014-impact-risk-woman-report.pdf

Census study on older retirees: