By: The American Academy of Estate Planning Attorneys

You and your spouse have worked hard to save for your golden years. But have you planned for a long, secure retirement if one of you outlives the other? Study after study shows that women tend to fall behind men when it comes to planning for retirement, and there are myriad reasons for this situation.

During their pre-retirement years, women traditionally have not earned as much as men, and mothers have often curtailed their career plans in order to raise children. This translates to less opportunity to save for retirement needs. Just as significantly, women statistically live longer than men, meaning that retirement tends to last longer for women. Further, women are more likely to need long-term care and other services as they join the ranks of the very elderly.

As a married couple, it’s essential to approach retirement planning with the goal of ensuring that the spouse with greater longevity, usually the wife, is set up to enjoy a secure, worry-free retirement. This goal can be accomplished by paying special attention to certain key financial areas.

  • Social Security.  Did you know that when you choose to start receiving Social Security benefits can make quite a difference in your retirement income? Delaying retirement can increase your Social Security benefit by as much as 8% per year. This is especially significant when one spouse was the higher wage earner. If, for example, the husband earned more during his working years, his widow could claim his higher Social Security payment when he passes away instead of relying on her own lower monthly benefit. So, the longer the higher wage earner waits to retire (ideally until age 70), the more retirement income the surviving spouse will have ultimately.
  • Life Insurance.  Life insurance isn’t just for families with young children. If you qualify for a policy, the death benefit can be a lifesaver to your surviving spouse, who will be free to put the funds toward household expenses, medical costs, or reducing debt.
  • Annuities.  If you are considering purchasing an annuity to provide an additional income stream during retirement, you may want to look into one that carries a “joint life” benefit. Under this arrangement, annuity payouts continue as long as either one of you is living.
  • Long-Term Care Coverage.  Not only do women tend to outlive their husbands, their longevity means that they are also more likely to need long-term care at some point during their retirement years. Whether it’s a nursing home, an assisted living facility, or a home health care arrangement, long-term care is expensive. If you qualify, a well-chosen policy of long-term care insurance can help protect your family’s assets and pay for care.

Aside from seeking reliable advice from a qualified professional advisor, perhaps the most effective way to make sure both you and your spouse have the best possible retirement plan in place is to make planning a joint effort. Both of you should have a good grasp of your family’s finances and you should work together to make the major decisions that will affect both of your lives during retirement.

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