After You Leave – HumbleDollar

After You Leave Richard Quinn  |  Feb 20, 2022, 3:53 am ET

VIEW ANY NUMBER of YouTube videos on retirement planning, and you’ll find advice on how much you need to save each month, how to invest, how much to accumulate and how to generate retirement income. The same is true for the experts who write blogs. All this information relates to the retiree. Rarely—actually never—have I seen a discussion about survivor benefits.

Even the 4% rule uses an assumed 30-year retirement period, apparently ignoring the possibility that retirement income needs to last over two lifetimes that may extend beyond 30 years, a distinct possibility if one partner is several years younger.

I’m sensitive to this issue because, during my working years, I received many calls from new widows asking about their survivor pension. Often, there was none because their husbands had selected to receive income only over their life, with no survivor benefit. Times have changed, of course. There are new laws to protect spouses, plus many couples have dual incomes. But at the same time, retirement is more the individual’s responsibility than ever before.

Given the reported dismal state  of retirement planning, I wonder if people are thinking about dual lifetimes. Couples should have detailed discussions about how much income there will be after the first spouse dies.

Does each spouse have their own income source? Are they drawing from a single pool of retirement assets? To what extent do they count on Social Security? What’s the age difference between the couple?

I have both a qualified and nonqualified pension. I selected a 50% joint-and-annuity for one and 75% for the other, meaning my wife will receive half and three-quarters of these two pensions, should I die first.

Opting for the survivor annuities reduced the monthly payout on the two pensions, but the reduction was worth the peace of mind. On top of that—and contrary to conventional wisdom about dropping coverage as you grow older—I maintain life insurance equal to about two years of expenses. My wife will also have access to our investments.

It’s all a bit conservative, I admit, but I don’t want my wife worrying about money, even if she should require long-term care, and I don’t want to create a financial burden for our children.

Want to make sure a surviving spouse has enough money? Here are five pointers:

  1. Plan on Social Security survivor benefits, but remember that—upon the death of the first spouse—your household’s total Social Security benefits could drop by a third or more.
  2. Ensure accumulated assets are sufficient for two lifetimes, and perhaps longer than the often-assumed 30-year retirement.
  3. When selecting pension coverage, choose the survivor option.
  4. For additional lifetime income, consider using part of your retirement nest egg to purchase an immediate annuity that pays income over both of your lifetimes.
  5. Purchase life insurance so the surviving spouse receives a lump sum upon the other spouse’s death.

Read more by Richard Quinn on HumbleDollar.

Source: After You Leave – HumbleDollar


  1. I agree that survivor benefits are not discussed in length in the planning process. I too went with a 75% survivor option because I didn’t believe that the 50% survivor option would cover the expenses of maintaining the house between utilities, property taxes, insurance, etc… There are no COLAs with my pension. Financial planners are quick to point out that spouses can collect part of the husbands social security but never say what happen when he dies. Another thing that is not really explained well is what happens when you go onto Medicare. If you get any help as part of your pension post-65 for supplement plans and does the spouse lose access to those supplements plans if you die? The information was provided to me but I had a hard time understanding it since I was still trying to figure out what I was going to get when I retired. Since I didn’t fully understand what I was going to get, I couldn’t comprehend losing something that I didn’t have. It took me about 3-4 months to feel secure once I started collecting my pension. It was a pay cut going onto a pension. It took that look to realize that everything was working out as planned and it was going to be ok.

    Each case and employer is different relating to spouses.

    The other thing to do is to look at your family history. Social Security is hoping that I died between 78-79 yrs and women are about 80-81 yrs. But I have many relatives who made it to their mid 90’s. I just have to assume that I will too. Lucky for us dementia does not run in our families which lessens the chance for needing years of long term care but even that is not a guarantee.


    1. Long term care is not death which is the topic, but should the need occur after the death of a spouse the items I listed would come into play, perhaps especially the accumulated assets.


  2. I agree with the above except for 4 and I consider 5 optional. I don’t care for annuities that will decline in value over time due to inflation and especially if one already has a pension. Besides, it takes too long to see any of the houses money with an annuity. An insurance policy is optional I suppose but if there is significant money in household accounts it is not needed, sort of a belt and suspenders thing.


    1. I suggest only a modest annuity for those who may not care to manage money. An immediate annuity can have COLAs most pensions don’t have COLAs. Mine hasn’t changed in 12 years. Insurance is tax efficient and be a good alternative to an J&S annuity.


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