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Retirement Planning for Couples With an Age Gap

Posted by David Ghiorso, CPA, July 18, 2018

All couples face a number of decisions while making their retirement plans. However, if your marriage is one where there is a significant age gap between you and your spouse, then you might face a few additional challenges. It’s less likely that you will both retire at the same time, so we recommend that you take a closer look at these three planning issues.

When to claim Social Security. If the older spouse is the also the higher-earning half of the couple, proceed with your Social Security claim carefully. This is of particular importance if your spouse is a homemaker or otherwise won’t qualify for their own Social Security benefit.

The younger spouse is likely to outlive the older, often by many years, and that means depending upon survivor benefits or their spousal benefit (which is roughly half of the higher earning spouse’s benefit). If the higher-earning spouse claims Social Security too early, these other benefits will be lower.

Planning for long-term care. One might assume that within a May-December couple, the younger spouse will one day provide long-term care for the older spouse in the event that it is needed. This isn’t a terribly irrational idea, of course, but keep in mind that nursing care might be needed around the clock, or very specialized care (beyond the skill level of the spouse) might be necessary.

Also, if the younger spouse outlives the older, you still have to plan for their long-term care needs. With 70 percent of all retirees needing specialized nursing care at some point in their lifetimes, everyone should plan for this expense rather than hope it won’t occur. So, you must plan for both the older and younger spouse’s care, regardless of your ages.

Providing health insurance for the younger spouse. Assuming the older spouse waits until age 65 or later to retire, they will be able to rely upon Medicare for health insurance. But what about the younger spouse? If they don’t have health insurance through work, purchasing a policy through an insurance broker or on the state exchange will probably be necessary.

If you have questions about these matters, we can offer some assistance. If your situation is a bit different from the norm, give us a call and we can help you pinpoint the solutions that can support your retirement goals.

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