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Old 01-02-2014, 12:41 PM   #21
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I believe the numbers, but I don't see the relevance of this example for my retirement planning.
I understand.

I posted because this thread isn't just about your retirement planning. The net income changes resulting from death of a spouse can vary significantly depending on income levels and the source of the income. My example was posted to help illustrate this fact.
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Old 01-02-2014, 03:20 PM   #22
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Here is one example from my calcs using TurboTax. This assumes that everything is in an IRA and MRDs are required and one of us dies at 72, compared to the same situation but we are both alive at 72: The survivor is hit with about $23k less income, other things being equal. This is a 52% reduction in income in this case.

Now you can see why, as a strategy, I want to convert my IRA 100% to a Roth before RMDs start, regardless of the marginal rate.

I wish I had looked into this long ago. My thanks to board members who prodded me to run the numbers.

By the way, an ADD life insurance policy is almost worthless. Get term life.
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Old 01-02-2014, 03:41 PM   #23
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The surviving spouse is going to be hit with a higher taxes simply by filing single, but I would expect they may also have much higher RMD's being taxed at a higher marginal rate then when they MFJ, assuming their spouse left IRA's to them. This is another reason for doing ROTH conversions.
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Old 01-02-2014, 06:40 PM   #24
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He is not permitted to die first.

I am setting it up so he has SS and medicare and health insurance and will inherit any cash left behind, and I have a small life insurance policy. His death would barely affect my income but I would have to move to assisted living or near/with a friend.
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Old 01-02-2014, 08:37 PM   #25
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She will be much better off financially without me.
This is a situation that should be avoided if possible.
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