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Old 08-22-2021, 12:00 PM   #41
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If we can't stay in our home due to one of us needing LTC, the house will be sold and the able person would not want to maintain it by themselves anyway. The spouse would secure an apartment near the care facility.
It all sounds so cut and dried, but we are being practical about it.
We are opting for 75% survivor on the pension, but are maxing out one SS for the surviving spouse.
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Old 08-22-2021, 12:13 PM   #42
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I modeled the situation when deciding what level of pension J&S benefit I should take. 75% worked out as the best combination for money now and leaving enough for DW if I die first. If she dies first my pension gets restored to the 100% survivor level.

It is also a reason why my current plan is to delay SS to maximize the survivor benefit. Currently, at 65.5 years my SS survivor benefit + my pension would cover her regular expenses and still leave a lot in savings/investments for "extravagant" spending. But unless there is a true need to take them, I'll delay until sometime after that.
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Old 08-22-2021, 12:23 PM   #43
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^Pretty much our situation, a few years down the road.
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Old 08-22-2021, 12:51 PM   #44
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No, money will not an the issue.

What I did do is arrange our affairs and consolidate investments so that it would be very easy for her to step in and move forward should I fall off my perch.
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Old 08-22-2021, 01:04 PM   #45
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I'm glad that regulations in most (all?) states require that waiver now. I filed for a pension in my name when DH was in his last months and we had a notary come to the house so he could sign off on the version with no survivor benefit.
We selected the 10 year and continuous Pension which if I pass she gets it until age 70 and then SS will come in to play. Even without SS or at a reduced level she would still be fine according to my model

She did sign a waiver. I went through all the math as the default is 50% survivor. She felt based on my family history of living long that would be leaving money on the table. I wasn't comfortable going with 100% no survivor so we compromised.
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Old 08-22-2021, 01:06 PM   #46
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Yes. We started killing off DH in modeling a few yrs before he retired.
This cracked me up

I told DH if he goes at 66 I will be pissed. SBLI ends at 65.
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Old 08-22-2021, 01:17 PM   #47
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If my wife does not sign, there is a default 50% survivor benefit minimum. If she signed away her interest, she would still get to draw the first 5 years of it if I left the scene. She can purchase the retiree medical indefinitely and use that for an expensive but excellent medicare supplement after she is eligible, or go on the market.
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Old 08-22-2021, 01:43 PM   #48
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We never did any modeling before DH died at 55 four years ago, but many times we mentioned that one of the benefits of still being in the house we bought in 1995 was that the small mortgage would allow "us" to stay in the house even on one income. And it has turned out to be correct.

My living expenses are covered by my income and a very small pension that our employer was helpful enough to have him file for "early retirement" with 100% joint and survivor, so that when he died, the paperwork for the planned "retirement" was already in place.

But with most of the travel and fancy meals and high living not happening, I suppose it's technically a lower standard of living, so if I were a widow who would have wanted to keep doing all of that I would be dipping much more into the savings that were his and mine and are now mine.

In fact, I need to up my Dough Blowing.

I have been most "grateful" that I have not had to move, or watch my spending. Losing a spouse is terrible enough--I can only imagine the anger at losing your level of living as well. (Compounded by 1000% if it could have been avoided by some prior planning.)
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Old 08-22-2021, 01:58 PM   #49
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I suppose most of your travel is currently to the timeshare(s).

But I think $20K to $5K travel change is pretty drastic, as I've noticed traveling single is about 75% of the cost of traveling as a couple.

Example, hotel rooms charge practically the same. Cruise ships charge about 75% of the cost. Taxi etc are the same price or 96% the same price when flat rate.

I do like your analysis of the changing situation.
I would think cost of household repairs would dramatically increase for any non-handy spouse left alive as usually 1 spouse is handy at fixing things.
The cost of hiring a handyman for simple stuff easily adds $100 or more to any simple chore.

Example: clean out gutters will cost $125->$150 , currently I do it free.
Mow grass, I often do it free, costs $600->$700 per season.

Of course if nobody is handy, then the cost would remain the same, its a very situational thing.
In addiiton to timesharing, we did (mainly) international cruising for about 4 years after we retired, and our travel expenses ran about $40K per year during those years. With COVID, we have decided we are pretty much done with cruises. We timeshare and always golf and dine at our favorite restaurants. If one of us is gone, I don't think either of us have the desire to travel alone. Traveling alone is no fun for us. The $5K will cover my traveling to see my son and maybe have some trips with him. I have gazillion points in my United and Marriott accounts from years of business traveling, credit card spending and timeshare point conversion. When we do stay at hotels, they are usually free. We also fly first class using points, otherwise we don't fly.

My husband is not handy at all and neither am I so we pay for maintenance folks to do the yard, pool, HVAC filter cleaning/maintenance, soft water company to check the system once a year.
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Old 08-22-2021, 02:11 PM   #50
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It makes a lot of sense to use a tool like FIRECalc to model or project the impact of one spouse passing. If pensions represent significant percent of total income this modeling is more important and is critical when Social Security is the primary income source. As pointed out earlier, tax rates are also higher when filing as a single adult.

Those of us with mostly portfolio based income have less need to model. In fact, the same portfolio with just one spouse reduces the financial risk of running out of money and increases the likelihood of more money left for heirs. Please donít tell DW or the kids, one of my rules has always been to avoid situations where others benefit from my early demise.

One thing not mentioned yet in this thread but also related to surviving spouses is portfolio management. Many of us manage the nest egg and have spouses not really interested in learning to do so. In that case it makes sense to leave some kind of instruction or suggestion on how the portfolio should be invested and used to fund ongoing expenses.
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Old 08-22-2021, 02:30 PM   #51
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Please donít tell DW or the kids, one of my rules has always been to avoid situations where others benefit from my early demise.

.
This is why my sibling, who is the heir to most of my estate, is not the sole holder of my health care PoA. I have a few friends named as well, so that can stand astride any unnecessary plug-pulling! (I'm kidding. Mostly.)
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Old 08-22-2021, 02:35 PM   #52
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My wife and I have planned for it since my military pension would be reduced by 45% for her and my tax free VA disability payment will end when I die.

We are living comfortably FIREd on the above incomes and not touching our investments yet. I have a $800,000 term life policy that is set to renew in 5 years. Depending on how our nest egg appreciates between now and then we may not bother renewing it and self-insure instead.

So, if I go in the next five years, the life insurance will basically make up the difference in my pension/disability and if it is past that point, our nest egg will most likely be high enough to easily make up the difference.
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Old 08-22-2021, 02:38 PM   #53
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This is why my sibling, who is the heir to most of my estate, is not the sole holder of my health care PoA. I have a few friends naked as well, so that can stand astride any unnecessary plug-pulling! (I'm kidding. Mostly.)
All my favorite friends are naked.
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Old 08-22-2021, 02:45 PM   #54
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I have been most "grateful" that I have not had to move, or watch my spending. Losing a spouse is terrible enough--I can only imagine the anger at losing your level of living as well. (Compounded by 1000% if it could have been avoided by some prior planning.)
I worry about a friend of mine- her husband has been less than transparent about finances (won't tell her what he does with the interest on their bonds, has a credit card he uses for his hobbies such as gardening, where he buys the best of everything and won't tell her the balance). He had a health scare and decided to retire and that the only way to do it was for both of them to file for SS even though she was only 62 and still working PT.

So- her benefit is permanently reduced and if he dies first her survivor benefit is permanently reduced because he was the higher earner and he filed before FRA.

I really don't like her husband.
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Old 08-22-2021, 02:52 PM   #55
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All my favorite friends are naked.
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Old 08-22-2021, 02:58 PM   #56
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One thing not mentioned yet in this thread but also related to surviving spouses is portfolio management. Many of us manage the nest egg and have spouses not really interested in learning to do so. In that case it makes sense to leave some kind of instruction or suggestion on how the portfolio should be invested and used to fund ongoing expenses.
Separate issue but super important for sure.
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Old 08-22-2021, 02:59 PM   #57
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I worry about a friend of mine- her husband has been less than transparent about finances (won't tell her what he does with the interest on their bonds, has a credit card he uses for his hobbies such as gardening, where he buys the best of everything and won't tell her the balance). He had a health scare and decided to retire and that the only way to do it was for both of them to file for SS even though she was only 62 and still working PT.

So- her benefit is permanently reduced and if he dies first her survivor benefit is permanently reduced because he was the higher earner and he filed before FRA.

I really don't like her husband.
It goes back to the importance of equal partnership in a relationship. My ex-husband and I kept everything separate and didn't bother with how the other was doing financially. We both wished we had done it differently. We grow up and we learn and in our case it was a little late.

My husband from day 1 insisted that every decision is joint 50-50, financial or otherwise, and we share everything roughly 50-50. We would "help" one another if necessary. It makes a world of difference.
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Old 08-22-2021, 03:03 PM   #58
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Separate issue but super important for sure.
I am going for the KISS method there. We have assets all over and my plan is to get it all streamlined by the time we get all the roths done. Just the roth conversions alone will simplify things.
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Old 08-22-2021, 03:07 PM   #59
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It goes back to the importance of equal partnership in a relationship. My ex-husband and I kept everything separate and didn't bother with how the other was doing financially. We both wished we had done it differently.

My husband from day 1 insisted that every decision is joint 50-50, financial or otherwise, and we share everything roughly 50-50. We would "help" one another if necessary. It makes a world of difference.
Not that I necessarily disagree, but I was thinking about this the other day. DH and I used the yours/mine/ours setup, where we direct deposited into the joint account the money needed for all joint expenses (including travel, food, entertainment, household, etc). As long as the joint expenses were covered (and we both maxed out 401ks) the rest of our paychecks were ours to do with as we wished.

So, when he died, my mental accounting really only "lost" his contribution to the joint account, which his pension at least replaces a small amount of. I received his 401k, of course, and we had yours/mine/ours brokerage accounts that were in both of our names even though they "belonged" to one of us so that we both knew what was in them (and so they would pass without trouble when one of us died), but that "yours" money never really existed to me.

This requires openness and trust and also, to be honest, similar salary levels. But this is a whole other discussion!
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Old 08-22-2021, 03:16 PM   #60
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If my wife were to pre-decease me, I think I'd be just fine. I'm more concerned with me going first, which is also statistically more likely.

I'm curious to hear how you all factor that in.
This is a concern of mine due to the following:

- the SBP on my pension is worth about 35% of my full pension
- she would be left with only one SS
- the single tax brackets are half those of MFJ
- she would likely be hit with IRMAA on her Medicare
- her expenses would increase for the handyman stuff I do
- etc.

So, yes, I have modeled this on an Excel spreadsheet to satisfy myself (and her) that she will be left with adequate income. Iíve also written up instructions about how she should access our assets in the most tax advantageous way.
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