LateToFIRE
Thinks s/he gets paid by the post
- Joined
- Jun 4, 2023
- Messages
- 1,171
Morbid but important topic - how have couples planned for the possibility one of you passes away too early. I'm sure there is a wealth of experience here.
As I anticipate FIRE, I'm realizing this risk is not something I've given enough thought to. In my working years I've generally compensated by carrying large amounts of life and disability insurance on myself as the primary breadwinner. That gave me a measure of comfort DW would be financially ok without me. But was planning to cancel all of it in retirement (now rethinking).
There are a number of issues I need to think thru:
1) Problem of widow(er) forced to take RMD's while being pushed into a significantly higher tax bracket as a result of becoming a single-tax-filer.
2) Loss of income due to SS/pension hit. In our case, could be quite significant. If we both live into our 90's, there's about $3M of combined SS/pension benefits we'd receive. If I get hit by the proverbial bus in my "prime" FIRE years, that's about a $1.3M loss of benefits (even assuming DW's SS benefit is stepped up to mine).
3) Estate planning, titling/beneficiary designations on bank/investment accounts, real estate, etc. - this seems like the easy stuff if legally married, more complex if not. We have more attorneys than you can shake a stick at, so well covered here.
4) Figuring out who to assign POA's, healthcare proxies, etc, basically who will oversee finances and healthcare as spouse ages (especially relevant if you don't have children). Who do you trust? I've seen some really bad behavior on this issue.
Anyhow, these are a few things that came to mind. How are you all thinking about this issue? What have you observed and experienced? What am I leaving out?
As I anticipate FIRE, I'm realizing this risk is not something I've given enough thought to. In my working years I've generally compensated by carrying large amounts of life and disability insurance on myself as the primary breadwinner. That gave me a measure of comfort DW would be financially ok without me. But was planning to cancel all of it in retirement (now rethinking).
There are a number of issues I need to think thru:
1) Problem of widow(er) forced to take RMD's while being pushed into a significantly higher tax bracket as a result of becoming a single-tax-filer.
2) Loss of income due to SS/pension hit. In our case, could be quite significant. If we both live into our 90's, there's about $3M of combined SS/pension benefits we'd receive. If I get hit by the proverbial bus in my "prime" FIRE years, that's about a $1.3M loss of benefits (even assuming DW's SS benefit is stepped up to mine).
3) Estate planning, titling/beneficiary designations on bank/investment accounts, real estate, etc. - this seems like the easy stuff if legally married, more complex if not. We have more attorneys than you can shake a stick at, so well covered here.
4) Figuring out who to assign POA's, healthcare proxies, etc, basically who will oversee finances and healthcare as spouse ages (especially relevant if you don't have children). Who do you trust? I've seen some really bad behavior on this issue.
Anyhow, these are a few things that came to mind. How are you all thinking about this issue? What have you observed and experienced? What am I leaving out?