Please help me. I am a 68 year old woman who has been married for 17 years and is the love of my life. Our finances have always been separate, and I signed a prenuptial agreement acknowledging that her son would inherit his assets held in a living trust (about $3 million). I get our house, and he’s leaving me $350,000 in his will.
The husband took a lump-sum Social Security payment before we met. We have always been debt free, and I have a great 2020 vehicle. While I live a modest lifestyle, his health has prevented us from enjoying the holiday for eight years. I look forward to traveling more in the future. My husband is seriously ill and is likely to live only a year or two. His medical bills are not my responsibility.
In 2019, we built a new house. Although its exact value is unknown, I will probably steer clear of $800,000 for this property, in the hopes that I will buy a smaller house upon his passing.
I get Social Security and a pension, and now I collect about $20,000 a year. I have been an aspiring saver and have now reached around $350,000 to make decent money on my mutual funds. The other stock is worth about $20,000 and I have 457 accounts worth $65,000. I currently have $60,000 in savings and $20,000 in checking.
I haven’t pulled a penny out of my investments, and doubt much will change that will be needed unless I’m alone. My husband now bears our living expenses. My goal is to enjoy the rest of my life, leaving as much money as possible for my four siblings.
Sounds great to me, but I’ve been risking holding my savings in stocks to earn an annual real return of over 15% over the past decade. and i don’t have Long term care insurance.
Can I expect to live my life in good financial health?
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I am very sorry to hear about your husband’s illness. It is such a difficult experience to live through. I am glad to see that you are planning your finances after his passing – which will save you heartbreak as well as a lot of headaches, and give you stability and security in your old age.
To reach your answer, you need to do some serious analysis of your current and expected future expenses. However, keep in mind, anything can change in a few years or even a year from now, so be flexible when you set out your finances for the future.
First, develop a plan (some might call it a budget), said Robert Gilliland, managing director and senior wealth advisor at Concenture Wealth Management. Take into account each and every possible expense you may incur after the death of your spouse and account for inflation. You can divide these expenses into short term, such as one to five years, intermediate term, which will mark six to 10 years, and long term, or more than 10 years. Include your estimated housing expenses, and perhaps plan whether you live in your current home or find something smaller. Also think about health care, which is a big expense in any retiree’s budget, utilities, emergency expenses, occasional meals or entertainment, etc.
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After completing this analysis, see what are your expected sources of income. You mentioned Social Security and pension, and you can make regular withdrawals from your investments. Compare your income with your expenses. “Once you have that number you can determine what the ‘reasonable’ withdrawal rate is on the property to determine the additional funds available for travel,” Gilliland said.
A note about your investments: Advisors use this bucket approach with investing, in which case it is common to see intermediate and long term needs invested with higher risk. You mention that your savings are taking on too much risk right now, and that you should consider talking to a financial advisor — even where your money is kept — to see if it’s worth your money. Correct asset allocation. If you are living on a fixed income, you cannot afford to lose too much in your portfolio. Diversification and proper allocation will be the key to your success. “At the end of the day, being able to ensure that funds will be available to meet his needs should be of paramount importance,” Gilliland said.
Also, reach out to the Social Security Administration’s Office of Planning Start to see what other potential benefits you may be eligible for, such as widow’s benefit, said Jude Boudreaux, a certified financial planner and partner at The Planning Center. This could result in even more money each month, depending on whether your survivor benefit exceeds your personal benefit, and it doesn’t hurt to start figuring out the benefits or numbers now. You could be on hold with the Social Security Administration for hours when you call, but it will be worth it. here is more information survivor benefit from SSA.
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You mentioned that you do not have long-term care insurance. This can get pretty expensive, especially since you’re a little older than the typical “ideal” candidate (consultants often suggest that people start looking for long-term care insurance in their 50s). It may be worthwhile for you, so it doesn’t hurt to look at some policies, but know that there are other options for you, such as hybrid policies that can provide you with long-term care and a potential death benefit for your sibling. . Some annuities also have long-term care riders, though you should check out these products thoroughly before jumping in. Here is a comprehensive guide on long-term care insurance for you.
This isn’t financial advice, but it’s still important – be proactive and take your health seriously. Take long walks, try to maintain a healthy diet and stay in touch with loved ones – now and after your husband’s death. These small daily activities create a different world for one’s older years.
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Here are some other suggestions. Gilliland said he always recommends taking a year before deciding whether to move on after losing a spouse, because those times are very emotional and people can make decisions they eventually regret. Is.
You might want to start doing some calculations now and talk to your husband for his input. You mentioned premarital contracts, but they don’t prevent someone from giving gifts to their spouse during the marriage. If the trust you’re talking about is an inter vivo, or revocable, trust, your spouse can gift you some money while he’s still alive. Of course, this may sound like a sticky situation and this suggestion is in no way meant to stir up any drama between you and your husband and their son, but it doesn’t hurt to ask your husband that. What did he think, Boudreaux said. “It’s worth exploring.”
Ultimately, you find that you are being very honest about your finances, and this will certainly help you later. Just try to think of everything possible that you’ll need, financially and otherwise, so that you don’t feel left out when your husband passes away. And make sure you and he have several conversations about what he thinks you should know after he’s gone — anything from bank account passwords to little tasks he normally does at home. can handle around.
I wish you the best of luck.
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