6 Essential Money Decisions All Retired Couples Have to Make


Easy Seniors Club presents: essential money decisions all retired couples have to make!

If you’re a couple who recently retired or intends to do so soon, you’re about to embark on an exciting new chapter in your life. Entering your golden years is going to be a wonderful period because now you have the time to enjoy all those things you’ve worked so hard for.

You can take a step back, travel whenever and wherever you want, relax all day, still work if you want and have the energy to, spend quality time with the people you love, and do all those things you didn’t have time for before.

While it might seem amazing to do these things, retiring can also come with uncertainty, and that’s because some of the choices you make today will have a significant impact on your quality of life down the road.

When approaching retirement age and making retirement plans, it’s important to think about the type of retirement you and your partner want. Things like traveling, being close to family, the right age to retire, or moving to another part of the country are important money decisions you have to make together.

These choices will impact the quality of your life, so don’t neglect them! We talked to financial experts about this topic, and they shared with us some of the most crucial money decisions a couple should make together before retiring. Let’s begin!

money decision
Photo by Robert Kneschke from shutterstock.com

1. Work after retirement

Here’s one of the most important money decisions to make when you think about retiring: do you want to completely leave the workforce, do you prefer to work part-time, or maybe even become a business owner?

Financial experts say that your earned income can have a huge impact on your social security benefits, and retirees need to take their time to think about their careers.

If you’re younger than your full retirement age and your earnings are over a specific amount, your Social Security benefits will be decreased. On the other hand, if you reach full retirement age, your benefits will be updated to account for the chunks withheld due to earlier earnings.

2. Apply for Social Security

Here’s another money decision that is important for all retirees: just because you want to leave the workforce doesn’t mean that you should file for Social Security benefits right away.

Financial experts say that there are many “claiming strategies” you can use. If you choose to take your retirement benefits early at age 62, the monthly payout is decreased to 71.5% of the total retirement amount.

The thing with the Social Security benefits is that they work in both ways: if you claim them early, you’ll get reduced benefits, but if you claim them later, your benefits will increase by almost 8% per year. Sources say that most consumers start receiving benefits after they turn 70 years old.

Since people are living longer and many of them are looking at a 30-plus-year retirement, you should carefully consider your options when it comes time to apply for Social Security. Moreover, the amount you receive extra or not is going to make a huge difference in your financial situation, so take your time with this money decision.

Financial planners say that married couples need to think about many other aspects besides their age. For instance, instead of receiving their benefits, lower-earning spouses can find it more advantageous to claim spousal Social Security payments.

Just as with personal benefits, it is also better to wait until full retirement age to file for benefits because the monthly payments will be higher for couples with lower incomes.

The survivor benefit is another thing married couples should think about. If the higher earner anticipates their spouse will live longer than they will, they might want to hold off on claiming Social Security until they reach full retirement age, or even age 70, to maximize the survivor’s benefit.

Keep reading to discover all the money decisions retired couples should make ASAP!

money decision
Photo by fizkes from shutterstock.com

3. Have a plan

Even though Social Security and 401(k) plans can be valuable assets in a retirement plan, financial experts say that people shouldn’t rely only on them as their primary source of retirement income.

If you only have one source of income in your golden years, you might find it difficult to effectively use your savings to generate money. The more, the merrier, so thinking and talking about how you will deal with finances is an important money decision for all retired couples.

For example, a wonderful strategy might include a guaranteed income source, like a pension or annuity, post-tax savings vehicles, such as Roth accounts, and tax-deferred retirement accounts, like an IRA.

You can also think about whole life insurance, as it can increase in value without being impacted by market fluctuations and offer a lifetime death benefit that will safeguard your family while you’re working.

If you have the time and the willingness to try new things, think about non-qualified investments. They’re flexible and might help you estimate your financial gains before retirement.

Psst: Here are some cute coffee mugs that will make your morning rituals a lot nicer (for both of you)!

4. Plan for your healthcare

Good health is important at any age, and if both you and your partner feel amazing, that’s great news, but this might not always be the case, and you have to be prepared.

Sources say that 20 years following retirement, or about from age 65 to 85, is when health care expenses usually peak around $250,000 per couple. A quarter of a million dollars is a lot of money, and not everybody is ready for big expenses like this.

Preparation is key to everything, especially when you want to live your life to the fullest and not be threatened by a lack of money for your basic and important needs, like your health. This is a money decision that’s important for the rest of your life, so the smartest option here is to think about these costs and set money aside.

You might not like what I’m about to tell you next, but this is a very important money decision: think about a nursing home, because you can never know what the future brings.

Again, this is based on statistics, and research says that when one of the spouses lives longer than the other, they’re more likely to end up in a nursing home.

Unfortunately, nursing homes come with high expenses, between $5,000 and $10,000 per month, so the possibility of going to one is a money decision you should make together as a couple.

One way to be prepared for something like this is to start saving right away. Another thing you could do is to get long-term care insurance ASAP.

If not, there might be a need for some special Title XIX planning. However, this is a crucial money decision or discussion that many people put off for too long, which will result in a harder time in the long run.

Which one of these money decisions do you think is the most important one for retired couples?

money decision
Photo by Inside Creative House from shutterstock.com

5. Complete your estate plan

You surely have some estate planning documents, like health directives, wills, or power of attorney documents. There are many money decisions retired couples need to make so they can have an easier and happier life, and this one is no exception.

Experts say that you and your partner should review those records ASAP to see if you need to make any changes or revisions, based on the following information: a potentially changed tax situation, law changes that could impact you, the relationship between you and the people named in the document (including whether they’re alive or not), and potential updates on beneficiary designations.

Deal with these problems as soon as you can, because your golden years are a perfect period to put your documents together, and knowing you have everything ready is an amazing feeling.

What was the hardest money decision you’ve ever had to make?

6. The place you’ll live in

When it comes to the place where retirees will spend their golden years, the majority of them choose to remain in the home they raised their children in. That’s because it holds onto so many amazing memories and feelings that are quite hard to let go of.

However, when you retire, you might pay for more things than you need, such as monthly HOA fees, property taxes based on a giant house, and maintenance.

If you want to save or invest some money, you can think about downsizing. Some experts also suggest renting a place that fits your needs and putting all the extra money in the bank.

If you think about moving to a different house, choose one that is one story so that you have easier access. Again, you might not be a fan of what I’m about to say here, but another money decision that’s important for couples is the possibility of having a caretaker in the future.

This is crucial in case of an accident or illness, so think about all the costs that might appear along the way and start planning for them. I guarantee you’ll be safer and have more peace of mind by doing so.

Do you know any other money decisions that are important for retired couples? Leave them in the comments. If you’d like to read something else from Easy Seniors Club, here’s another great article for you: The Price of Paradise: 7 Expenses Pushing Florida Retirees to Pack Up

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like