Retirement Planning’s Impact to Spouses, Progeny and Charities

Thorough Planning Extends Beyond Both Spouses

Despite the many threats to retirement assets – market volatility, emergencies and depletion, to name a few – retirees may not exhaust their nest egg. Thorough retirement planning includes “family transfer” and considerations that accommodate spouses, children, and charities.

The motivation for such provisions is usually a desire to take care of one’s spouse. But once accomplished, legacy planning can be impactful for generations to come. However, without discussion or guidance, the surviving spouse may be unaware of impacts to income, taxes and health insurance. Social Security - a cruise control component of monthly income by way of direct deposit – reduces at the first death. Adjusted gross income, the basis of taxes, can increase due to a lost personal exemption of the deceased partner. Ripple effects could increase Medicare cost, as premiums are means tested.

The economic leverage of life insurance and its potential tax advantages can multiple assets to targeted family beneficiaries and charities. In recent years, generational planning has evolved into four generations planning strategies based on ever-increasing longevity. If it is a reasonable expectation that seeing your great grandchildren could become a fact of life, then planning for 100 years may not be science fiction anymore 

An additional option is for the originator to make a conservative annuity allocation of several years’ duration that exceeds CD and money market rates and includes market upside potential and protection against loss.

While death is certain and generally occurs in retirement., it’s rarely ever known in advance. Accordingly, any retirement plan should not be considered complete until family transfer considerations are addressed or specified.