Express Your Love This Valentine’s Day With Sound Financial Planning For Your Loved One

Maximize Social Security Benefits

The best time to claim Social Security is even more critical for married couples. Each year you delay Social Security beyond full retirement age (FRA) your benefit increase by 8%. If the higher earner delays Social Security beyond their (FRA), not only will he/she continue to build credits, for his own Social Security but will also build credits for the survivor.

When one spouse passes away the survivor receives the higher of his or her own benefit or the benefit of the deceased. This is an incredibly important concept when making election decisions, because claiming early not only reduces your own benefit, but also the benefit paid to your survivor. With longer life expectancies than men, this is especially important to women.

Plan for Your Healthcare

While caring for a spouse that has a cold and cough may allow you to shower him with affection with chicken soup and fluffed pillows, a long-term health need will most likely cause you to feel completely overwhelmed. Think of the tension that caring for someone continuously, if you can even do it physically, would be on you, and possibly your children and grandchildren. Imagine having an expense that could wipe out all of your savings, and there was a 70% [i] chance that this could happen to you or your spouse.

Well this is not imaginary it’s the cold hard facts! Traditional health insurance will not pay for long-term care, and in most instances Medicare will not pay for care. Unless you are ultra-wealthy and can afford a healthcare expense of $70,000 plus a year, you need to find a way to plan for a long-term care need well ahead of time. Traditional long-term care insurance plans are typically what we think of when we hear long-term care plan, which is why many people shy away from planning.

The number one complaint I hear is that these plans are expensive and if I have a heart attack in my sleep and never need long-term care, I will have turned over tens of thousands of dollars to an insurance company. There are also many types of hybrid life – long-term care plans, which insure that if you don’t use the long-term care component, it will pay out to a beneficiary when you pass, and some plans allow you a quit provision and will refund your money if you change your mind and no longer want the plan.

Spousal Planning Tips

If you are married you need to plan for retirement as a couple, but also for the surviving spouse. Chances are that you and your spouse will not die at the same time so make sure you plan for the surviving spouse. The loss of a spouse can bring unrelenting heartbreak, but don’t add on to the stress by leaving a spouse with financial worries such as settling an estate, shortness of income, understanding investments, and endless financial concerns.

There is usually one spouse that gravitates to the couple’s money issues and investments, which is okay, but both partners need to be on board with the knowledge of their financial plan. In addition knowing where important documents are kept as well as instructions on how to contact financial advisors and institutions, Social Security, pension plans, insurance companies and attorneys is a must.

When planning for your future make sure to include any loss of income that would occur if your spouse predeceased you from sources such as Social Security, pension, annuity, business entity, or other. Will that loss of income result in you not being able to maintain your lifestyle? Do this exercise for both of you. If there is a shortage, make sure you make adjustments in your financial planning to correct the shortage by purchasing life insurance, gaining knowledge on your pension options if any, reducing expenses, downsizing or working longer.

Sources: http://online.wsj.com/ad/article/longtermcare-future