A 74-year-old man is concerned about his wife’s financial future after he passes away. The couple’s monthly expenses are $4,500, covered by his $7,200 monthly disability and Social Security income. Once he dies, his retirement income will cease, leaving his wife with only $1,500 monthly and a $100,000 life insurance payout. He currently has $5,000 in savings.
The Current Financial Situation
The man’s current income exceeds their monthly expenses, but his wife’s financial situation will change significantly after his passing. Financial experts suggest that the couple should focus on saving and investing to ensure her financial security.
Expert Advice
Certified financial planner Alonso Rodriguez Segarra recommends continuing to increase their savings, even if it’s done gradually, to build a better emergency fund. Jen Grant, another certified financial planner, suggests saving the difference between their current income and expenses through automatic monthly contributions into an investment account. This strategy will help the wife be in a better financial position if he passes away.
Additional Considerations
The wife may be eligible for a survivor benefit equal to her husband’s Social Security income after he passes away. She can also receive up to 50% of his full Social Security Disability Insurance while he’s alive if she’s at least 62 or caring for a disabled child. Generating additional income, even part-time, could also help improve their financial situation.
Seeking Professional Help
The couple is advised to consult a financial adviser to create a personalized plan. They can contact the Financial Planning Association for help finding planners who offer pro bono support. Alternatively, they may consider working with an accredited financial counselor who specializes in financial behavior and debt management.
Key Takeaways
- Continue saving and investing to build an emergency fund
- Explore survivor benefits and other Social Security entitlements
- Consider generating additional income
- Seek professional financial advice for a tailored plan
By taking these steps, the couple can work towards ensuring the wife’s financial security after the husband’s passing.
