Expert Commentary

I can tell when a husband loves his wife when we plan with our clients

Yesterday posted about how women live longer and how this needs to be incorporated into a Social Security and withdrawal strategy.

This week, Boston College’s Security Project re-posted some good research from 2005 about how women “irrationally” claim their Social Security benefits, see attachement.

We have written about this too. What I want to reflect to you is the behavior and qualitative aspects I observe in practice. Recently, I had a married women contact me for help. It was clear that she should claim early and her husband should delay his benefits to earn the 8% credits or 32% more by age 70. She would then receive his higher benefits after he passes away in survivor benefits. The numbers were huge…over $100,000 to do the strategy we recommended. However, the husband did not want to do it. We had 3 meetings. Each time I represented the numbers and the reasons. The woman was concerned because they did not have much savings. They had high salaries and a business now, but did not save a lot over the last 20 years. The husband did not want to continue working and thought he would not live a long life. Again, a “no brainer” decision on what they should do if BOTH people are taken into account.

So, what happened? It became obvious that the husband was more focused on his well being versus the security of his wife once he passed away. He did not want to work. Did not want the stress related to delaying his benefits and drawing down of their savings. Our last meeting was awkward. For me, sad. I don’t think the husband loved his wife…if he did, the strategy to take care of her after he was gone was crystal clear.

So, run your numbers. See the outcomes and scenarios to make your personal decision. You will be surprised with the huge financial difference your decisions will make over time. If you make good decisions, you have more money. End of Story!!

Retirement planning is complicated and you can’t make up the different if you make a mistake. Find an expert to help you.

http://crr.bc.edu/wp-content/uploads/2006/10/ib_35.pdf