Marriage impacts the financial and medical health of retirees
Married people lead overwhelmingly healthier lives than their single counterparts. Studies have shown they have 50 percent less risk of Alzheimer’s than their single counterparts, are three times more likely to survive heart surgery, are less likely to get the flu, and more likely to survive cancer. The poverty rate for seniors rises from 4.6 percent for married couples to 13.5 percent for widows and widowers but is at almost 20 percent for those who never married. Other benefits for being married include that married couples often prevent or at least hold off the need for outside assistance when one or both begin to experience disability. While the health benefits are numerous for married individuals, they also experience healthier retirement benefits, which is good because they’ll need those better retirement benefits since on average they live 5 years longer than single people.
Here is a list of ways that being married benefits you in retirement that was put together by US News.
Social Security: There are a lot of Social Security claiming options for married couples, or divorced or widowed individuals. Those that have been married have their choice of a variety of strategies to maximize their benefits. If you are single, your options are essentially limited to claiming early, claiming at full retirement age or claiming at 70.
Fewer couples are choosing to use spousal benefits (down to 9 percent in 2011 from a high of 62 percent in 1960) thanks to the fact that most women can now claim higher benefits from their own worker benefit than they can from their spouse’s benefit. Still, it may be beneficial to look to that option so I recommend you either request our white paper on Social Security benefits or you set up an appointment with Julie Price to look at your Social Security options.
Traditional pension: Married couples have the option to opt for a spousal benefit. This may have been more important a decade or so ago but the number of individuals that work for companies offering pension plans has dropped from about 40 percent in the early 90s to only about 22 percent in 2012. Of those individuals that have a pension, more than a third of them choose not to provide payments to a surviving spouse.
401(k)s: If both parties in a marriage work for companies that match their 401(k) contributions, the additional contributions can really add up. Spouses also have the option of choosing to focus their efforts on the employer matches that are better.
IRAs: Investors who don’t have a workplace retirement benefit but are married to someone who does can still claim tax deductions for their IRA. Surviving spouses can inherit an IRA and roll it over into their own account and wait to begin minimum distributions until age 70 1/2, an option not available to other beneficiaries.
If all this moves you to consider remarrying, I’d like to caution you that any second marriage considerations should include a talk with an Elder Law Attorney. Please read our white paper of Second Marriages first. Contact us at firstname.lastname@example.org.