Newport Beach Estate Planning Attorney Shares Retirement Strategies for Couples With Significant Age GapsMarch 20, 2012 8:26 pm Retirement Planning
A recent Forbes article noted that couples with significant age gaps – 10 years or more – need to understand and employ different retirement planning strategies that may benefit them specifically because of their age difference. These include:
Taking advantage of qualified retirement plans – if you have a 401(k), IRA or other qualified retirement plan, you will be required to take minimum distributions at age 70 ½. Those with spouses who are younger by 10 years or more can take a smaller distribution, which reduces their taxable income.
Deferring Social Security benefits – couples with significant age gaps should defer Social Security for the older spouse as long as possible, which will allow the younger spouse to collect spousal or survivor benefits longer and provide larger payments.
Maximizing pensions – the older spouse elects the single life pension option and the couple uses the extra income to fund a life insurance policy on the older spouse that the younger spouse will use later to fund his or her retirement.
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