For most of us, our lifestyles are usually built on multiple income streams.  We have the ability to afford the things we have today because we have the consistent monthly cashflow from our income streams.  When we retire, it's the exact same way.  The only difference is, our retirement incomes, if not structured properly, can potentially dissolve with the death of a spouse.  This includes social security, pensions, and annuities.

Social Security Spousal and Survivor Benefits

What Happens When My Spouse Dies?

Social Security

The simple truth is that when your spouse passes away, your Social Security benefit will be dramatically reduced. As the surviving spouse, you would continue to receive income equal to the larger of the two benefits you were receiving as a couple. However, this means your monthly income could be reduced by up to 50 percent.

Pensions

If your spouse has a pension, depending on the structure of the pension you may potentially lose all of it.  Some pensions offer a joint life benefit , but many times that option was not selected when the pension plan was initiated because the payout amount is drastically reduced when it covers both lives.

Retirement Accounts

With remaining assets in IRAs, 401ks, or similar accounts, these funds can be used to create an income stream to replace lost income, however it will still be exposed to market risk and the proper management of those funds, a task that many surviving spouses will not want to take on.

What are the alternatives?

When it comes to preserving your lifestyle in retirement, it all starts with having a retirement income plan built to withstand longevity and other financial risks.  We often work with retired couples who have built a lifestyle they are proud of and they also know that they are vulnerable when it comes to the potential of a spouse passing away.  In most cases, the concern is of the husband passing away, since statistics show that women have a longer lifespan than men.  One of the options to take a look at is preserving your assets in a fixed annuity with a lifetime income feature and spousal continuation benefit.  Doing this allows the assets to grow safely in a tax-deferred account free from market risk.  In addition, in the event of a death of a spouse, the annuity can be called upon to activate the lifetime income feature.  The lifetime income feature will guarantee a fixed or increasing payout every year for the life of the surviving spouse.  

Peace of mind

Having an annuity with a lifetime income feature and spousal continuation option is a proven method to take care of your spouse in the event of your passing.  Your spouse will not have to worry about changing their lifestyle drastically and won't have to worry about their future income being dictated by the markets.  Lastly, there's no better way to take care of your spouse after you're gone than by having all of your retirement essentials such as your home, cars, utilities, insurances, food, and other needs based expenses taken care of with this guaranteed lifetime income stream they'll never outlive.  This provides clarity, confidence, and peace of mind in their remaining years in retirement.