Kerri Anne Renzulli at AARP wrote about retirement planning for couples with a large age gap, and quoted me on the decision I think matters most.
For May-December couples, the same nest egg has to support very different retirement dates and life expectancies. One of the biggest levers is when the older spouse claims Social Security. Claiming at 62 pays about 30% less than waiting until full retirement age of 67, and the benefit grows by roughly 8% for each year you delay until 70, building a larger base of inflation-protected income. Once the older spouse dies, the younger spouse can claim a survivor benefit equal to the deceased's full payment, provided it is higher than their own.
That is why I told AARP the survivor benefit could be the younger spouse's primary income source for potentially a long stretch, and getting that number as high as it can go is often the most important decision in the whole retirement plan.
The article also covers why the younger spouse retiring early can backfire through lost savings years, a smaller Social Security benefit and the cost of buying health insurance before Medicare, the alternative RMD table available when spouses are more than ten years apart, using Roth conversions to avoid the widow's trap, and planning for long-term care.
Read the full article at AARP →
