Planning for life after retirement amid uncertainty

I sometimes say to clients when planning, “if you could tell me when you are going to die, when your spouse will die and who will get sick and when, I can write you an amazing retirement and estate plan!” Things being as they are, we unfortunately (or fortunately) do not know the answers to these questions and others.

Consider the state of the economy and the tax laws or — closer to home — how will your spouse (or you) handle finances on death, will any of your children encounter serious financial problems not of their own making such as disability? So much is uncertain that we probably try not to think of the alternatives too often.

Finally, while we frequently plan for our estates considering what we leave to our spouses and children, it is probably a fact that we rarely consider the long life ahead for many spouses as widows or widowers. While our spouse could remarry, it is also likely she or he could decide to remain single. Is she (or he) prepared to face the financial and other challenges ahead alone?

This thought came to mind when a professor teaching a course in financial planning I was attending commented he strongly encouraged his wife to

The general impression these days is to delay taking Social Security if it does not cause too much of a hardship.

go back for additional education, his motive being that he wanted to assure she had a profession to fall back on for financial support if some day she needed to manage the finances alone.

Some considerations include when to take Social Security benefits and whether to take a lump sum distribution on retirement or what is referred to as a joint and survivor annuity. These are both subjects on which I have commented quite a bit over the years.