What’s your plan?
Ask Pam what you should do— e-mail whatstheplan@consistentvalues.com to get advice. Names and identifying information are changed to protect confidentiality, and there is no charge for the advice featured in the column. approximately $5,400 per month after taxes at Beth’s age 57, and Julie’s age 55, as a married couple. If Beth and Julie decided to work 5 years longer, until they are 62 and 60, then we project that their after-tax spendable income rises to approximately $6,420 per month.
But: Their income could decrease by approximately $350 per month after taxes if they decided to stay single, file taxes individually, and everything else remains the same. Many other benefits would not be available to them as an unmarried couple — survivor’s benefits from Social Security, survivor benefits for Beth’s pension, and retiree’s healthcare benefits through Beth’s employer.
But changing their marital status to married could have other financial effects, making them financially responsible for one another’s longterm medical care.
Beth and Julie are currently both on the same home- owners and auto insurance policies. I also recommend they purchase an umbrella liability policy. This is a policy that raises their liabilityprotection limit to 1 million dollars and covers incidents that the other two policies may not. If someone were to trip on their sidewalk in front of their house, a traditional homeowner’s policy may not cover this and the umbrella policywould then protect them and their assets.
I also highly recommend Beth and Julie visit with an estate planning attorney as they consider the possibility of getting married. There are legal hurdles involvedwith this step, and an attorney would help them navigate this. In addition, the couple needs to have wills and trusts established in the event something should happen to them. As of now, neither of them would have any legal decision-making power for the other.
This is an exciting time for the couple and I wish them continued love, success and a happy retirement.