Estate Planning In An Age-gap Relationship

If you are in a relationship with a considerable age gap, your estate planning will focus on retirement funding, social security timing and health care.

Retirement Funding

In a relationship, if one partner reaches the age of retirement and the other one is nowhere near to it, don’t even think about coordinating your retirement plans. Staggered retirement can be highly advantageous for a couple. The younger spouse will be able to take care of the medical expenses as long as both of them do not qualify for Medicare. The steady income of the younger spouse can minimize the need for living off investments.

Most couples chalk out a plan for thirty years of retirement at the age of 65. But with a significantly younger spouse, you will observe a rise in the level of assets and a decline in the withdrawal rate. Assuming a 5% and 3% rate for return and inflation, respectively, the required asset will be $1.1 million to cover a withdrawal of $50,000 for 30 years.

Social Security Timing

If one spouse starts taking social security benefits, the surviving spouse will accumulate reduced benefits at 60. It is necessary to analyze the work status of both the partners to check if one is dependent on the other.

The survivor’s benefits will be impacted in case of remarriage after crossing the threshold of 60 years. A surviving spouse who is divorced would qualify for the benefits if the person were married for more than ten years.

If either partner possesses a defined benefit pension, it will have to be cautiously decided how the other will be covered. There are specific terms about when you can withdraw the benefits. The surviving spouse does not enjoy the same benefits as an employee enjoys. The benefits for the surviving spouse are always minimized.

Health Care

The expenses of healthcare is a crucial concern for people with long-term ailments. There is an even bigger problem if the older spouse qualifies for Medicare while the younger spouse is dependent on the older spouse for health care expenses. Even if you can find a healthcare policy privately, it will be too expensive. You need to select a health care plan that fits the younger spouse with a longer life expectancy rate.

Relationships with age gaps are characterized by differences in retirement plans, life expectancy rates, health problems, etc. You can take legal and financial advice to develop an estate plan in a relationship with a significant age gap

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