Reliable streams of retirement income will vanish when a spouse passes away. Social Security and pensions are subject to survivorship implications that may not be felt for decades. Consider the spousal consequences of timing and starting income. Decisions early in retirement may have consequences on your spouse even after your own life expectancy. Contact Ron Courser, CFP® to make sure your plan addresses Spousal Income Risk in Retirement (616) 301-2581, and visit the website at

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Financial Education

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Investment Advisory Services offered through Brookstone Capital Management, LLC (BCM), a Registered Investment Advisor. BCM and Cornerstone Retirement Partners are independent of each other….(read more)

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As we continue to explore the critical risks faced by retirees, we cannot ignore the potentially significant impact of spousal income. In many cases, spouses may have different retirement resources, such as savings, pensions, or Social Security benefits. When one spouse relies heavily on the other’s income, the risks to both individuals increase significantly. It is important to understand these risks and plan accordingly to mitigate them.

1. Loss of Spousal Income

The most common risk is the loss of spousal income due to death or divorce. This loss can be devastating, particularly if the surviving spouse has not adequately prepared for the loss of income. At a minimum, it is essential for both spouses to have some independent income streams to ensure financial security if one spouse dies or divorces.

2. Single Spousal Income

In some cases, one spouse may have little or no retirement resources, or they may not have been able to generate an adequate income during their own working years. In these scenarios, the couple may rely heavily on one spouse’s income to fund their retirement years fully. This can create significant risks if that income stream is disrupted or lost.

3. Unequal Spousal Resources

Even if both spouses have retirement resources, they may have different amounts or types of resources that require a different financial strategy. For instance, one spouse may have a defined pension plan, while the other may have more liquid retirement savings. These differences in financial resources can create disparities in the ability to finance retirement adequately.

4. Health Risks

Significant health risks to one spouse can also create significant financial risks to the other. For example, if one spouse suffers from a long-term illness that requires extensive or costly care, it can deplete resources intended for the other spouse’s retirement years.

5. Unexpected Expenses

Unexpected expenses, such as a home repair or emergency medical care, can also create significant financial challenges for retirees relying on spousal income. In these scenarios, both spouses need to assess their risk tolerance and factor in unexpected expenses in their financial plan.

6. Lack of Communication

Lack of communication and differing retirement strategies can also create conflicts between spouses. It is important for both spouses to have open communication about their financial strategies and goals and work collaboratively to achieve their retirement targets.

7. Market Volatility

Market volatility can significantly impact investment returns and reduce the income generated by retirement resources. Retirees relying on spousal income need to consider investment risk and market volatility when planning for their financial future.

8. Inflation

Inflation rates also have potentially significant impacts on retirement resources, particularly for couples relying on a single income stream. It is essential to consider the effects of inflation when planning for retirement.

9. Taxation

Taxation is another critical risk that requires careful planning. In most cases, spousal income is taxed separately, with different tax rates applied based on income levels. Couples must plan for their tax liabilities to avoid paying more in taxes than necessary.

In conclusion, spousal income can present significant risks to retirement planning. Couples must work together to plan their financial future and prepare for the possible risks associated with a single income stream. Open communication, collaboration, and careful financial planning can help mitigate these risks and ensure a fulfilling retirement.