Better ways than candy to celebrate Valentine’s day with your spouse.
According to the National Retail Federation, this year we are estimated to spend $14.2 Billion on our significant others for Valentine’s Day. This works out to an average of $185 per person. There is nothing wrong with spending a little money to celebrate your love and commitment, but I can think of more effective steps you can take.
- Sit down with your spouse and discuss your Social Security claiming strategy. You can start to claim social security at age 62, but you don’t reach full retirement age until age 66 or 67 depending upon your birth year. If you claim at 62, you won’t get your full retirement amount, but, If you wait until age 70, you can earn 8% per year on the years over full retirement age. That difference can mean hundreds of thousands in income over your lifetime. Maybe you can’t wait until age 70 or if you do, you need to plan for income between age 65-70. The time to prepare is before you will need to claim.
- Review your 401k contributions. Maybe you need to save more for retirement or maybe you just need to ensure you both are getting the full employer matches on the money you are saving and a simple change to where you are saving can result in more contributions to your retirement.
- While you are looking at your retirement accounts, check your beneficiaries and make sure they are current.
- Review account ownership on your assets. The goal here is to two-fold. In the event of one’s spouse’s death, you want to be sure the remaining spouse has access to the funds and assets needed. This may be a good time to determine with your financial advisor if your ownership strategy is structured for maximum inheritance tax reduction. TOD is not an abbreviation for an amphibian, but a valuable estate planning tool; Transfer on Death that can save thousands.
Now these steps are not romantic, but they can make life easier and richer in retirement for you and your loved ones. As you discuss your options, light some candles, put on some romantic music and prepare for a great future together. As always, feel free to call us if you have any questions.