Let’s talk about a blind spot in many people’s retirement planning–covering the potential catastrophic needs that you have. I want to mention two areas today. 

One is if one spouse significantly outlives the other. What is the impact on income?

Where are you getting your retirement income from, the guaranteed sources? Not the withdrawals from savings, because the withdrawals from savings in your income plan are going to continue as part of your plan when one spouse dies. But what’s the impact of your guaranteed income? Is there a survivorship on your pension, and if so, what is it? 

There’s also the impact on Social Security. We know that the lower Social Security benefit is going to go away. The surviving spouse is going to get the higher benefit, but the lower one is going to go away. Typically, the income needs are going to go down 20-25 percent, but what if your income is going to go down 40-50 percent? What is the impact on that surviving spouse?

The other issue is the long-term healthcare issue. If you’re 60 years-old, there’s a 70 percent likelihood you’re going to need long-term healthcare, which means if you’re a married couple in your 60s, you have a 50-50 likelihood that you’re both going to need long-term healthcare. Long-term healthcare is 90 or more days of custodial care, which isn’t covered by Medicare. 

These are critical potential insurance needs you may have in your plan that have been overlooked.