Question: S.N. in Delhi Township: I’m 63 but plan to keep working and not ever retire. Does this mean I don’t have to save as much as most people?
A: We definitely hear this train of thought from time to time. And, on the surface, it can make perfect sense: If you work through retirement, you’ll be earning an income which means there’s less need to rely on investments and savings to fund your living expenses as you get older.
However, we like to say on our Simply Money radio show that there’s a difference between the perfection of theory and the mess of reality. In other words, you may have the grandest of intentions to work until the day you die and thus not need to tap any sort of retirement fund – but life sometimes gets in the way. Just ask the more than three out of 10 retirees in a 2019 Center for Retirement Research study who had to retire earlier than they planned (and that’s before the pandemic hit).
At the end of the day, retirement essentially comes down to four kinds of ‘sickness:’ You get sick and need to stop working; someone you love gets sick and you need to quit to take care of them; your employer gets sick of you and lets you go; or you get sick of your job and decide it’s finally time to retire. As you’ll notice, you only have control over the last option.
This is not to say that you shouldn’t keep working for as long as you want (or can); if you have a job you love, that’s fantastic! But you need to financially plan as if you’ll eventually retire – whether by choice or by force – someday. We would hate to see you neglect your retirement accounts, then, in just a few years, find yourself relying on a retirement income that isn’t sufficient enough to cover your needs. And before you say, “What about Social Security?” it’s important to remember that your benefit will only replace about 40% of your pre-retirement income.
Here’s The Allworth Advice: If your dream is to keep working forever, then we wish you all the best. But, just in case that doesn’t pan out, it’s also critical to have a ‘plan b’ ready to put into action.
Q: Kelly from Wyoming: My father just recently passed away. How does my mom get her Social Security widow’s benefit?
A: The process for your mother to receive her ‘survivors’ benefit depends on whether or not she was already receiving a benefit off your father’s record (like a spousal benefit). If she was, that benefit will automatically convert to a survivors benefit once the Social Security Administration is alerted of his passing (the funeral home usually does this). If she wasn’t, she’ll have to call Social Security (1-800-772-1213) and either apply over the phone or schedule an in-person appointment since this specific benefit cannot be applied for online.
Additionally, the survivors benefit begins at the time someone applies (it is not retroactive at the time of death) meaning your mother should consider applying as soon as possible.
We also want to point out that your mother should keep an eye on the mail or the checking account. Because any Social Security payment that’s received for the month of death (or any later months) must be returned. For example, assuming your father died in March, any April payment received on his behalf must be refunded to Social Security.
The Allworth Advice is that we suggest visiting the Social Security website at ssa.gov – it has more detailed information for survivors that can help your mother navigate her benefits during this difficult time.
Every week, Allworth Financial’s Amy Wagner and Steve Sprovach answer your questions. If you, a friend or someone in your family has a money issue or problem, feel free to send those questions to email@example.com.
Responses are for informational purposes only, and individuals should consider whether any general recommendation in these responses is suitable for their particular circumstances based on investment objectives, financial situation and needs. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional adviser of his/her choosing, including a tax adviser and/or attorney. Retirement planning services offered through Allworth Financial, an SEC Registered Investment Advisor. Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Call 513-469-7500 or visit allworthfinancial.com