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Help Me Retire: I’m 68, my husband is terminally ill, and his $3 million estate will go to his son. I want to spend the rest of my days traveling — will I have enough money?

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Hello, 

Please help me. I am a 68-year-old woman married 17 years to the love of my life. Our finances have always been separate, and I signed a prenuptial agreement acknowledging that his son will inherit his estate held in a living trust (about $3 million). I get our home, and he is leaving me $350,000 in his will.

The husband took a lump Social Security payout before we met. We have always lived debt-free, and I have a nice 2020 vehicle. While I live a modest lifestyle, his health has prevented us from enjoying a vacation for eight years. I am eager to travel more in the future. My husband is terminally ill and will likely live only another year or two. His medical bills are not my responsibility.

In 2019, we built a new home. Although its exact value is unknown, I will probably clear about $800,000 for this asset, expecting I will purchase a smaller home upon his passing.

I get Social Security and a pension, and now collect about $20,000 total annually. I have been an ambitious saver and now have reached about $350,000 earning good money on my mutual funds. Other stock is worth about $20,000, and I have a 457 account worth $65,000. I have $60,000 in savings and $20,000 in checking currently. 

I have never removed a dime from my investments, and doubt much will change that would necessitate this until I am alone. My husband pays our living expenses now. My goal is to enjoy the remainder of my life, leaving as much money as possible to my four siblings. 

Sounds pretty good to me, but I have been taking risks holding my savings in stocks to earn an annual realized return of more than 15% in the last decade. And I do not have long-term-care insurance.

Can I expect to live out my life in good financial health?

Dear reader, 

I am so sorry to hear about your husband’s illness. That is such a difficult experience to live through. I am glad to see you are planning for your finances after he passes — that will save you a lot of headaches along with the heartbreak, and give you stability and security in your older age. 

To get to your answer, you’re going to have to do some serious analyzing of your current and expected future expenses. Keep in mind, though, anything can change in a few years, or even a year, so be flexible when you map out your finances for the future. 

First, develop a plan (some might call it a budget), said Robert Gilliland, managing director and senior wealth adviser at Concenture Wealth Management. Take into consideration every single possible expense you anticipate after your husband dies, and account for inflation as well. You can break these expenses down into the short term, such as one to five years, the intermediate term, which would be the six- to 10-year span, and the long term, or beyond 10 years. Include your projected housing expenses, and perhaps plan for whether you stay in your current home or find something smaller. Also think about healthcare, which is a major potential expense in any retiree’s budget; utilities; emergency expenses; the occasional meal or entertainment; and so on.

Don’t miss: Stressed about saving for retirement? Focus on your ‘bottom line’ 

Also read: We are in our late 50s and have retired with less than $1 million: ‘Did I jump the gun?’

After accomplishing this analysis, look at what your expected income sources are. You mentioned Social Security and a pension, and you may take regular withdrawals from your investments. Compare your income to your expenses. “Once you have that number you can determine what a ‘reasonable’ withdrawal rate is on the assets to determine excess funds available for travel,” Gilliland said. 

A note about your investments: Advisers use this bucket approach with investments, in which case it is common to see intermediate- and long-term needs invested with more risk. You mention your savings are taking on a lot of risk right now, however, and you should consider speaking with a financial adviser — even one where your money is housed — to see whether that is the right asset allocation for you. If you’ll be living on a fixed income, you can’t afford to lose too much in your portfolio. Diversification and proper allocation will be keys to your success. “At the end of the day, being able to ensure funds will be available to meet her needs should be most important,” Gilliland said. 

Also, reach out to the Social Security Administration’s office to start planning for what other potential benefits you may be eligible for, such as the widow’s benefit, said Jude Boudreaux, a certified financial planner and partner at the Planning Center. You might even get more money every month as a result, depending on whether your survivor benefit is higher than your personal one, and it doesn’t hurt to start making sense of the benefits or numbers now. You may be on hold with the Social Security Administration for hours when you call, but it will be worth it. (Here’s more information on survivor benefits from the SSA.)

Check out the MarketWatch column Retirement Hacks for actionable pieces of advice for your own retirement savings journey. 

You mentioned you didn’t have long-term-care insurance. This can be very expensive, especially since you’re a little older than the typical “ideal” candidate (advisers often suggest people begin looking into long-term-care insurance in their 50s). It could make sense for you so it doesn’t hurt to look up some policies, but know that there are other options for you as well, such as hybrid policies that could offer long-term care to you and a possible death benefit to your siblings. Some annuities have long-term-care riders, though you should vet these products thoroughly before jumping in. (Here’s a comprehensive guide on long-term-care insurance for you to peruse.) 

This isn’t financial advice, but it is still important: Stay active and take your health seriously. Take long walks, try to maintain a healthy diet, and keep in touch with loved ones — now and after your husband dies. These daily activities make a world of difference for one’s elder years. 

Also see: The millions you save for retirement aren’t worth much if you’re not healthy enough to enjoy it 

Here are a few other suggestions. Gilliland said he always recommends taking a year before deciding whether or not to move after losing a spouse, because that time is so emotional and people may make decisions they ultimately regret. 

You might want to start doing some calculations now and talking to your husband for his input. You mentioned a prenuptial agreement, but those don’t preclude someone from gifting to their spouses during the marriage. If the trust you’re referring to is an inter vivos, or revocable, trust, your husband could gift you some money now without tax consequences while he is still alive. Of course, this might feel like a sticky situation and in no way is this suggestion meant to stir any drama between you and your husband and his son, but it doesn’t hurt to ask your husband what he thinks, Boudreaux said. “It’s worth exploring.” 

Ultimately, you sound like you’re very conscientious about your finances, and that will certainly help you later on. Just try to think of every possible thing you’ll need, monetarily and otherwise, so that you’re not caught off-guard when your husband passes. And make sure you and he have multiple conversations about what he thinks you should know after he’s gone — anything from the bank-account passwords to the little tasks he may normally take charge of around the house. 

I wish you all the best. 

Readers: Do you have suggestions for this reader? Add them in the comments below.

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

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