Sometimes the most critical questions are the ones that we don’t — or can’t — bring ourselves to ask. For pre-retirees, those questions are usually tied up in worst-case scenarios.
We don’t want to wonder about how the loss of a life partner will impact our day-to-day life or ability to pay the bills. It can seem like the easier emotional tact to put off cold logistical conversations for later. This approach is entirely understandable but, according to fiduciary and Goldstone Financial Group principal Anthony Pellegrino, counterproductive.
“People need to have these conversations,” Pellegrino says. “They’re uncomfortable, stressful, and incredibly necessary. What people don’t realize is that down the road, not having essential information will prolong the stress for loved ones. The truth is, financial planning isn’t just for you — it’s for those you leave behind, too.”
Anthony Pellegrino’s assertions stem from decades of experience as a fiduciary. His firm, Goldstone Financial Group, specializes in helping clients prepare their finances for retirement. Over the years, it has guided countless clients towards financial solutions that are carefully crafted to persist through market fluctuations and provide retirees with dependable income through their sunset years. Pellegrino built Goldstone Financial Group around the belief that retirement savings can — and should — last as long as a retiree does. In upholding that belief, Anthony Pellegrino has found that preparation, more than anything else, is the key to building a secure financial future.
“You want to make sure that your spouse is provided for if the worst happens,” Pellegrino says. “And they would want the same for you. But you need to prepare early before any other events or stresses derail the conversation.”
According to the team of fiduciary advisors at Goldstone Financial Group, there are two primary concerns at hand when it comes to planning for the loss of an earner. The first is the issue of replacing lost income; the second is ensuring that all financial knowledge is equally shared and accessible.
“Replacing lost income isn’t easy,” Anthony Pellegrino says of the first. “It doesn’t matter if one spouse or both spouses work; one earner’s death will have a dramatic impact on household income.”
This lapse occurs regardless of whether the deceased partner had been working or not. If they were still employed, their spouse immediately loses an expected paycheck, as well as the lost partner’s health benefits and retirement contributions. If the deceased partner was retired and drawing on Social Security, one set of benefits would disappear after their passing.
That said, the remaining spouse does have plenty of ways to maintain their financial security. Goldstone Financial Group fiduciary advisors often help clients plan for this very eventuality.
“The direction a client takes depends very much on the couples’ circumstances,” Anthony Pellegrino explains. “Proceeds from a life insurance policy, for example, can provide enough income for a surviving partner to live comfortably without prompting a taxable event. IRA or 401(k) accounts can be transferred to a spouse; individual or joint annuities continue to provide payouts until both spouses have passed on.”
The loss of a partner doesn’t need to equate to the loss of financial security — however, preparation is paramount. This brings us to the second major hurdle of preparing for a loss: Knowledge-sharing.
“At Goldstone Financial Group, we help countless clients with their financial planning, and in almost every case, one spouse knows significantly more about money than their partner,” Anthony Pellegrino shares. “That unequal distribution of knowledge can become a major problem down the road.”
The answer, Pellegrino explains, is to stay organized and ensure that both partners know how to access important financial information. Critical documents include wills, insurance policies, account statements, birth and marriage certificates, mortgage documents, motor vehicle titles, and funeral arrangements. It is also essential that both spouses keep apprised of all financial planning meetings and decisions so that either partner can readily take over financial decision-making in the event of a loss.
“Planning for the worst is stressful,” Anthony Pellegrino says. “But an awkward conversation now will make matters infinitely less so in the future.”