The Retirement Planning Challenges In Age-Gap Relationships

An “age-gap” marriage historically is one with at least an 11-year age gap between the spouses. Age-gap relationships have increased over the years because the average lifespan has increased. In 1960, the average lifespan was 67 years for men and 74 years for women. In comparison, in 2017, the average woman lived to  81.1 while the average man lived to 76.1. Increased longevity has changed the playing field of marital relationship ages. And with these changes, new problems have emerged in the areas of retirement, financial and estate planning.

One challenge is deciding when to retire — the age gap could be a half-generation or more, and each spouse could be at a different life stage psychologically when it comes to retirement. Another challenge is navigating financial planning issues like asset allocation, distribution patterns, and investment accounts.

Age-gap couples need to understand the different rules for withdrawing assets, especially with regard to Required Minimum Distributions (RMD) from retirement accounts. Usually, individuals calculate required withdrawals based on the Uniform Lifetime Table, but the rules are different with certain age gap couples, and there could be some tax benefits.

“When it comes to calculating one’s IRA required minimum distribution, if your spouse is 10 or more years younger, you must use the Joint Life and Last Survivor Expectancy table to calculate your RMD,”  Diane Bourdo, CFP®, president of The Humphreys Group in San Francisco, told Forbes. “This will result in a smaller RMD, thus lowering your taxable income.”

You can read the full Forbes article “The Retirement Planning Challenges In Age-Gap Relationships” here.

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Diane Bourdo, CFP®
Diane Bourdo, CFP®

Diane Bourdo is the President of The Humphreys Group. Diane has dedicated her life’s work to helping women make smart financial decisions. For nearly 30 years, she has developed investment management and financial planning strategies that allow her clients to create lives that reflect their values. Diane was named an InvestmentNews 2020 Women to Watch and has been recognized in Forbes, SF Chronicle, NY Times and more for her work and writing.

Diane Bourdo, CFP®
Diane Bourdo, CFP®

Diane Bourdo is the President of The Humphreys Group. Diane has dedicated her life’s work to helping women make smart financial decisions. For nearly 30 years, she has developed investment management and financial planning strategies that allow her clients to create lives that reflect their values. Diane was named an InvestmentNews 2020 Women to Watch and has been recognized in Forbes, SF Chronicle, NY Times and more for her work and writing.

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