Author Topic: Pension income, death, and ensuring the wife and children's financial survival  (Read 10349 times)

MrFancypants

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In about five years I will be eligible for military retirement.  At that point it is theoretically possible that we could have our house paid off, although that is the "best case" estimate.  It is more likely that given Roth IRA contributions and the random things I am unable to account for at this time it'll take closer to ten years.

At the point that I reach military retirement and the home is paid off, that pension will be enough for me to declare financial independence.  The problem is, if I die, the pension stops and all that's left is the house, whatever possessions that may be in it, and a Roth IRA which currently only has enough to go for a year, maybe two.  My concern revolves around my wife, who is unable to work and generate income on her own without being in extreme pain (she's legally disabled), as well as our future children.  I want my wife to be able to provide for herself and our children on what I would leave them.

Thankfully my technical specialty is in an area that is currently quite lucrative, and should continue to be for quite some time.  Initially the plan was to reach military retirement, pay off the house, keep all monthly expenses covered by my pension, and continue to work while shoveling all income from that job into savings (probably invested in index funds with Vanguard).

But I don't want to continue chasing employment on the basis of monetary gain.  I will reach a point where I will want to move to an area of the country of our choosing, devote a majority of my time to my family, while leaving myself a few minutes to play with cars, eat Cheetos, guzzle Mountain Dew, and pwn n00bs in Call of Duty.  I'd rather reach this point sooner than later.

So with that in mind, what is a reasonable course of action for me to take?  Should I consider a life insurance policy that pays out enough to provide my wife with the ability to go the Vanguard route, living off of a percentage of appreciation/dividend earnings?  Should I continue to work for a few years and try to amass a small pile of money?

MrFancypants

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......and I have no reason to believe that I'm actually going to die any time soon.  I'm healthy and do not maintain any habits that might bring a swift end to my time here.  I just want to make sure I don't leave a mess behind if I'm walking down the street one day and I'm struck by a toilet that fell from the international space station or something.

fodder69

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Hmm, nothing says you can't do both. Not sure the exact value of the pension but if you were to get a small life insurance policy of say $250K it shouldn't be more than a couple hundred a year.

You also don't mention what you have in savings now, but it would seem sensible to at least get at least $250k outside of that to provide supplemental income, etc. If you won't have that by the time you retire, I can't advise you to not continue working for at least a few years  to save that, especially with a wife that can't work and future kids in mind.

MrFancypants

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Hmm, nothing says you can't do both. Not sure the exact value of the pension but if you were to get a small life insurance policy of say $250K it shouldn't be more than a couple hundred a year.

You also don't mention what you have in savings now, but it would seem sensible to at least get at least $250k outside of that to provide supplemental income, etc. If you won't have that by the time you retire, I can't advise you to not continue working for at least a few years  to save that, especially with a wife that can't work and future kids in mind.

I can't say for certain what the value of my pension will be until I'm a little closer to that point, current value it should be somewhere between $24,000 and $36,000 a year (value appreciates the longer I stay in the military past 20 years).  Current savings is about $35,000 in a Vanguard Roth IRA; the only debt I have is the mortgage.  This is enough to cover all recurring expenses as currently budgeted.  If my pension reaches the high end not only is it enough to cover expenses, but enough for extra luxuries, any income beyond that is icing on the cake.

What I have never done before the past five minutes is actually shop for life insurance, as this is something that is already provided through employment.  I hadn't realized that it was so incredibly cheap.  I suppose that means the question is more or less answered and that in no later than ten years from now I can do whatever I want to do with myself.
« Last Edit: January 28, 2014, 07:00:32 PM by Mykl »

Psychstache

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......and I have no reason to believe that I'm actually going to die any time soon.  I'm healthy and do not maintain any habits that might bring a swift end to my time here.  I just want to make sure I don't leave a mess behind if I'm walking down the street one day and I'm struck by a toilet that fell from the international space station or something.

Quote
But I don't want to continue chasing employment on the basis of monetary gain.  I will reach a point where I will want to move to an area of the country of our choosing, devote a majority of my time to my family, while leaving myself a few minutes to play with cars, eat Cheetos, guzzle Mountain Dew, and pwn n00bs in Call of Duty.  I'd rather reach this point sooner than later.

Contradiction!!!

to be serious, I think this would be exactly the situation for term life insurance. should cover the gap time between technical FI and the full secure funding of your family in your absence.

And yes it is cheap. I got a $300K 30 yr term policy, healthy 28 yo male, non smoker, with family history of high BP, heart attacks, and cancer. I pay less than 20 bucks a month.

MrFancypants

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Contradiction!!!

to be serious, I think this would be exactly the situation for term life insurance. should cover the gap time between technical FI and the full secure funding of your family in your absence.

And yes it is cheap. I got a $300K 30 yr term policy, healthy 28 yo male, non smoker, with family history of high BP, heart attacks, and cancer. I pay less than 20 bucks a month.

Caught me!!!  :D

In honesty, that was more a metaphor for "do whatever the heck I feel like doing" than a suggestion that I would eat Cheetos and guzzle Mountain Dew.  :)  I can't remember the last time I had either (I do enjoy a diet Mountain Dew from time to time, regular makes me sugar crashy).

It does seem like term life insurance is the answer, even if I do continue to work to build up an extra cushion.  It's so cheap that it seems irresponsible to not purchase a policy no matter what path I take.

bogart

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Term insurance does seem like a sensible plan.

Out of curiosity, does the military pension system not offer a survivorship option, or is it just too badly structured to be worth considering?  My DH's (public, not military) pension did, and for us it was a no-brainer to take it (i.e. structured the opposite way from what I've asked about yours).

MrFancypants

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Term insurance does seem like a sensible plan.

Out of curiosity, does the military pension system not offer a survivorship option, or is it just too badly structured to be worth considering?  My DH's (public, not military) pension did, and for us it was a no-brainer to take it (i.e. structured the opposite way from what I've asked about yours).

They do, although I'm not sure if it's a terribly good deal.  I'll have to study it more, but on first glance it seems is though it would be more cost effective to buy more term life insurance with the money you'd have to pay in to take the survivor option.

Empire Business

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Wait a minute.

If I understand your original post correctly, your wife is currently legally disabled, but it sounds like you both still expect her to carry and labor and deliver children?  I'm sorry for even having to go here, but is that her idea or yours?

foobar

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Disabilty covers a wide range of situations.  One things to look into is if your eligible for any type of SS survivor benefits if you die.

How much will you be able to save when living off the pension? I would be a bit concerned that the COL adjustments will not keep up with inflation AND that they kid will cost a bit more than you budget for. I would personally would try working for a year or two before bailing but I also don't hate my job and am very financially conservative in these things


Wait a minute.

If I understand your original post correctly, your wife is currently legally disabled, but it sounds like you both still expect her to carry and labor and deliver children?  I'm sorry for even having to go here, but is that her idea or yours?

MrFancypants

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Wait a minute.

If I understand your original post correctly, your wife is currently legally disabled, but it sounds like you both still expect her to carry and labor and deliver children?  I'm sorry for even having to go here, but is that her idea or yours?

As was stated by foobar, not all disabilities are equal.  On a good, normal day you wouldn't be able to tell that there was anything wrong with her, but given the sporadic nature of her illnesses it's impossible for her to maintain employment.  So we've developed into a very traditional marriage with her responsible for keeping up the household, with the understanding that she works at a pace that doesn't trigger pain and I'll pick up the slack when needed.  We've had many lengthy discussions on the subject and we both feel that we can still responsibly take care of children.  But the sooner I reach FI the sooner I can take over more of her responsibilities at home and lighten her load.

The desire to have children is mutual and neither one of us needed to be convinced.  At this point the only conversation is how many....  she wants four, and I want two.  We've settled on the obvious, see how we feel after each one and decide if we'll have another.

Given that she has been classified as disabled she would be eligible to receive SS benefits, but the problem is that the rules state that in order for her to collect she would basically have to be homeless....  as in, she couldn't own a house, nor could she own any assets exceeding a certain monetary amount (which is quite low).  So in my mind that's not really an option, even if it is a useful safety net.  She will also be eligible to collect a normal SS payment at the same age as everyone else.

It's highly likely that I'll seek to supplement my pension income in one way or another after military retirement.  Just to see what it's like, I'll probably go for a job on the higher end of the pay scale that I'm qualified for and if it isn't for me....  I'll have the option to move on to something else.  I guess I'd simply like to get from the "it would be nice to have a little extra supplemental income" to "why am I working?  I have way more than I actually need or even want?" as fast as possible.

rubybeth

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Given that she has been classified as disabled she would be eligible to receive SS benefits, but the problem is that the rules state that in order for her to collect she would basically have to be homeless....  as in, she couldn't own a house, nor could she own any assets exceeding a certain monetary amount (which is quite low).  So in my mind that's not really an option, even if it is a useful safety net.

I am pretty sure you are completely and utterly wrong about this, in a good way. :) My dad is a social security disability representative, and lots of his clients live in houses with their spouses that they own and have assets. I think you are thinking of SSI which is very different from SSDI. My mother-in-law is on SSI, and it's true that there is an asset test and she can't really own anything of value. SSDI is what covers you if you have enough work credits and you become disabled. You have to apply and may get denied the first time, but if she is genuinely disabled, she will likely qualify eventually. You need good medical records to back this up, but a good disability rep will help you put together a good case. You will definitely want to look into this. If she can qualify for SSDI benefits, that would shorten your time period of working, and give you both some peace of mind. Look up social security disability reps in your area. If you need more info, I can probably ask my dad about it. Private message me.

Edited to add: this explains the difference between SSI and SSDI: http://www.disabilitysecrets.com/page5-13.html
« Last Edit: January 29, 2014, 07:20:00 AM by rubybeth »

foobar

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Well that is easy. Live cheapily and save and invest the rest:). If your pensions is 50k, and your living expenses are 25k, you have no need to work. If you pension is 50k, and your expenses are 75k, you clearly need to work. The tricky case is when your pension is 50k and your expenses are 45k.  Is that enough cushion for you or would you rather work long enough to save enough money so that your income is 60k and your expenses are 45k. That is a very personal decision and you have to figure out how much risk is your life. A couple who is done having kids has much better guess of their future than the person that doesn't.  Just imagine getting triplets:)


  I guess I'd simply like to get from the "it would be nice to have a little extra supplemental income" to "why am I working?  I have way more than I actually need or even want?" as fast as possible.

MrFancypants

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Given that she has been classified as disabled she would be eligible to receive SS benefits, but the problem is that the rules state that in order for her to collect she would basically have to be homeless....  as in, she couldn't own a house, nor could she own any assets exceeding a certain monetary amount (which is quite low).  So in my mind that's not really an option, even if it is a useful safety net.

I am pretty sure you are completely and utterly wrong about this, in a good way. :) My dad is a social security disability representative, and lots of his clients live in houses with their spouses that they own and have assets. I think you are thinking of SSI which is very different from SSDI. My mother-in-law is on SSI, and it's true that there is an asset test and she can't really own anything of value. SSDI is what covers you if you have enough work credits and you become disabled. You have to apply and may get denied the first time, but if she is genuinely disabled, she will likely qualify eventually. You need good medical records to back this up, but a good disability rep will help you put together a good case. You will definitely want to look into this. If she can qualify for SSDI benefits, that would shorten your time period of working, and give you both some peace of mind. Look up social security disability reps in your area. If you need more info, I can probably ask my dad about it. Private message me.

Edited to add: this explains the difference between SSI and SSDI: http://www.disabilitysecrets.com/page5-13.html

Right up front I want to say I don't know as much about this as I wish I did.  But the whole system seems quite convoluted and difficult to research and apply to our situation.

What I can say is that she is (was) SSI, and was prior to us getting married.  She was considered disabled at such a young age that she wasn't able to generate enough work credits.  My assets and income basically pushed her out of the program.

What I don't know is if she could qualify for SSDI if I die on account of having been married to someone who has enough work credits.  I'll poke around and see if I can find more info or maybe PM you.  All I really know about this is what my wife has told me, because she's been through the process already.

MrFancypants

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Well that is easy. Live cheapily and save and invest the rest:). If your pensions is 50k, and your living expenses are 25k, you have no need to work. If you pension is 50k, and your expenses are 75k, you clearly need to work. The tricky case is when your pension is 50k and your expenses are 45k.  Is that enough cushion for you or would you rather work long enough to save enough money so that your income is 60k and your expenses are 45k. That is a very personal decision and you have to figure out how much risk is your life. A couple who is done having kids has much better guess of their future than the person that doesn't.  Just imagine getting triplets:)


Yup!  My expenses, on account of trying to save as much as possible, are already quite low (and will stay that way).

Those are valid concerns and things to consider and the closer I get to military retirement the more I'll see how long I need to work to create that cushion.  I can't imagine that I'll ever be completely without any form of income, but sticking with a high stress/high pay job for a year or three after retirement could be a good idea anyway.  If nothing else I can use the extra income via investments to fund a new hobby or something.

rubybeth

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Right up front I want to say I don't know as much about this as I wish I did.  But the whole system seems quite convoluted and difficult to research and apply to our situation.

What I can say is that she is (was) SSI, and was prior to us getting married.  She was considered disabled at such a young age that she wasn't able to generate enough work credits.  My assets and income basically pushed her out of the program.

What I don't know is if she could qualify for SSDI if I die on account of having been married to someone who has enough work credits.  I'll poke around and see if I can find more info or maybe PM you.  All I really know about this is what my wife has told me, because she's been through the process already.

Okay, that might be true, then. If she doesn't have enough work credits, then she wouldn't qualify for SSDI. If you die, she would likely qualify for your SS benefits, not SSDI.

militaryincome

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Assuming you are from the U.S., the Survivor Benefit Plan (SBP) would probably be beneficial. This article describes it pretty well.

Essentially you forfeit 6.5% of your pension for 30 years. But, if you die at any point in retirement, your wife will keep getting 55% of your pension for the rest of her life.

MrFancypants

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Assuming you are from the U.S., the Survivor Benefit Plan (SBP) would probably be beneficial. This article describes it pretty well.

Essentially you forfeit 6.5% of your pension for 30 years. But, if you die at any point in retirement, your wife will keep getting 55% of your pension for the rest of her life.

It's highly likely that my wife will outlive me, however, this is how my initial analysis of the program pans out....  let us say that my pension is $2000 a month (nice round number, easy math, lower that it will actually be).  I'd be paying $130 a month for the eventuality that she can eventually draw $1050 a month.

On the other hand, if I were to purchase a term life insurance policy rated at $500,000 for $40 a month, should I die she could draw $2500 a month for 30+ years.  Add 2% to her monthly withdrawals to account for COL increases and inflation and that half a million still lasts for 27 years.  Supplemented with a paid off house and whatever additional savings we build up, I just can't see how she wouldn't be able to make ends meet, even with children, on $30k+ a year.  Then when the children are out of the house and on their own she could adjust her withdrawal rate continue living comfortably for the rest of her natural life.

I understand that there is a COL adjustment that goes along with SBP and that over the long term SBP might outperform the life insurance option, but it still doesn't seem like a good deal because I could just pay for even more term life insurance and still pay less every month for even more money at the time of my passing.

If there's a hole in my analysis and you have a counter-argument to how I see this, I would love to read it.  I'm throwing my thoughts out there for criticism, to see if I'm on the right track.

Iron Mike Sharpe

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What is the plan for her if you die after the term life insurance policy has expired?  How will she fund her life then?

foobar

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Don't pick a high stress job. Obviously without knowing your skill set (i.e. being a prison wardern is going to be stressful no matter what) it is hard to say much but a lot of the stress at most jobs is the fear of losing it or not getting a goof performance review. I did some consulting work a while back and let me tell you when the company is paying you 175/hr having to sit in those useless meetings was rather pleasant.:) When you can walk away at any time a lot of the annoying stuff at work goes away. Whats the worst they can do? Fire you.

As far as the life insurance versus paying for SBP, what if you out live the policy? For a made up example, you buy it at 40 and die at 71. Your wife (lets say she is 70) lives til 90. Where is the money coming for those 20 years? A 35k roth isn't likely to be enough even with SS benefits to be generating 2k of income.

I would agree that skipping the SBP still makes sense



Yup!  My expenses, on account of trying to save as much as possible, are already quite low (and will stay that way).

Those are valid concerns and things to consider and the closer I get to military retirement the more I'll see how long I need to work to create that cushion.  I can't imagine that I'll ever be completely without any form of income, but sticking with a high stress/high pay job for a year or three after retirement could be a good idea anyway.  If nothing else I can use the extra income via investments to fund a new hobby or something.

MrFancypants

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What is the plan for her if you die after the term life insurance policy has expired?  How will she fund her life then?

If I stop funding my Roth IRA when I quit working (unlikely), if it is assumed that it appreciates with the market (all funds are in market index funds) it will have appreciated enough, that when supplemented with spouse Social Security benefits, if I die one day after my life insurance policy expires she will still have about $2000 a month worth of income at a 4% withdrawal rate.  This is before any additional savings that we will accumulate along the way (it is likely that I'll choose to have some form of low stress employment for the rest of my life).

However, point well taken, and since my last post I've been thinking about that exact scenario and playing with numbers.  I think the answer to the question of whether or not to take that option will be determined by exactly how much money we have in our investment accounts when I separate from the military.

MrFancypants

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Don't pick a high stress job. Obviously without knowing your skill set (i.e. being a prison wardern is going to be stressful no matter what) it is hard to say much but a lot of the stress at most jobs is the fear of losing it or not getting a goof performance review. I did some consulting work a while back and let me tell you when the company is paying you 175/hr having to sit in those useless meetings was rather pleasant.:) When you can walk away at any time a lot of the annoying stuff at work goes away. Whats the worst they can do? Fire you.

As far as the life insurance versus paying for SBP, what if you out live the policy? For a made up example, you buy it at 40 and die at 71. Your wife (lets say she is 70) lives til 90. Where is the money coming for those 20 years? A 35k roth isn't likely to be enough even with SS benefits to be generating 2k of income.

I would agree that skipping the SBP still makes sense

I work in information security, where there is actually quite a lot of room for fun, low stress consultation/contract work.  I agree that the idea that you can walk away from whatever job you're in lowers the level of stress you might feel dramatically.  I look forward to being in that position, because maintaining a higher paying job with a normally high stress level might actually be fun if I know I can step off the train any time I want.

Concerning SBP, I added a little more in my last post....  as stated, I think the decision there will depend on a number of factors that are difficult to predict at this point.  But during that period of time later in my life when term life insurance is no longer viable, it is true that it could be a valuable safety net.

Nords

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Assuming you are from the U.S., the Survivor Benefit Plan (SBP) would probably be beneficial. This article describes it pretty well.
Essentially you forfeit 6.5% of your pension for 30 years. But, if you die at any point in retirement, your wife will keep getting 55% of your pension for the rest of her life.
It's highly likely that my wife will outlive me, however, this is how my initial analysis of the program pans out....  let us say that my pension is $2000 a month (nice round number, easy math, lower that it will actually be).  I'd be paying $130 a month for the eventuality that she can eventually draw $1050 a month.

On the other hand, if I were to purchase a term life insurance policy rated at $500,000 for $40 a month, should I die she could draw $2500 a month for 30+ years.  Add 2% to her monthly withdrawals to account for COL increases and inflation and that half a million still lasts for 27 years.  Supplemented with a paid off house and whatever additional savings we build up, I just can't see how she wouldn't be able to make ends meet, even with children, on $30k+ a year.  Then when the children are out of the house and on their own she could adjust her withdrawal rate continue living comfortably for the rest of her natural life.

I understand that there is a COL adjustment that goes along with SBP and that over the long term SBP might outperform the life insurance option, but it still doesn't seem like a good deal because I could just pay for even more term life insurance and still pay less every month for even more money at the time of my passing.

If there's a hole in my analysis and you have a counter-argument to how I see this, I would love to read it.  I'm throwing my thoughts out there for criticism, to see if I'm on the right track.
One key point about SBP is that it's not your decision-- it's your spouse's decision, so your financial analysis should account for her sleep-at-night comfort.

Second, the federal govt underwrites more than half of the cost of the SBP policy.  No other insurance company can beat the SBP, especially considering that you're only paying into it for 30 years.

Finally, you could possibly go cheaper with a term policy intended to only bridge a period of years between the end of your SGLI and the beginning of your Social Security.  The concern would be what your actual premiums would cost after a possible medical exam and underwriting, so you'd want to verify that you're insurable and at a lower total cost than SBP.

Of course if you have enough assets at retirement to self-insure, then SBP is not worth the price.  But your spouse has the only vote that counts.

In addition to the post linked earlier in this thread, take a look at the slides & papers linked from this post:
http://the-military-guide.com/2011/04/13/more-sbp-details/

If you elect to go the term insurance route, part of that could be done by converting your SGLI to VGLI:
http://the-military-guide.com/2013/10/31/reader-question-on-veterans-group-life-insurance/

RetiredAt63

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One thought - if your wife's condition might get worse over time (especially with children), her cost of living may be higher if you are not around to take some of the load off her, as you do now.   Her expenses might include needing to pay for someone to do the physical things that you are doing now (around here, snow shoveling, gutter cleaning, and so on are typical).

MrFancypants

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Nords, good points and good information.  I would say that communication between myself and my wife on financial matters is quite excellent, and we're always on the same page.  If we decide that SBP is or is not right for us, it'll likely be because we both came to the same conclusion anyway...  based on what the numbers look like when I hit military retirement.

RetiredAt63, your point probably rings the most true, and makes for an excellent argument for SBP.  The issues she has already makes some physical things more difficult than she can handle, and it is absolutely true that it's only going to get worse as she ages.  This does leave me feeling like I need to lean further towards "too much" when it comes to what I leave behind should I pass earlier than expected.  If this means putting off early retirement for a year or three to build up a bigger pile of cash, in addition to life insurance and SBP, then so be it.

aj_yooper

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My wife and I both have pensions which significantly decline upon the death of the primary holder.  We each have term life policies (we are older so a 15 year term @250) to cushion the financial consequences.  In your case, I would buy a term policy now and extend the term as much as you can and increase the payout amount.  The insurance money is tax free and then at payout could be set up in a taxable account so tax consequences could be minimal.

bogart

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Given what you have described (wife's disability, plans for children, etc.), I think this might be one of those decisions it's worth paying a (fee-based) financial planner to advise you on.

After you retire from the military, will your wife (or, heaven forbid, widow) and children be eligible for health insurance through the military?  If not, this expense (again, particularly given what you've described about your wife's situation) might be well worth pricing pretty carefully as you make a decision about what her monthly expenses are likely to be.

MrFancypants

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aj, I'm currently covered under the military's term life insurance program.  I'm basically covered for a half a million dollars at present.  I had intended to purchase another policy just prior to military retirement to ensure that I'm covered.  I'll likely be covered under that until about 70 years old, after that I'm not sure if another policy would be cost effective.

bogart, seeking financial counsel could be a good idea, if for no reason other than to see if our ideas are sane or not.  Upon my retirement from the military my wife's health insurance is basically covered for life, unless she gets remarried, at which point I believe she forfeits those benefits for the duration of that marriage.  This, I believe, is where we're truly blessed.  Not having to apportion a significant amount towards health care costs makes planning a lot less complicated.  Fortunately though, her issues are as under control as they can be.  As she's learned more about how she needs to care for herself (appropriate diet, necessary amounts of exercise, maintaining a certain body composition), her quality of life stays pretty high with a relatively minimal amount of of medical care.

Nords

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aj, I'm currently covered under the military's term life insurance program.  I'm basically covered for a half a million dollars at present.  I had intended to purchase another policy just prior to military retirement to ensure that I'm covered.  I'll likely be covered under that until about 70 years old, after that I'm not sure if another policy would be cost effective.
You're probably already all over this, but check the military-friendly insurance companies to convert your SGLI coverage to VGLI.  The sooner you do this after hanging up your uniform, the less hassle/paperwork/underwriting you'll have to endure.

The conventional wisdom of "term insurance to age 70" is that you're deferring your Social Security benefits until they reach their max.  Then you'll start drawing on them while taking comfort in the fact that your spouse's SS survivor benefits are also maxed out.  At that point your life insurance is no longer necessary and the term policy just expires.

phred

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First off, continue with daily PT to remedy the diet of Cheetos and Mountain Dew.
As for working, besides your IRA, also contribute to spousal IRA.  One traditional safety valve is to purchase term life insurance to cover all expenses until youngest child is 18 or 21.  Then, hopefully still alive, put what would have been insurance premium into income stocks
  The biggie is to involve the wife in the financial planning, and even get her some financial education.  What usually happens is that husband takes care of all matters financial, husband suddenly dies, wife is left with bills and also a big chunk of money, wife doesn't know what to do, wife turns to outsiders for help.  Outsiders give advice which helps feather their own nests; wife is left with little.
  If wife is disabled, she won't be able to take care of a house without spending boatloads of money, and will have to sell it.  Investing in a retirement village to live in may be a better bet. Progression is from the village, then to assisted living, then to total care, then to hospice.  The present house may be an anchor against what is best for her.
  Of course you still have to work.  The recently retired, now around the house all day, frequently drive wives to despair

JennieOG

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I am a big believer in life insurance.  My dad died when my mom was pregnant with me in a boat accident and his life insurance was the only reason we weren't homeless.  One of my best friends just lost her husband to a freak skin infection and he left behind three young kids and no life insurance.  Another friend of mine lost his wife a few years back, she was only 32 and just dropped dead in their house due to a pulmonary embolism.  Stuff happens to EVERYONE and it's better just to be prepared, no matter how healthy you think you are, and life insurance isn't too expensive.   

phred

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agree, if it's term life

JennieOG

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Definitely, only term!

escolegrove

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I am also a big believer in life insurance. My husband is also active duty military. In addition to SGLI he have has 500k through USAA. He is a fighter pilot (ejection seat and high risk) and it only costs us $75 a month for him. This is term for 30 years. We also have insurance on myself in case I die to cover the additional costs of raising a family since i am no longer here.

MrFancypants

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Hey all, I just wanted to thank everyone for the good advice.  I enjoy reading all inputs and have gotten a few other ideas regarding considerations for planning.

Nords, I had intended to get that wrapped up very soon after retirement.  I like USAA, which seems to be about as military friendly as it gets, but I don't mind a physical or two if it means getting a better rate elsewhere.

Phred, my wife and I are on the same wave-length regarding money.  While I do the money "chores" (paying bills, tracking spending to ensure we're on our budget, etc.) I have no doubt she could pick it up pretty easily if need be.  We do talk about our finances and future planning quite a bit.  Also, me and the wife get along pretty well; last year I was able to string together some holiday time off in conjunction with vacation time and had a total of about 30 days off...  she likes me a lot more when I'm not dealing with work stress.

Jennie, I'm sorry to hear that you had to endure that, but I'm happy to hear that everything seemed to work out as well as it could.  Definitely some good reasons to get life insurance.

Nords

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I like USAA, which seems to be about as military friendly as it gets, but I don't mind a physical or two if it means getting a better rate elsewhere.
The whole reason for converting is to make sure that you can obtain insurance.  It's very common for military retirees to have blood pressure that's a little high, cholesterol that's a little high, and maybe a few other zingers lurking in the labwork.  Once an insurance company discovers that during a physical, the information goes into the database for all of the other insurance companies to know about.  You could perhaps obtain a better rate from a physical exam, but there's a significant risk of being turned down by all the insurance companies.

Luckily you can get an early check on this during your retirement processing.  When you have your retirement physical, they're interested in confirming that you're going to make it to your retirement ceremony.  They'll push you through the pipeline as fast as they think they can get away with.

You, on the other hand, have a wonderful opportunity to ask about all of those bodily issues which in the past might have gotten you grounded/surfaced/beached/disqualified.  Be persistent with the docs to make sure you have all these questions investigated and cleared up before you retire-- because otherwise you'll have to do it with Tricare or the VA.  Or even worse, without insurance.

http://the-military-guide.com/2010/11/17/medical-and-dental-exams/

davisgang90

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I'm almost 24 years in active duty.  I have a term policy from Navy Mutual Aid for $1M @ $40 a month.  More than we really need, but if I drop dead in the next few years, it will be a help.

We also have every intention of maxing out the SBP to ensure my wife and autistic son are well provided for after I'm gone.  As Nords has stated, in most cases it is a great deal since the government bears a large part of the cost.

I wrote a blog post on SBP.  http://chartprepping.com/survivor-benefit-plan/