Does Your Retirement Plan Work for One? A Quick Self-Check for Couples

Most couples, whether already retired or still working toward retirement as pre-retirees, have never answered this question out loud.

If your spouse died this year, does your retirement income plan still work?

Not emotionally. Financially. Month to month.

A 2022 survey by LIMRA found that 60 percent of surviving spouses reported their financial situation was worse than expected in the first two years after losing a spouse. The biggest surprise was not the emotional difficulty. It was the financial gaps they had never seen coming.

This article is a five-question self-check. You and your spouse can work through it in about 20 minutes. It will not cover every detail of your financial picture. What it will do is surface the gaps that matter most, quickly, so you know whether a closer look is worth having.

Question 1: Do you know which income sources would continue if your spouse died?

Social Security, pensions, and annuities each handle the death of a spouse very differently. Knowing which ones stop and which ones continue is the starting point for everything else.

Social Security pays the survivor the larger of the two checks. The smaller check stops permanently. For a couple receiving $4,200 combined, the survivor may keep only $2,400. That is a 43 percent drop in Social Security income before a single expense changes.

Pensions vary widely. Some pay 100 percent of the benefit to a surviving spouse. Some pay 50 percent. Some stop entirely if the employee chose a higher single-life payout at retirement. Many couples chose a higher monthly payout years ago without thinking through what the survivor option meant. According to the National Institute on Retirement Security, more than a third of pension recipients choose payout options that reduce or eliminate survivor benefits in exchange for a larger check while both spouses are alive.

Annuities depend entirely on the payout option selected at the time of purchase. A joint-and-survivor annuity continues paying the survivor. A single-life annuity stops at death.

Question 2: Has the higher earner in your household compared their Social Security benefit at 62, 67, and 70?

Most Social Security conversations focus on one person’s benefit. But for a married couple, the higher earner’s Social Security decision also sets the permanent income floor for the surviving spouse.

The gap between claiming at 62 versus waiting to 70 can be significant. By federal law, Social Security benefits grow by approximately 8 percent per year for each year a person delays past their full retirement age, up to age 70. (Source: Social Security Administration, Delayed Retirement Credits.) For a person with a full retirement age benefit of $2,500 per month, claiming at 62 may reduce that benefit to approximately $1,750. Waiting to 70 may increase it to approximately $3,100.

The difference between the $1,750 and the $3,100 is not just a personal income question. It is the difference between a survivor living on $1,750 per month for the rest of their life versus $3,100. Over 20 years, that gap is substantial.

Question 3: Have you reviewed all beneficiary designations in the last three years?

Here is a fact that catches many families off guard. Your will does not control what happens to your retirement accounts, life insurance policies, or annuities. Those assets pass by beneficiary designation, and the form on file at the institution overrides whatever your will says.

A beneficiary designation filled out 15 years ago may list an ex-spouse, a parent who has since died, or children whose circumstances have changed significantly. The account goes where the form points. Not where you intended. Not where your will directs.

In Pennsylvania, this matters for an additional reason. Pennsylvania inheritance tax is 0 percent on transfers to a surviving spouse. But assets that pass to children are taxed at 4.5 percent. An outdated designation that routes a 401(k) directly to children rather than through the surviving spouse may create an unnecessary tax bill on top of an already difficult year. (Source: Pennsylvania Department of Revenue, 2026 Inheritance Tax guidelines.)

Question 4: Do you know how your Medicare costs could change on a single-person income?

Medicare charges higher premiums to individuals whose income exceeds certain thresholds. These are called income-related monthly adjustment amounts. In 2026, the threshold for a married couple filing jointly is $218,000. For a single filer, it is $109,000.

That difference matters more than most couples realize. A household whose combined income sits at $180,000 per year may be well below the joint threshold. But if the surviving spouse continues to receive a pension, IRA distributions, and a single Social Security check, that surviving spouse’s individual income may push above $109,000. The result: higher Medicare premiums on less total income, starting the year after the income is earned.

Medicare uses income from two years prior to set the current year’s premiums. That means income earned in the first year of widowhood may increase Medicare costs two years later, when the financial adjustment is already difficult enough.

Question 5: If your portfolio dropped 20 percent the same year one check stopped, do you know which account the survivor would draw from first?

A withdrawal plan built for normal conditions may not hold when two things go wrong at the same time. Losing one Social Security check and experiencing a portfolio decline are both manageable on their own. Together, they create a very different challenge.

Research from Vanguard on investor behavior shows that surviving spouses are more likely to make reactive portfolio decisions in the first 24 months after a loss, particularly when income needs are not clearly covered by guaranteed sources. The households that tend to hold their financial structure together are the ones with a written plan that says: in a down market, here is where income comes from first.

The answer to this question is usually: draw from cash and short-term accounts first, preserve the long-term equity portfolio, and avoid selling growth assets during a decline. But the specific sequence depends on which accounts exist, their tax treatment, and how much guaranteed income covers essential expenses.

How to Read Your Results

Why This Conversation Is Worth Having Now

Given what we covered this week about how income, taxes, and Medicare costs all shift when one spouse dies, this self-check is designed to help you see where your specific plan stands.

The best time to close these gaps is while both of you are here, calm, and in a position to make thoughtful decisions. Not in the middle of grief, when every financial choice feels permanent and urgent.

Research from T. Rowe Price published in 2024 found that surviving spouses who had worked through a survivor income review with a financial advisor before the loss reported significantly higher financial confidence in the two years following the death compared to those who had not. The plan itself was not the only difference. Knowing the plan existed made a meaningful difference in how those families navigated one of the hardest transitions in a person’s life.

If two or more of these questions raised something you have not addressed, that is the conversation worth having before it becomes permanent.