Morningstar Provides Retirement Guidance for Single-Income Couples
Christine Benz of Morningstar recommends that single-income households prioritize employer 401(k) matches, spousal IRAs, and liquid reserves to ensure long-term financial security.
Financial expert Christine Benz provided a series of strategic recommendations for single-income couples to secure their retirement and reduce financial fragility. Benz advises these households to prioritize meeting employer 401(k) matching contributions and funding IRAs for non-earning spouses to ensure assets continue to compound over time.
To protect against the risks of relying on a single earner, Benz recommends maintaining a liquid reserve equal to one year of anticipated spending. She suggests using money market funds in taxable brokerage accounts for these reserves to avoid the taxes and penalties associated with early retirement account withdrawals. She also promotes a reverse budgeting strategy, where couples establish savings targets first and spend only the remaining balance.
Regarding Social Security, Benz suggests that the primary earner, who is frequently the older partner, consider delaying their filing date. This approach is intended to maximize the survivor benefit for the remaining spouse, ensuring a higher level of lifelong support for the partner who did not earn the primary income.
