Insights
Published August 24, 2026 by Harbor Point Advisors
There is an exercise I do in meetings that takes about four minutes, and in fifteen years I have never had a couple tell me they had done it before.
I ask whoever handles the money to write down what comes in every month. Not the balances. The income. Then I ask them to cross out the lines that stop if they die first.
The room usually goes quiet somewhere around the second line.
It is not a dramatic exercise. There is no software, no projection, no assumption about market returns. It is subtraction. But it produces a number that most couples have simply never seen, and the reason they have never seen it is that nothing in ordinary financial life ever asks for it.
Think about every document that describes your finances.
Your Social Security statement shows two benefits. Your tax return shows one joint figure. Your account statements show a household. Your budget, if you keep one, covers both of you. Every single one of them describes the two of you as a unit, because that is what you are.
Nothing you receive is written for the version of your household with one person in it. So the arithmetic never gets done, right up until the day it is not hypothetical anymore, and by then whoever is doing the subtraction is doing it alone and grieving.
That is the whole argument for doing it now, on a random Tuesday, while it is just numbers on a page and both of you can still do something about what you find.
Four lines. Take them one at a time.
The smaller Social Security check stops. A surviving spouse at full retirement age generally receives the higher of the two benefits, not both. So look at your two benefit amounts, find the smaller one, and cross it out. That is gone.
The pension depends entirely on an election made years ago. This is the line that surprises people most. If a single life payout was elected at retirement, the pension stops completely at the retiree's death. If a joint and survivor option was elected, it continues at some percentage, commonly 100, 75, or 50. Most people are not certain which they chose. Find the paperwork or call the plan administrator, because the difference between those two answers is often the largest number on the page.
Earned income stops. Consulting work, a part-time job, board fees, rental income you personally manage. If it depends on one of you being alive and working, it ends.
Withdrawals from retirement and investment accounts generally continue. The account passes to the surviving spouse and the income keeps coming. This is the line that holds, and it is worth noticing that in most households it is the only one that does.
Here is a household to work through. The figures are round and illustrative, chosen to show the shape of the problem rather than to describe anyone in particular. Yours will be different.
A couple, both seventy. Their monthly income:
That is $8,650 a month coming in. Against about $6,800 a month going out, which leaves them comfortable and is why nobody has ever suggested this was a problem.
Now he dies first, which is statistically the likelier order.
Her income is $4,600 a month.
$4,050
Notice what did most of the damage. It was not Social Security. It was the pension election, a form signed once, years ago, in the week before retirement, usually without anyone drawing this picture first.
They do, and this is the honest counterweight, so let me give it properly rather than skipping past it.
Some costs genuinely fall. One person eats less. One less phone line, one less Medicare premium, often one less car eventually. Clothing, travel, hobbies, the second set of everything.
But look at what does not move. The property tax is the same. The homeowners insurance is the same. The roof costs the same to replace. Heating a house does not get meaningfully cheaper because one person is in it. The mortgage payment, if there is one, is identical to the penny.
In practice, a surviving spouse's expenses tend to fall by something in the range of ten to twenty percent, not by half. In our example, say the $6,800 becomes $5,900.
$1,300
Income falls off a cliff. Expenses walk down a gentle slope. The gap between those two lines is the entire problem, and it is why "she'll need less" is a comforting thought that does not survive contact with a calculator.
One more thing this example understates. Her filing status changes to single the year after his death, which means narrower brackets and roughly half the standard deduction. That $1,500 IRA withdrawal is taxed harder than it was. So the after-tax gap is somewhat wider than the numbers above. I wrote about that mechanism separately in the widow's penalty.
You can do this at the kitchen table tonight. It needs no software, no appointment, and no decisions.
Start with the two Social Security benefits. Write both amounts down and cross out the smaller one. That is the first thing to go, and it is the piece most people already half expect.
Then find out what election is actually on the pension. Not what you believe you chose. What the paperwork says. Call the plan administrator if the file is lost, and ask them to tell you in dollars what a survivor would receive. In a lot of households this single answer swings the whole result, and it is the line people are most often wrong about.
Now cross out anything that depends on one of you being alive and working. The consulting income, the part-time work, the board seat. If it stops when the person stops, it belongs on the subtraction side.
What remains is the survivor's income. Add it up, then set it against what you honestly believe one person would spend in that same house. Be realistic rather than hopeful about that second figure. The house does not become cheaper to own.
Run it in both directions, because either of you could be the one left. In many households the two answers are nothing alike, and which direction turns out worse is frequently a surprise to both people at the table.
Whatever number you land on, it has stopped being a shapeless worry and become a known quantity. That is worth something by itself. For a fair number of couples the exercise ends right there, because the answer is that the survivor would be fine, and knowing it is the entire benefit.
I have watched a lot of couples reach the bottom of that subtraction, and the reaction is rarely panic. It is more often a kind of quiet recognition. Somebody says, "I always sort of knew that."
What changes afterward is the conversation. The spouse who does not handle the money stops carrying a vague unease she could never name and starts asking specific questions. The one who does handle it stops privately hoping it works out. They start planning for two lives instead of one plan and one assumption.
And the practical decisions get easier, because you are no longer arguing about abstractions. A pension election is not a philosophical question once you can see what each option pays the survivor. Whether to delay the larger Social Security benefit stops being a bet on your own longevity and becomes a decision about the floor under whoever lives longer. Whether a policy or a guaranteed income stream is worth the cost is answerable once you know the size of the hole it would fill, and any guarantee there rests on the claims-paying ability of the issuing insurance company, which is worth understanding before you commit to anything.
Those are the solution-side questions, and I walked through the options in a separate piece on protecting your surviving spouse's income. But none of it means much until you have done the subtraction, because until then you are solving for a number you have not measured.
The exercise takes four minutes. It costs nothing. It requires no products, no advisor, and no decisions on the spot.
And it can only be done usefully while both of you are here to look at the answer together. Afterward it is not an exercise. It is a bank statement.
If you would rather not do it alone, or you want someone to check your arithmetic and tell you plainly what the number means, that is a conversation and not a commitment. Some couples run it, find out the survivor is covered, and we shake hands. Others find a gap they would like to close. Both are real outcomes and I am glad to sit through either one.
There is more on how the income side fits together on our retirement income planning page whenever you want it.
No pressure, no obligation, just clarity.
This article is provided for educational purposes only and does not constitute tax, legal, or investment advice. Tax rules described reflect current federal law and are subject to change; consult your own tax professional regarding your specific situation. Social Security and pension provisions vary and are governed by the relevant plan documents and current regulations; confirm your own pension election with your plan administrator. Product guarantees are subject to the claims-paying ability of the issuing insurance company. Insurance and annuity products are subject to underwriting, fees, charges, surrender periods, and limitations described in the policy or contract. Dollar figures shown are hypothetical illustrations used to demonstrate a concept and are not a projection or guarantee of any specific result. Adam Stevens is a licensed insurance professional. Harbor Point Advisors.
Harbor Point Advisors. Bozeman, Montana. (406) 539-3423. Serving clients nationwide.
Harbor Point Advisors is an insurance agency. Adam Stevens is a licensed insurance professional, license number 3004330767, NPN 22297129. Not a registered investment adviser or broker-dealer.
This article is educational and is not individualized investment, tax, or legal advice.