The Survivor Income Gap
What Happens to Income When a Spouse Dies
When One Paycheck Stops
By Jared Prazen | Secure Retirement Planners
This is a video I'd encourage couples to watch together, because it's about a conversation most couples never have.
Most retirement plans are built around the two of you. But at some point, almost every married couple becomes a household of one, and the income picture can change much more than people expect. In this video, I walk through a realistic example and the one decision that can make the biggest difference for the person left behind.
A well-prepared couple
Our example couple is 66 and 64. They've saved $1,000,000, with half going to lifetime income and half invested. Between them they get $5,000 a month from Social Security, and he has a $2,000-a-month pension with a 50% survivor benefit. Together, their income is about $144,000 a year, or about $134,000 after federal taxes.
Three hits when one spouse passes away
Income drops. Social Security pays the survivor the larger of the two checks, not both, so her $1,800 a month stops. His pension drops to half. Her income falls by $33,600 a year, about 23%.
Most of the bills don't drop by half. The mortgage or rent, property taxes, insurance, utilities, and the car mostly stay the same.
Taxes can go up. Starting the year after his death, she files as a single taxpayer. Her income fell by $33,600, but her federal tax rose by about $2,800, and she moved from the 12% bracket to the 22% bracket. Medicare surcharges also start at about half the income for a single filer.
Put together, her after-tax income falls from about $134,000 to about $97,600: 27% less to live on, with most of the bills unchanged. And that's the version where they made good decisions.
The decision that matters most
When you set up lifetime income, from a pension or an annuity, you usually choose between single-life and joint-life payments.
| Same $500,000, income from his age 67 | Single-life (his life only) | Joint-life (both lives) |
|---|---|---|
| Annual income while both are alive | $43,740 | $39,960 |
| Annuity income after his death | $0 | $39,960 |
| Her after-tax income, the year after | About $67,400 | About $97,600 |
| Drop from their income together | About 51% | About 27% |
Single-life paid $3,780 a year more while he was alive. It would cost her about $30,000 a year for the rest of her life.
Three things every couple should know
Which of your income sources stop, shrink or continue when one of you passes away.
What the survivor's taxes will look like, and what can be planned while you still file jointly.
Single-life vs. joint-life is a decision for both of you. The bigger number isn't always the better one.
A question worth answering
If one of you passed away next year, do you know what the other's income would be? If you're not sure, that's exactly the conversation we have with every family we work with.
Keep watching: What happens to your growth money in the next downturn?
About the author:
Jared Prazen is a financial advisor with Secure Retirement Planners, focused on retirement income planning for people approaching or already in retirement. He helps families build plans that cover their essential expenses with predictable income, so the rest of their money can be managed with a clear plan.
Hypothetical couple for illustration only. Lifetime income from hypothetical indexed annuity illustrations with an income rider ($500,000; ages 66 and 64; income from his age 67; 0% interest assumed; dated October 17, 2026). Portfolio withdrawals assumed at 4% of $500,000. Federal income tax only, 2026 brackets and standard deductions including the temporary senior deduction; assumes pension, annuity and portfolio income are fully taxable. Not tax advice. Guarantees depend on the claims-paying ability of the issuing insurer.
© Copyright 2026. Secure Retirement Planners All rights reserved. Privacy Policy. Term of Use.
This material is provided for educational purposes only and does not constitute individualized financial, legal, or tax advice. Investment strategies involve risk, including possible loss of principal. Availability of strategies depends on individual suitability and applicable regulations. Insurance products, if applicable, are issued by properly licensed insurance companies. Guarantees are based on the claims-paying ability of the issuing insurer.