If You Died Today, Would Your Spouse Be Able To Reach FIRE?

April 27, 2018

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If you died today, would your spouse be able to reach FIRE?

I know, I know. It’s a morbid question. But, I saw this topic posted on the “ChooseFI” Facebook group recently, and it got me thinking.

As I’m sure you are aware, death is not a topic people enjoy talking about. That’s probably why 56% of American’s don’t have wills. Admittedly, until last year, I fell into that category due to pure laziness on my part.

I mentally went through the figures in my head to see if my wife would be taken care of. It then dawned on me that I was thinking about how she would do without me and didn’t even think for a second how I would do without her. Let me just say I shuddered at the thought.

With all that said, it weighed enough on my mind that I asked my wife, during our regular afternoon walk, what her thoughts were. The question definitely caught her off guard. I had to explain why it was on my mind to put her mind at ease.

Quick sidebar, we normally don’t talk about such heavy stuff on these walks. Thus, unsurprisingly, the question stunned her. Typically, on these walks, we simply recap our days.

After my wife was relieved that I wasn’t going to die immediately, she told me that she thought both of us would be fine if one of us passed. Feeling confident with the way we currently handle our money, she didn’t give it a whole lot of thought. I also think she was ready to move on to another topic.

Digging Deeper

Unfortunately, her quick response was not good enough for me, so I decided to dig deeper for her. I walked her through all of our potential assets down the line and specifically why I thought that she would be fine.

I first reiterated how much life insurance we had. Plus, based on our savings over the years and being about 3 years away from FIRE, we should have more than enough to help cover financial expenses in the future.

Certainly nobody wants to leave their family in a precarious position if something were to happen to them. However, we see it everyday when spouses unexpectedly pass away. Some families scramble to find wills, bank accounts, or even money to cover funeral costs.

The last thing that I want to do is leave my wife in a situation where she would need to make drastic changes. Loss is already so hard to deal with. I have heard of widows who have needed sell their homes and go back to work just to barely make ends meet.

Life Insurance

One of the first things that I did after my wife and I got married was ensure that I had enough life insurance.

A good rule of thumb is to have 10 times your salary for life insurance. That means that if you make $50,000 per year that you should have a $500,000 policy. If you make $100,000, you should have $1,000,000 in life insurance. You get the point.

I would take it a step further though. If you are the main breadwinner, you should assess what your FIRE number is. From there, you should subtract out your assets to determine the number that you really need to cover your spouse.

That means that if you have determined that you and your wife need $1,000,000 in retirement and have currently saved $100,000 for retirement, that you should be shooting to receive a $900,000 life insurance policy.

In other words, if I were to die tomorrow, my wife would be totally taken care of and would reach financial independence.

The Flip Side

Let’s consider a different scenario. What if you, as the main breadwinner, lost a stay-at-home spouse, but as a result, would be able to reach FIRE?

Would you retire immediately, or would you continue working to give some semblance of continuity in your life?

This is where I really began to internalize the scenario on my end.

Since my wife stays at home with our children and I work, I could quit work and stay at home with our children. However, let’s say that the kiddos attended school during the day.

Would I still feel the same way?

Honestly, if my wife passed away, I would probably still continue to work. It might be a crucial way to stay social with my coworkers and remain mentally stimulated. Plus, I wouldn’t want to set a “quitting” example for my kids. If I quit my job, would they want to quit school so that they could stay at home with me?

These are all really tough questions for me to think about. However, I thought it was an interesting topic to ponder over and wanted to learn what my readers thought.

So readers, if you died today, could your spouse reach FIRE? If your spouse died, would you continue to work? Share your thoughts below.