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Ask the Expert: Should we use IRA distributions or savings for home repairs?

My husband and I take required minimum distributions (RMDs) from our retirement accounts, but we don't need them to live on. He reinvests his, and I put mine into an interest-bearing account. Now we need to do some repairs on our house. I think we should use this year's RMDs to pay for them. I feel the IRAs will be somewhat replenished by their investment earnings next year. He wants to use our savings account instead. I'm not amenable to that because I'll need the cash if something suddenly happened to him. Any suggestions?

One of the biggest challenges people face in retirement is the fear of outliving their savings. Even retirees with substantial investment accounts worry about running out of money. It sounds as if you and your husband have addressed this natural concern in different, but equally valid, ways.

His priority is to maintain and potentially increase the total balance of his investment holdings. He does that by reinvesting his RMDs in a taxable account.

Your priority is protecting yourself in the worst-case scenario. You've put your RMDs into a savings account that doesn’t fluctuate with the market or require any financial savvy to manage.

If you explain to your husband why that's so important to you, he may agree to leave your savings untouched. If not, a compromise might be to divide the cost of the repairs between this year’s RMDs and the savings account, agreeing that it’s a onetime occurrence.

What's really important going forward is that together, you create a financial plan that specifically addresses your anxiety about how you'd manage without him. That plan should include a second savings account earmarked for expenses like home repairs.

The bottom line

Every retired couple should discuss and create a plan that addresses both spouses' financial priorities.

More information

kitces.com/blog/age-banding-by-basu-to-model-retirement-spending-needs-by-category/

ssa.gov/planners/survivors/

TO ASK THE EXPERT Send questions to Ask the Expert/Act 2, Newsday, 235 Pinelawn Rd., Melville, NY 11747, or email act2@newsday.com. Include your name, address and phone numbers. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own consultants for your specific needs.

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