A 70-year-old couple with $1.8 million just received a stage 2 cancer diagnosis. Financial decisions they have 60 days to make

Quick reading

• Filing as single after the death of your spouse can raise your income tax bracket from 22% to 32% and potentially triple your Medicare Part B premiums.

• Couples should immediately audit beneficiary designations, update POA documents, and convert up to $150,000 to Roth while filing jointly while maintaining the lowest rates.

• Without an LTC policy, which is not available after a cancer diagnosis, set aside $300,000 to $400,000 as a dedicated care reserve in short Treasury bonds yielding about 4%.

• Many financial professionals are salespeople who get paid for what they drive, not whether they end up richer. A fiduciary is the complete opposite. The SEC legally requires them to put their interests first. Advisor.com’s free search tool connects you with vetted fiduciaries from firms like Vanguard, Empower, and Edelman in less than three minutes. Look who you meet today.

A stage 2 cancer diagnosis can turn your world upside down. While the first focus should be on health and treatment, retirees often need to make important financial decisions fairly quickly. A short list of decisions can become materially more difficult, or impossible, once treatment escalates or one spouse dies.

Approximately two million Americans are diagnosed with cancer each year, and a significant proportion are between 60 and 70 years old. For many, the majority of their wealth is in pre-tax retirement accounts. Real estate attorneys report common problems: paperwork that hasn’t been touched since the kids were in college, beneficiary forms that name a deceased parent, or a health care power of attorney signed in a different decade.

Financial stress here is filing status. Suppose a 70-year-old couple with $1.8 million in savings receives this diagnosis. A couple married in 2026 gets a standard deduction of $32,200 and remains in the 12% bracket on taxable income up to $100,800, with the 22% bracket extending to $211,400. The surviving spouse, who declares themselves single a year after your death, sees those bands reduced by about half. Income that costs 22% today may cost 32% or more in the future, and IRMAA surcharges on Medicare follow the same logic. The standard Medicare Part B premium in 2026 is $202.90, but joint filers with a modified AGI above $218,000 begin paying surcharges that can raise the total premium above $689 per month in the top tier.

Three decisions to make

1. Confirm the beneficiaries of each account, policy and trust. Get statements for IRAs, any old 401(k) plans, brokerage TOD designations, life insurance, and annuities. Beneficiary designations take precedence over wills. A form naming an ex-spouse or deceased sibling will be accepted exactly as written, regardless of what the will says. Add or update contingent beneficiaries while both spouses can still sign. This is an afternoon project that could avoid a multi-year succession fight.

2. Update healthcare POA, HIPAA authorization, and financial POA. Many couples have forms from a decade ago that name adult children who have since moved away, divorced or stopped speaking. Hospitals will not release information without a current HIPAA disclosure, and the specific banks and brokerage firms where the money is located must agree to a durable financial power of attorney. Call each institution and ask if they require their own form.

3. Consider doing a Roth conversion this year and scheduling another one for next year. Meeting the 12% and 22% brackets while filing jointly converts pre-tax money at a known, lower rate than the surviving spouse is likely to face. Converting $100,000 to $150,000 this year can take money out of the tax-deferred pile without crossing the 24% line or triggering the worst IRMAA levels. Consider scheduling a meeting with a CPA or repayment planner specifically to evaluate the Roth conversion before December 31.