Retiring as a Couple: Important Factors to Consider

Retirement can often feel like a reward at the end of the finish line. You’ve worked hard for years, saved diligently and now you’re ready to relax, travel or take up some new hobbies. But if you have a significant other, it’s important to approach this life transition as a partnership through open communication and honest dialogue. By discussing important emotional and financial factors ahead of time, you can hopefully spend less time stressing and more time enjoying retirement together.

Emotional Considerations About Retirement

You spend years worrying whether or not you’ll have enough money to last throughout retirement. But it’s important to remember that retirement isn’t just about the savings. It’s about enjoying family and friends and spending time doing what you love. As you and your spouse are preparing for retirement, here are a few emotional considerations to keep in mind.

Seeing Each Other’s Big Picture

Chances are, you have a general idea of what you’d like your retirement to look like. But have you considered the fact that your spouse probably does too? No matter where you are on the road to retirement, it’s time to discuss how you both envision it going. It’s important to talk about what age you want to retire, where you picture living and what type of lifestyle you’d like to have. If your ideal retirement includes spending time in a quiet cabin in the woods, but your partner wants to travel the world — then you definitely have some discussing to do. The sooner you begin expressing your feelings about retirement, the more time you have to compare, compromise and plan for a retirement that will make you both happy.

Giving Your Spouse Room to Breath

For so many people, their identities have been tied up in their career. Work is often a huge part of their lives. Once that’s gone, retirees are often stuck trying to figure out who they are again. This can include developing new routines, trying out new hobbies and making new friends. The process, while exciting, can easily overwhelm even the most prepared retirees. As a couple, be mindful of this transition period whether you’re going through it together or one at a time. Offer space and support, and be patient with your spouse if they seem insecure, unsteady or upset.

Retiring Together or Separately

While choosing whether or not to retire at the same time can have obvious financial considerations, it’s important to remember what kind of impact this may have on your marriage or partnership as well. If you retire together, will you both be feeling unsteady and unsure about your new routines and independence? Perhaps it’d be better if one of you makes the transition first. Alternatively, could retiring one at a time change your relationship dynamic or cause resentment? It’s easy to see how you could become jealous of a spouse who no longer has to set an alarm or dress business casual every day. Discussing these concerns beforehand can help you and your spouse decide which option may work best for you, your partner and your marriage.

Financial Considerations About Retirement

As you’re figuring out what type of retirement you and your spouse want to have, you can’t ignore the basic financial considerations you should also be deciding upon together.

Saving Together Or Separately

While you may think about you and your partner’s retirement savings as being two separate entities, you should remember that, ultimately, they need to be working together toward the same goal. When possible, balance out each other’s savings strategies to keep your mutual goals on track. Is your spouse contributing a lesser amount to her/his 401(k) each month? Maybe it’s time you think about bumping  up your contribution levels.  If your spouse doesn’t work or contribute to any retirement savings accounts, there are measures you can take to help accommodate these circumstances as well. In general, you should consider all of the retirement planning options that both parties have available to them by their employers or other institutions, and coordinate them in a way that helps maximize your retirement savings and future income together.

Staggering Your Social Security Claims

The longer you wait to start claiming your Social Security benefits up to a maximum at age 70, the more money you’ll receive every month. For example, the IRS considers the full retirement age ("FRA") of someone born in 1960 as 67-years-old. However, that individual has the option to begin claiming Social Security at age 62. But in doing so, the individual will only be receiving 70% of his or her retirement benefit, and the spouse will receive 65% of the spousal benefits .¹  Since the maximum spousal benefit is 50% of  the  benefit the worker would receive at FRA, the percent reduction (35% in this example) for the spouse would be applied after the automatic 50% reduction,¹  which results in a considerable reduction in benefits for both spouses, if relying on the earnings record of just one spouse.   By strategically staggering your claims, you and your spouse can work to maximize your total Social Security benefits throughout retirement.

Handling Age Gaps

It is not uncommon to be 10, 15 or 20 years apart in age. But when it comes to retirement, age gaps in a marriage can mean there are a few additional considerations to discuss. For example, the older party will likely be required to begin making withdrawals from retirement accounts before his or her spouse needs to. Additionally, if the age difference is fairly significant, one partner may have an entirely different investment strategy than the other. If you’re at least 15 years out from retirement, you may opt for a higher risk portfolio than your spouse who is one to two years away. By bringing to light the impact an age gap can make in your retirement strategies early on, you and your spouse can work strategically to maximize your retirement income potential.

With plenty of preparation and open communication, retiring as a couple can be an exciting and rewarding experience. As you both focus on saving strategically, don’t forget to take into consideration what it is you’re hoping to get out of your retirement together.

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This content is developed from sources believed to be providing accurate information.  It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.