Married couples don’t always plan to retire at the same time. According to a recent study by Fidelity, 48% of couples disagree on the age at which they plan to retire. For others, circumstances like an unexpected job loss or health issue push spouses onto separate retirement schedules.
My wife, Diana, and I have discussed this issue on numerous occasions. While our ages are similar, she plans to retire several years before me. But we don’t see that as an obstacle. I enjoy working with and helping my clients. I plan to continue managing Apprise for as long as I can. We have discussed how I can do this while we also get to enjoy the quality of life in our later years that we desire. Fortunately, since the pandemic started, people have become even more willing to work virtually. Working virtually will allow me to do the things Diana and I want to do once she retires. At the same time, I will still be able to take care of Apprise’s clients.
When one spouse retires and the other keeps working, the couple must understand the effects on their finances, their schedules, and their long-term goals. These are the main issues Diana and I have discussed when we consider our future.
Here are three important conversations that couples should have about syncing two retirements to a shared Life-Centered Financial Plan.
1. Discuss your reasons and goals.
If you and your spouse could both comfortably retire together, it's important to ask each other, Why? And why not? What are the core money and life issues that put you on different retirement timelines?
- Does one of you love your job and the other can't wait to stop working?
- Is one of you worried about running out of money in retirement?
- Are you picturing a blank weekly schedule you don't know how to fill?
- Are you worried you're going to drive each other crazy?
Retiring – or not retiring – isn't necessarily going to solve any of these issues. Talk to each other about the things you want to accomplish separately and together in the next part of your lives. Take out a blank calendar and plot out what your Ideal Week without work might look like. And if you're not on the same page about your progress towards financial goals, schedule an appointment with your financial advisor. Hopefully, these conversations will give both of you some clarity about the best time for each of you to retire.
2. Discuss schedules and responsibilities.
Even if the working spouse chooses to keep working, seeing their retired spouse lounging around enjoying additional recreational activities could breed resentment. Have a conversation about who handles what at home. The retired spouse might take up a few extra responsibilities, like grocery shopping and cooking meals. If the retiree is handy, he or she might make repairs and remodeling projects part of their new retirement routine. And scheduling a weekly lunch date with your working spouse could be a nice break for both of you.
But the new retiree also shouldn't feel guilty about enjoying retirement. If money isn't an issue and the working spouse regrets missing out on weekday tennis and sprucing up the spare bedroom, maybe it’s time to make retirement a shared life transition.
3. Review your financial plan.
Retiring separately can create some complications when it comes to healthcare. If the retiring spouse is leaving their employer-subsidized plan before age 65, he or she won't be eligible for Medicare. That means the retiree may have to jump on a plan offered by their spouse's employer, or purchase healthcare on their state's marketplace.
Healthcare is just one line item on your household budget that might go up as your monthly income goes down. Are you and your spouse prepared to tighten the family belt? Or are you going to spend more on recreational activities now that one of you isn't working? Are you considering other sources of income, such as taking Social Security before full retirement age, making early withdrawals from your retirement accounts, or working part-time?
Much like deciding when to retire, there are no right or wrong answers to these questions. What's most important is coordinating every part of your Life-Centered Financial Plan so that both you and your spouse get the best life possible from your money in retirement.
This might be a good time to consider your retirement plan. If you and your spouse would like some help working through the above questions, let's schedule an appointment. That meeting should help both you and your spouse work through these issues and find a plan that will get you both excited about retirement.