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. 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 in stress and more time enjoying retirement together.
You spend years worrying whether or not you’ll have enough money to last throughout retirement. 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.
Chances are, you have a general idea of what you’d like your retirement to look like and so does your spouse. Have you considered that those ideas may differ? No matter where you are on the road to retirement, it’s time to discuss what you both envision. From the age in which you would like to retire to where you picture living and what type of lifestyle you would like to have, it is all relative. If your ideal retirement includes spending time in a quiet cabin in the woods, but your partner wants to travel the world — then there is definitely room for discussion. The sooner you begin expressing your feelings about retirement, the more time you have time to compare, compromise and plan for a retirement that will make both of you happy.
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.
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 at a time. Alternatively, could retiring one at a time change your relationships dynamic? 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.
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 making together.
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 their 401(k) each month? Maybe it’s time you think about bumping your contribution levels up. 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.
The longer you wait to start claiming your Social Security benefits, the more money you’ll receive every month. For example, if the IRS considers the full retirement age of someone born in 1960 as 67-years-old. However, they do have the option to begin claiming Social Security at age 62. But in doing so, the individual will only be receiving 70 percent of his or her retirement benefit, and their partner will receive 65 percent of the spousal benefits.1 By strategically staggering your claims, you and your spouse can work to maximize your social security benefits throughout retirement.
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 partner 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 partner who is one to two years away. By bringing to light the impacts 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.
At Curran we value service over sales and believe quality service yields happy clients. Below is our 4-step process (the first three steps at no cost to you).
A short introductory call for us to get to know one other. During this call we will discuss your financial goals, concerns and hopes for the future.
In this meeting we will go over your current financial situation, take a deeper look at your goals, discuss your risk tolerances, and collect the data necessary to build a formal proposal.
Based on our data gathering session, our Private Wealth Managers will present you with a custom proposal tailored to your needs. We encourage individuals to take the time to evaluate this proposal.
If you are comfortable with the proposal and choose to invest with Curran, our team will be there every step of the way assisting in opening the recommended accounts and facilitating all necessary parts of your onboarding process.