Retirement planning for couples

For many couples, retiring at the same time just makes sense, plain and simple.

You share the pleasure of starting this new chapter of your life together, and you enjoy more time together in retirement. A synchronized retirement can be idyllic.

But the picture becomes less rosy if one spouse makes a sacrifice to line up the retirement dates.

Say one spouse has recently become a mentor in the workplace as the planned retirement date nears and feels reluctant to retire just now. Or, to synchronize retirement dates, an older spouse must retire later than he or she would like, with fewer retirement years of being fit and energetic.

It’s important to be sure that retiring together time works for both partners.

What are the pros and cons of retiring at the same time?

A significant gap is the most obvious reason for a staggered retirement, but it’s not the only reason.

One spouse may retire earlier because of a medical condition, to help an elderly parent in need of care, or because of job termination and an attractive severance package.

Other individuals may decide to retire later than their partner because they enjoy friendships at work, want to fulfill career goals, or feel their identity is tied to their profession.

Staggered retirement dates can bring considerable financial benefits, even if money’s not the reason for retiring apart. If the working spouse has group life and health benefits from an employer, the couple saves on insurance premiums and healthcare expenses.

Working longer also means more savings for an enhanced retirement lifestyle, and the already retired spouse can delay collecting government pension and possibly delay drawing retirement income.

But a staggered retirement can present psychological challenges. The working spouse may become envious of the retiree’s lifestyle. Or the retired spouse may want to travel or move and feel held back by the other spouse’s work commitments.

Communicate and compromise with your partner

What do you do if you and your spouse have differing viewpoints on when to retire?

You may be able to find a solution through compromise.

Say that a couple had planned to retire together this year, when one spouse is 62 and the other is 56. But now they decide they want more savings. The older spouse suggests still retiring at 62, with the younger spouse working four more years to retire at 60. The younger spouse presents a compromise, which they agree on. They can still get four more years of income and keep their original idea of retiring together by each working two more years.

Or take a situation where one spouse is already retired while the other is working. The working spouse is enduring stress at work and begins to feel that the arrangement is unfair. Together, they decide to scale back their retirement lifestyles so that the working spouse can retire now.

Whatever your situation may be, it’s best to communicate openly. 

Feel free to involve us in your decision-making process — the financial implications can play a key role in determining when you retire.