Retirement planning for married couples: should we retire together?

When you picture retirement, you may envision you and your partner traveling the globe or enjoying leisurely days at home. You may be like many couples who wish to enjoy their golden years together, but do you plan to step into the next chapter simultaneously, or will one of you be retiring earlier than the other? It may make more financial sense to take a staggered approach to help maximize your retirement income and provide the savings you need to achieve your desired lifestyle. As you plan for the future, here are several factors to consider that can help you decide what retirement timeline is the best for you and your spouse.

Should couples retire at different times?

To maximize your savings in retirement, planning for one of you to retire at an earlier date than the other may be a beneficial approach. This strategy allows one person to begin collecting retirement income, like pension or Social Security, and the other to continue earning a paycheck and building savings. Many things can influence this decision, including your outstanding debt, current retirement assets, and health status. One of you may wish to retire sooner to enjoy a healthier, more active retirement, while the other has health insurance through a current employer and wishes to keep that coverage.

As you discuss the future, talk about your shared goals, estimated income, and expenses, and what timing makes the most sense for each of you that will support financial success in the years ahead. Once you’re on the same page, there are several steps you can take to create a plan that will match your desired lifestyles while accommodating different retirement timelines.

Retirement planning questions to ask each other

If you find it’s financially savvy for you and your spouse to retire at separate times, it’s important to still be in sync about what each of you expects from retirement. Going through a checklist of questions together can allow you to become informed about each other’s wishes so you can evaluate how to support your personal goals and create a financial plan that helps make these future aspirations a reality.

When would you like to retire?

Your retirement timeline can differ based on personal preferences and financial preparedness. Discuss with each other when you would like to retire so you can set a goalpost and plan accordingly.

How would you like to spend your time?

Some couples may wish to visit family, while others picture cruises to exotic locations. Thinking about how your future self will spend their days can help you estimate the income you’ll need to support your lifestyle and if you’ll have sufficient savings throughout retirement.

What is your ideal retirement lifestyle?

To plan effectively, you both need to know what you expect from retirement. Will you be living a life like you do now? Do you want the same financial freedom, or will you reduce your spending?

Will you work part-time?

When you reach retirement age, you may wish to work part-time, either because you desire to keep working or to earn extra income to support your daily expenses. Discuss with your partner if one or both of you plan to work after retirement, what that looks like, and how long you wish to be employed.

Where will you live in retirement?

Many couples choose to age in place, while others wish to downsize or move to a retirement community. Be sure to consider home and yard maintenance, potential renovations needed to make your house more accessible, and whether your current location is close to necessary health care providers.

When will you claim Social Security benefits?

An important part of the retirement planning conversation is determining when each of you will claim Social Security. Remember, you can technically start claiming your benefits at age 62. Doing so may alter the nature of your benefits, so be sure to review Social Security information in detail.

Once you’re on the same page about who should retire first and who should continue working a little longer based on your financial goals and anticipated lifestyle, it’s time to set a target date to help keep you both on track. Meeting with a financial professional can help you review your assets and future goals and determine a sensible time for each of you to retire.

How to prepare when your spouse retires at a different time

When a couple retires at different times, you may want to decide how much of your expenses will be paid via the working spouse’s income and whether the retired spouse will need to dip into your retirement savings account to supplement expenses. If you delay claiming Social Security benefits, you can help maximize that money. Spousal benefits can be as high as 50% of your benefits depending on age (the longer your spouse waits beyond age 62, the more they can collect). Again, the spousal benefit may be higher than what your spouse earns from their benefits, so it’s a good idea to work through the numbers and determine how to make the most of your retirement benefits. It’s a good idea to review spousal options on the Social Security Administration website.

How do Social Security benefits work for spouses?

When you file for your retirement benefits, your spouse may be eligible for use based on your earnings if he or she is at least 62 years of age or has a dependent child in their care. If your spouse is eligible for a benefit based on his or her earnings and that amount is higher than the spousal benefit, they will receive it. These will be important calculations as you plan for the future and determine your retirement timeline.

Maximizing spousal retirement benefits

Since Social Security is likely a part of your retirement income strategy, figuring out how to maximize spousal benefits is essential. You’ll want to compare your and your spouse’s benefit estimates to determine when to collect Social Security. In most cases, the higher earner should hold off claiming Social Security to maximize their benefit and potentially increase the spousal benefit amount. Spousal benefits can be as high as 50% of your benefits depending on age (the longer your spouse waits beyond age 62, the more they can collect). Again, the spousal benefit may be higher than what your spouse earns from their benefits, so it’s a good idea to work through the numbers and determine how to make the most of your retirement benefits.

Can I collect spousal benefits before I retire?

It is possible to collect spousal benefits even if you aren’t retired, as long as you’re 62 or older or are caring for a dependent child. However, if you haven’t yet reached full retirement age, your spousal benefits will likely be reduced since it pays to wait longer before collecting them.

By coordinating your benefits as a couple, you can create a strategy that maximizes retirement income and financially supports your needs and goals. Even if you and your spouse have differing ideas for how you’d like to spend retirement, you can create an income plan that supports each other’s dreams and vision for the future. Meeting with a financial professional can offer valuable guidance in determining a retirement timeline that makes the most sense and can help you explore how annuities and life insurance could supplement your financial portfolio. By being partners in your retirement planning, you and your spouse can be ready to enter the next chapter with excitement and confidence.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

B3-NA-11-23