Back when people from my parents' generation were first planning their lives together, most married couples looked forward to working hard for a few decades, buying a house, raising a family and then retiring together while they still had enough money and energy to travel and pursue favorite hobbies.
Some couples do manage to pull this off and thrive; but for many others, any of a host of obstacles can block their ability to retire at the same time. For example:
Among couples who have managed to save enough to retire together, when it comes time to pull the trigger many realize they haven't fully agreed on where or how to retire; or they discover that their wishes have diverged over the years. This can put tremendous strain on a marriage if you're not willing to compromise and talk things through.
Long before you actually retire, ask yourselves:
Even before asking those tough questions, you already should have begun estimating your retirement income needs. Some financial planners suggest people may need 70 percent or more of pre-retirement income to maintain their current lifestyle, but it's difficult to generalize. These online calculators can help:
After you've explored various retirement scenarios, consider hiring a financial planner to help work out an investment and savings game plan, or to at least review the one you've devised. If you don't have a personal referral, good resources include the Certified Financial Planner Board of Standards, the National Association of Personal Financial Advisors and the Financial Planning Association.
Make sure you understand the financial impact of the age at which you begin drawing Social Security benefits. To make ends meet, many people begin drawing reduced benefits before reaching their full retirement age (65 for those born before 1938 and gradually increasing to 67 thereafter). This can have several costly consequences:
Along with the financial impact retirement will have on your marriage, keep in mind that this may be the first time that you've been together, day in and day out. Many people are so consumed by their jobs that they haven't taken time to develop outside interests and hobbies. Well before retirement you and your spouse should start exploring activities and networks of friends you can enjoy, both together and independently. Consider things like volunteer work, hobbies, athletic activities or even part-time employment if you miss the workplace interaction and need the money.
And finally, if your plan is to have one spouse continue working for a while, try living on only that one salary for a few months before retiring as an experiment. This will give you an inkling of how well you'll do financially and whether you might both need to keep working to amass more savings.
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.
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