When you and your partner first met, you probably talked about anything and everything: Your hopes and dreams, your likes and dislikes, your family and friends.
But did you discuss your retirement plan?
If you’re like many couples, the extent of your planning may be the dream of growing old together in side-by-side rocking chairs. While it’s a romantic image of retirement, it’s not a particularly practical one.
Luckily, retirement planning for couples can be as easy as lounging on the porch. These tips can help you and your spouse work toward a comfortable, stress-free retirement—together.
The Importance of Communication and Collaboration
The most vital tip of retirement planning for any married couple is communication. Transparency about the past, present, and future is key, especially when it comes to your finances and aspirations.
If you’ve never stopped to have an in-depth discussion about retirement, now is a perfect time. And your conversation about a retirement saving plan shouldn’t be a one-time deal, either. After your initial chat, you’ll ideally set aside time to check in once per year.
Whenever you explore your retirement plans together, you may want to touch on:
- Your timeline – First and foremost, what is your ideal retirement age? And will you both retire at the same time? How long the two of you work will impact your overall finances, but it will also affect your retirement assets and retirement benefits. For example, you can start drawing from Social Security benefits as early as age 62, but you’ll receive slightly less each month if you do.1
- Your goals – Before you talk about your financial objectives, think about your overall life goals. Where do you see yourselves in five, ten, or even 25 years? Do you want to travel the globe? Or are you happier in your hometown? Answers to questions like these will inform your budget.
- Your budget – Finally, with all the rest of the puzzle pieces in place, you can work to determine how much you’ll need to save to retire comfortably. By working backward from how much you’d like to have, you can calculate how much you’ll need to save each month to retire comfortably.
Communication with others is equally important. Conversations about your retirement savings plan can sometimes be tricky to navigate on your own—especially the money side of things—so sitting down with a financial advisor can be beneficial. A professional knows the right questions to ask and can help point you in the right direction.
Financial Planning for Couples: 3 Tips & Tricks
If you’re not yet ready to meet with a financial advisor, these three suggestions can be an excellent starting point for retirement planning.
#1 Invest First, Spend Second
For many couples, saving money for retirement means setting aside whatever’s left after bills, groceries, and entertainment, potentially for building a nest egg. However, if you hope to thrive post-work, you may want to set money aside for retirement first, then spend. When you do, you can guarantee you’ll have savings for later.
Of course, a crucial part of this tip is investing. Stashing your hard-earned cash in a bank account isn’t enough. Inflation and retirement are inextricably linked. With inflation, your balance will be worth less and less each year. To keep up with inflation (and even grow your money), you have to invest.
Despite the importance of investing, only 18.2% of working-age adults have an IRA or Keogh account.2 If you and your spouse aren’t part of this statistic, it’s worth speaking with a financial advisor to develop an investment plan for retirement.
#2 Consider Opening a Joint Account
One way to encourage communication and transparency is to open a shared bank account. In fact, 46% of couples already have a joint bank account or other shared assets.3
With a joint retirement account, tracking every payment and deposit is effortless—all your transactions are in one place. As such, it’s easier to know where you and your partner stand financially.
#3 Don’t Forget About Your Home Value
If you own your home, you may already have your retirement fund in your back pocket. Downsizing for retirement has many benefits, and selling your house can give you enough to retire comfortably for the rest of your life. However, using your home to finance your retirement comes with a slight problem: You still have to live somewhere.
With a residential sale-leaseback solution, you can convert your home equity to cash and stay in place. You’ll be able to enjoy the spoils of your real estate investment while you prepare for retirement—without having to leave your community.
Health and Wellness in Retirement
Another way to thrive during your post-working years is to make a different type of investment—one that improves your health and well-being. Maintaining a healthy diet and exercise routine can do wonders for your retirement planning.
That’s because caring for your physical well-being means caring for your financial well-being. Roughly 12% of the average retiree’s retirement income goes toward health care and medical expenses.4 If you stay healthy, you can earmark that extra 12% for golf, gardening, or cruises on the Mediterranean.
Preparing for Significant Medical Expenses
As retirement draws closer, it’s also worth thinking well into the future. Specifically, you and your spouse may want to discuss aging and the inevitable medical needs that come with it. These conversations can be difficult, but they’re an essential part of retirement planning for couples.
To be as prepared as possible, consider calculating the cost of healthcare in best- and worst-case scenarios. Potential expenses to plan for include:
- The cost of medical treatments
- Long-term care fees
- Changes in health insurance premiums
Prepare for Retirement with a Sale-Leaseback
Retirement is an exciting chapter in your and your spouse’s life together. It’s a time to focus on the things you love instead of work.
No matter your plans, your house shouldn’t tie you down—it should lift you up. And with a sale-leaseback, it can. Get the funds you need to prepare for retirement by paying down debt or funding a home transaction with a residential sale-leaseback program.
Retirement planning for married couples may seem complicated, but with your partner by your side, you can rise to the challenge together. Some of the best ways to navigate preparing for retirement as a couple include:
- Communicating openly
- Investing early
- Opening a joint savings account
- Focusing on your health
- Converting your home equity into cash
When in doubt, you can always seek out a financial advisor for help.
- Social Security. Starting Your Retirement Benefits Early. https://www.ssa.gov/benefits/retirement/planner/agereduction.html
- U.S. Census Bureau. Who Has Retirement Accounts? https://www.census.gov/library/stories/2022/08/who-has-retirement-accounts.html
- CNBC. Joint vs. separate accounts: How couples choose to handle finances could impact their financial success. https://www.cnbc.com/2022/03/07/joint-vs-separate-accounts-how-couples-choose-to-handle-money.html
- CNBC. Medical costs can eat up a sizeable portion of your retirement savings — here’s how much you should expect to spend. https://www.cnbc.com/select/how-much-expect-to-spend-on-medical-expenses-in-retirement/