Personal Finance Essentials
Retirement Planning as a Couple
Only 20% of Couples Retire at the Same Time
Most Never Plan for What Happens When You Don’t
Retirement planning looks very different when you do it as a couple. You are managing two sets of income, two sets of expenses, two Social Security benefit projections, two pension plans and two risk tolerances. A coordinated plan that accounts for all of these variables will almost always produce a better outcome than two independent plans running in parallel.
When You Don’t Retire at the Same Time
Just 20% of couples retire in the same year. In half of dual-earner families, one spouse works at least two years longer than the other. This is not a failure of planning – it is a reality of modern life. Husbands are, on average, four years older than their wives. In second marriages, the gap is often 12 years or more. One spouse may love their work and choose to continue; another may need to keep working to qualify for retirement benefits or health insurance.
Retiring at different times creates its own friction. The working spouse may resent the retiree’s free time. The retiree may feel held back from travel or other goals. When the husband retires first, some wives who are still working become frustrated if their spouse does not take on his fair share of household responsibilities. These tensions are common and well-documented – and they require honest communication, not avoidance.
Talk with each other about when you each expect to retire, what that retirement should look like and whether you plan to continue working in some capacity. Do not assume you share the same vision simply because you share a household.
Women and Retirement
Retirement planning is a particularly critical issue for women. Although the majority of adult women are married at some point in their lives, 85% die unmarried – widowed, divorced or single. Women generally work fewer years than men, earn less on average and as a result, retire with significantly lower income.
Women 65 and older receive approximately 19% less in Social Security income than men of the same age, according to the Social Security Administration. Women qualify for pensions only half as often as men, and they enter retirement with half the personal savings of men their age. Although only 10% of all elderly people live in poverty, 65% of them are women.
These are not abstract statistics. They describe what happens when women – or their spouses – do not treat women’s retirement as a priority throughout their working years. Social Security benefits, pension contributions and personal savings all accumulate based on years worked and income earned. Time out of the workforce has lasting consequences. Plan accordingly.