3 Reasons Couples Should Try To Retire at Different Times
Written by
Crystal Mayer
Edited by
Amen Oyiboke
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According to research from Ameriprise Financial, only 11% of couples retire at the same time. Overwhelmingly, couples opt to stagger their retirements by at least a year despite some reports suggesting that couples should avoid retiring at different times because of the potential for overspending.
Studies show that the first year of retirement, in particular, can be challenging for finances since there may be an adjustment period and a level of uncertainty when it comes to expenditures. However, despite the risk of overspending, there are several benefits to one spouse remaining in the workforce.
Here are three reasons couples should try to retire at different times.
Maximize Social Security Benefits
As reported in Ameriprise’s “Couples, Money, & Retirement” research report, 26% of future retirees planned to retire together, yet only 11% actually did among current retirees. The discrepancy between the expectation and reality is likely based on a number of factors, including financial concerns.
Only 31% of those surveyed said they felt confident their savings would last throughout their lifetime. Additionally, 36% of respondents acknowledged feeling nervous about spending their nest egg.
Couples who retire at the same time may be forced to take Social Security in order to supplement their retirement income. While you can start withdrawing Social Security benefits as early as age 62, it will reduce the amount you receive each month.
On the other hand, delaying receiving Social Security until age 70 can help you to maximize your benefits. By staggering retirement with your spouse, you may be able to wait longer to receive Social Security benefits, thereby ensuring you receive the largest amount allowable each month once you do withdraw.
Additional Opportunities To Save
Another reason to consider retiring at a different time than your spouse is the possibility of additional savings opportunities. During retirement, many retirees are unprepared for the shift from saving to spending. If you do not have a fully funded retirement, it is a good idea to continue saving until you feel comfortable that your nest egg will last the remainder of your lifetime.
It is important to remember that many retirees are living longer than ever before. The Social Security Administration (SSA) noted that “about 1 out of every 3, 65-year-olds today will live until at least age 90, and 1 out of 7 will live until at least age 95.”
Preparing for a longer retirement is critical. Working with a financial advisor or retirement planner can help ensure you are meeting your goals and properly preparing for a solid financial future.
Save for Healthcare Considerations
Finally, if one or both people are under the age of 65, it may be beneficial to retire at different times due to healthcare considerations. Healthcare costs continue to rise, making it nearly unaffordable for a retiree on a fixed income to avoid decent coverage. While individuals 65 years of age and older can enjoy the benefits of Medicare, younger people will need to find coverage elsewhere.
Employer-sponsored healthcare is generally significantly less expensive than trying to find health insurance as an individual. Under many circumstances, healthcare coverage provided by an employer may also extend to spouses. This means that you can get premium health insurance at a fraction of the cost in some cases. With at least one spouse continuing to work, you can take advantage of the insurance and ensure all your medical needs are met.
Final Take To GO
While deciding whether to retire as a couple or an individual is a personal decision, the key takeaway should be to make sure that you are on the same page as your spouse. When surveyed, 25% of people said they disagreed on “how much to spend on key spending categories,” such as experiences, family expenses and the amount they would need to live on in retirement.
Consulting with a financial advisor or retirement planner before you leave the workforce can help to ensure that you and your spouse are in sync with your financial goals and make for a much smoother transition to your golden years.
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