When two people build a life together, retiring together might feel like a foregone conclusion — but it doesn’t always make the most financial sense.
“Retiring in the same year as your spouse has several pros and cons, depending on your relationship, health, goals and financial preparedness,” said Laura Adams, MBA, a personal finance expert with Finder.
While riding off into the sunset hand-in-hand might be best for your bank account, many couples find that staggered retirement is a better financial fit.
If both of you were working, the abrupt leap from two incomes to a fixed income can overstress even the best-laid financial plans.
“Retiring at the same time as your spouse is a real cold turkey approach to leaving the workforce,” said Catie Hogan, head of curriculum and founding financial coach at AI-powered personal finance app Parthean. “If you don’t have a great handle on your finances, it could cause tremendous strain to lose both of your regular incomes simultaneously.”
Many people expect life to cost less in retirement, and it often does. But many others find that filling up all that newfound free time can be expensive — particularly when both parties are newly retired and itching to cross items off their bucket lists.
“Having additional expenses, like entertainment and travel, could contribute to financial challenges if you don’t have ample retirement savings to replace your income,” said Adams.
For most couples, their respective ages will be the deciding factor in whether it makes sense to retire together or not. That’s because retirees age into Medicare and Social Security, the two most essential retirement programs.
Western & Southern Financial Group offers several hypothetical scenarios that could steer the decision in one direction or another:
- If one spouse is too young for Medicare, he or she might continue working until turning 65 to avoid losing employer-based coverage while the older spouse retires.
- If one spouse is eligible for Social Security, but the other is not, it might make sense for the younger spouse to continue working until at least 62, which is the earliest you can claim benefits.
- Even if both spouses are eligible for Social Security, one might reach full retirement age before the other, or the couple might be the same age and choose for one to retire while the other builds delayed retirement credits.
Finally, there are the non-financial considerations of what can happen when two people with two careers are suddenly cast into retirement together when they both have different expectations for the future.
“You and your spouse may have different visions for your retirement, and retiring at the same time may exacerbate these lifestyle differences and cause stress,” said Hogan.
Even if you’re on the same page, easing into such a drastic lifestyle change one at a time might make the emotional transition smoother, no matter how well you got along when work kept you apart for hours on end during your careers.
“Spouses may struggle with a sudden abundance of free time together,” said financial planner Andrew Lokenauth, founder of Fluent in Finance.
No matter how much you might want to take the leap into retirement while holding hands, spreading it out by a few years is often the better solution — particularly when an age difference justifies one party waiting.
“Staggering retirement allows the younger spouse to continue accruing Social Security benefits, provides continued access to employer-based health insurance and allows for a smoother transition to a fixed income,” said Rory Donadio, CEO of Tribeca Capital Group.
Even if age isn’t a factor, income might be.
“When one keeps earning while the other takes a break, it can ease the money stress and keep you covered with employer health insurance,” said Rob Whaley, finance specialist at Horizon Finance Group.
Clearly, some couples will benefit from retiring in different years — but for many others, taking the plunge together is the right choice financially, emotionally and in terms of lifestyle.
“Retiring with your spouse could bring many benefits, including sharing your early and most active years doing what you enjoy,” said Adams. “You won’t have to account for different schedules and can easily coordinate activities and time with family and friends. In addition, you can make significant decisions, such as relocating, managing your budget and planning future trips together.”
It’s also often the right choice if you were your own employer.
“When you’ve got a family business, retiring at the same time can work well if you want to hand the reins to your kids or other family members,” said Whaley. “It keeps things flowing smoothly, so all the wisdom you’ve built up can help the new generation. It’s like a well-choreographed dance of handing over the duties while reducing hiccups.”
But even if you spent your lives as W-2 wage earners, simultaneously waving goodbye to your careers can provide the perfect ending and the perfect beginning.
“If you have shared dreams and goals, achieving retirement at the same time is quite rewarding,” said Hogan. “Hopefully, you and your spouse have done some planning and feel comfortable retiring together in a financial sense, as well. Sometimes, when one partner retires before another, feelings of resentment can arise. Who wants to get up for work when your husband or wife gets to sleep in?”
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