Staggering your retirement date from your spouse may benefit you both
Many working couples dream of the day when they can retire and sail off into the sunset together. However, couples should consider whether retiring at the same time is the wise choice. There are both financial and emotional ramifications to retiring simultaneously compared to having one spouse work longer than the other. It’s a good idea to start thinking about these issues earlier than you may realize, when there is still time for each partner to map out a trajectory of how and when they’d like to leave the workforce and how those two plans mesh.
- Staggering retirements can help couples boost their total retirement assets while decreasing the number of years they draw on them.
- Couples need to consider health insurance options if retiring before one or both of them are eligible for Medicare.
- Retiring at different times may also be beneficial for couples’ emotional and relationship health.
Why Shouldn’t Couples Retire Together?
“Unless couples are the same age, and in the same health, it usually makes more sense for one person to retire earlier. There can be both financial and relationship benefits,” says Morris Armstrong, registered investment advisor, Armstrong Financial Strategies, Cheshire, Conn. Financially speaking, the advantages are threefold. When one spouse works longer and delays the age they claim Social Security benefits to past full retirement age, the amount of those benefits will increase. In addition, the continued income from the working spouse gives the couple a few more years to save for retirement. Finally, a spouse who works an extra three to five years will likely have a shorter period to need their retirement assets, allowing for larger withdrawal amounts each year.
The Financial Impact
“A delay of five years is a hugely positive move for couples who are just on the edge of having enough money saved, for those who have a family history of longevity, or for those who simply need to work five additional years to get to ‘enough,’” says Jane Nowak, CFP®.