Retirement planning for couples requires considering both partners’ needs and goals. With good preparation, couples can ensure a comfortable and secure retirement together. Here are some tips for effective retirement planning for couples:
Set Shared Goals
- Discuss your vision for retirement together. Do you plan to travel? Pursue hobbies? Downsize your home? Understanding each other’s dreams will help you create a unified plan.
- Agree on your expected retirement lifestyle and budget. Calculate your anticipated monthly expenses in retirement. Factor in healthcare, housing, travel, etc.
- Determine your target retirement age. When do you both plan to fully retire? Coordinating timelines is important.
- Set savings goals together. Estimate how much total savings you need to reach your shared goals. Aim to save 10-15% of your income.
Evaluate Your Finances
- Review your current budgets and expenses. Understand your joint cash flow and where money is being spent. Look for areas to cut costs if needed.
- Take stock of all retirement accounts and balances. Consolidate information on 401(k)s, IRAs, pensions, and other savings.
- Calculate your expected monthly Social Security benefits. Create accounts on ssa.gov to view your latest statements.
- Consider your tax picture in retirement. Meet with a financial advisor to develop a withdrawal strategy that minimizes taxes.
Choose Retirement Accounts
- If your employers offer 401(k) matching, prioritize contributing up to the match limit. This is free money towards retirement.
- Fully fund IRAs each year, starting with Roth IRAs for tax-free growth. Contribute up to annual limits.
- Open spousal IRAs if one partner is not working. This allows contributing up to the IRA limit for each spouse.
- Use HSAs, FSAs, and other accounts to save more pre-tax for healthcare expenses.
- Choose an asset allocation for your goals, risk tolerance, and time horizon. A mix of stocks, bonds, and cash is often recommended.
- Rebalance periodically to maintain your target asset allocation as the market shifts. This sells high and buys low.
- Consider target date funds which automatically adjust to more conservative holdings as you near retirement.
- Seek help from fiduciary financial advisors if you need assistance managing investments.
Protect Your Health
- Get up-to-date on medical checkups and preventative screenings. Addressing health issues now can pay off later.
- Discuss your healthcare plans and costs in retirement. Your Medicare choices and out-of-pocket expenses impact your budget.
- Maintain a healthy lifestyle together. Stay active, eat well, and invest in your wellbeing.
Safeguard Your Estate
- Create or update your wills, healthcare directives, and beneficiary designations. Make sure assets transfer as intended.
- Set powers of attorney and living wills so someone can manage your finances and medical decisions if you’re incapacitated.
- Review insurance needs, including health, life, and long-term care policies, to cover future expenses.
- Seek estate planning guidance to develop a strategy for taxes, trusts, and inheritance.
- Have regular, honest conversations about your retirement progress and any concerns. Adapt plans as needed.
- Seek help from financial planners or counselors if you disagree on key retirement decisions.
- Approach retirement as a team effort. Stay positive, flexible, and committed to supporting each other’s dreams.
With shared goals, strategic planning, and clear communication, couples can thoughtfully prepare for a fulfilling life together in retirement.
Table of retirement planning action steps for couples:
|Action Item||Details||Target Date|
|Set retirement lifestyle budget||Estimate monthly costs for housing, travel, healthcare, etc||6 months before retirement|
|Calculate full retirement needs||Use retirement calculator to determine total savings target||1 year before retirement|
|Review account balances||Consolidate 401(k), IRA, pensions into one place||Annually|
|Project Social Security benefits||Check statements on ssa.gov and discuss optimal claim strategy||2 years before retirement|
|Consult financial advisor||Get expert input on managing assets, taxes, and income in retirement||1 year before retirement|
|Define healthcare strategy||Research Medicare choices and long-term care insurance||1 year before retirement|
|Update estate plan||Create/update wills, POAs, healthcare directives||Upon life changes|
|Rebalance investments||Adjust asset allocation to original targets||Quarterly|
|Lifestyle prep||Discuss interests, hobbies, volunteer work, etc to stay active||Ongoing|
- How to Plan for Retirement as a Couple
- A Couple’s Guide to Happy Retirement
- Retirement Planning Checklist for Couples
- Retirement Tips for Couples
- Retirement Planning for Couples: How to Work Together