“For better or worse, in sickness and in health till death do we part”. These are the words that married couples recite when they enter the union of marriage. Typically many years later after going through all the ups and downs in life, couples will face many crossroads together. One of those crossroads is retirement. Many working couples dream of the day when they can retire and sail off into the sunset together However, working couples should take a moment to consider whether retiring at the same time is a wise course of action. I compare here the financial ramifications of joint retirement versus one spouse working longer than the other, and why the latter option may be more advantageous in the long run.
Retirement is often thought of as an individual decision. Sometimes you do not have full control over the decision to retire. Sometimes that decision results from downsizing by your employer. Other times it might be due to health. Whatever the case may be, if you are married, Married couples must be aware that each spouse’s retirement represents an important life event for each individual. However, this individual decision also has significant bearing on a couple and the marriage.
Communication is the key
Retirement typically requires adjustment and compromise on the part of both spouses .This does not necessarily mean that you should or should not retire together. That is a different issue in itself. The point is that couples need to do some planning together to make sure everyone has a happy retirement. Communication is the key to this type of planning. It is very important that each spouse simply knows and understands how the other spouse thinks and what their perception of retirement is. This question is often referred to as either an “in-sync” or “out-of-sync” retirement. There is no easy answer as to which approach is best for you because there are pros and cons to each option. Age is usually a primary factor in both situations. Generally speaking, married couples range in age difference between one and five years, with the male being the oldest in most cases. Accordingly, once the male reaches the traditional retirement age of 58 or 62, he may be ready to call it quits, which can leave a few concerns on the table given the other spouse’s situation and age.
However, studies have shown that communication between spouses makes for better decisions and a higher likelihood of contentment.
There are both financial and emotional reasons why it may be easier for many working couples to stagger their retirement dates. Financially speaking, the advantages are threefold. When one spouse works longer, the amount of Social Security benefits the couple is entitled to 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 over which to draw on his or her retirement assets, allowing for larger withdrawal amounts each year.
As I thought about all of the couples I know who have retired or are retiring, I noticed many more couples retire at different times instead of synchronizing their retirements to occur at the same time. Throughout most marriages, each spouse develops a rhythm of going to work and coming home each day. Couples then decide who will do what chores and how much time they want to spend together on the weekends. These are predictable routines that may last for twenty or thirty years or more.
However, when one spouse retires and the other is still working, that rhythm can change significantly, and it can throw the relationship off-balance. It’s easy to see that expectations of spousal roles often change. The working spouse might expect the retired spouse to do more chores around the house like fix meals, clean, and run errands. The question at the end of the day often sounds like: “So what did you do today, honey?” Working spouses might also worry about the retired spouse not having enough to do during the day which might cause him/her to become bored and possibly even depressed. For this reason, some spouses feel pressure to be home earlier than usual when they have been used to staying at work as long as necessary to get the job done.
Once retired, a spouse may want more couple time in the evenings and on weekends while the spouse who is still working really needs some time alone to relax and regroup after being at work all day. These various changes in behaviors and needs can cause conflict in a marriage.
Another challenge for couples is worrying about their income decreasing when one spouse leaves work. Some people stay at work simply to maintain their current lifestyles. However, retirement often cannot be delayed when health issues interfere with one’s ability to work. Will you be prepared?
When couples who own a business together want to slow down, it is extremely important to pre-plan for retirement early enough. Some questions to consider: Will their children take over the business? Will they sell it? Can one spouse phase out before the other or will they both retire together?
Sometimes a couple might plan to retire within three to five years of each other. Once the first spouse retires, the other spouse may find that an earlier retirement is much more appealing. Once they see their spouse enjoying retirement, the couple may need to renegotiate the time frame so they won’t compromise their financial plans. Otherwise, this change of plans may cause resentments
Age differences and health issues also affect retirement timing. A spouse turning sixty-five might be ready to retire due to fatigue and burnout. However, the other spouse might be concerned they will lose the stability of the working income. Couples like this really need to focus on negotiating their different needs
Another major factor to consider is health insurance. If, in the previous example, Alex continues to work for another five years, he can keep his health coverage provided through his employer. This would save the couple from having to pay for five years of higher health insurance premiums at an individual rate.
With more women starting their careers later in life, husbands often precede their wives in retirement. We know several couples where the wife was still working and the husband was at home without a plan and feeling somewhat at loose ends. This put stress on the marriage, causing the husband to want to find something else to do that could take the place of work. He often defaults to work because he just didn’t know what else to do.
Because husbands have often been the primary breadwinners, many are ready to retire in their mid-sixties. Often wives who have been home are protective of their territory and want husbands to delay retirement to prevent any impact on couple interaction, income, and perhaps even lifestyle. When husbands are finally ready to retire due to burnout or medical problems, wives can be quite protective of their territory. This situation can be another battleground.
Some spouses are faced with forced retirement. My friend flew for Indian air force for almost twenty five years. He loves to fly. He did not want to retire at fifty but was forced to do so by the air froce age limit. He and his wife were not prepared for the adjustments to this transition, but over time they worked it out. Both of them now agree that preplanning would have created a softer landing into retirement
Emotional Reasons for Retiring Separately
Retirement in the modern era can be an emotionally complex proposition. Losing one's sense of identity through work can be a major adjustment for some, while others are able to make this transition with relatively little difficulty. When a working couple retires, they suddenly find themselves at home together all the time, without the separation of work that they may have become so used to. This sudden increase in time spent together can often disrupt established relational boundaries. As such, it may be easier for couples if only one spouse goes through this process at a time, especially if either spouse expects to have difficulty adapting to the new lifestyle.
The possibility of spending 24 hours a day, 7 days a week together can be equally concerning. Initially, an in-sync retirement may conjure up loving images of long walks on the beach and star gazing over a bonfire together, but that can come with its own challenges. A simple trip to the grocery store can turn into an unnecessary tiff as one spouse questions the others driving, the route taken, or what gets put in the basket.
Therefore, it is important to spend time together, but to also spend a certain amount of time apart. That makes it important for couples to manage their own social networks. However, women tend to be more social and have stronger social networks, whereas men often find social solace at work. That can represent a major challenge for couples if one spouse loses their social network in retirement and doesn’t have a means to replace it. It can mean an over reliance on the other spouse to coordinate activities or deal with the wrath that comes from sitting on the couch and watching TV all day.
Retirement is a complex and expensive phase of life. When couples stagger their retirement dates, they can reap both financial and emotional rewards that will make this vital transition easier. There are many resources available that couples can turn to for help in the decision-making process. For more information consult your financial adviser and retirement counselor.
As yo can see, a number of factors, including age, retirement savings, and individual roles come into play when you and your spouse decide to either retire together or at different times. In either event, it’s important to be open and willing to discuss the trade-offs and then do what’s best for the overall marriage.