Retirement planning for married couples

Whether you’re recent newlyweds or have toasted more than a few anniversaries, you already know you can accomplish more together than alone. The same goes with retirement savings. Here are some things to consider so the two of you can make retirement anything you want it to be. 

It starts with a shared vision

While most of us have had a daydream or two about what retirement might be like, not everyone has it all figured out. That’s why “talking it out” together is a good place to start.

Where do you both want to live when you retire? What do you want to do? Are you going to be on the go or kicking back and taking it slow? Are you thinking about a second career? What about a second home? Knowing where you want to be and what you want to do will help you estimate what that lifestyle could cost you each year. 

Review your investment choices

With that baseline financial goal in mind, you’ll want to figure out the best way to put your savings to work for you. A good place to start is by looking at any available employer-sponsored retirement accounts, like a 401(k).

They’re a great way to save for retirement as your contributions are automatically deducted from your paycheck. And as most financial professionals will tell you, retirement readiness often comes down to making regular contributions over the long term.

Deciding how much to contribute

You should both agree upon an amount that you can comfortably and consistently stick to. It doesn’t have to be the same for the both of you. That said, if each 401(k) comes with a company match (extra money for your retirement savings), you should be sure to contribute at least the amount you need to get the match.

Keep in mind, no two accounts are exactly alike. Look at them both closely to see if one is more advantageous over the other (i.e. lower management fees, more investment options etc.). You’ll want to prioritize “maxing out” (fully funding) the better of the two. And remember, you don’t need to mimic each other’s investments. Knowing what your partner is invested in will help allow you to better diversify the overall combined portfolio.*

If someone leaves work

It’s very likely that one partner will leave work in the future, even temporarily. Let’s say one partner chooses to stay home with the children for a few years. This could mean the loss of an employer sponsored plan like a 401(k), and it should be taken into account.

There are plans called Spousal IRAs that allow the working partner to contribute money into an IRA in the name of their spouse. There are some restrictions though. Couples must file taxes jointly and the employed partner’s income has to be equal to or greater than the total contributions to the IRA to qualify for this account. 

Retiring at different times

If there’s an age difference between you two, the older partner might retire a few years before the younger one. Or if one truly loves their work, they might stay longer while the other leaves the workforce.

Retiring at different times can come with some financial benefits. It gives the working partner more time to save for their retirement. And it can be a trial run for a couple as well. How one partner spends their time and money while retired can be a road map for the other. And a later retirement for one partner may mean a bigger Social Security check for that person, which means more money to share in retirement. 

Retirement can be anything you want 

As a married couple, you’ll take on a lot of projects together. Retirement can and should be one of the most enjoyable. Take the time to talk to each other and put together a plan that works for both of you. And if you need help, reach out to a financial professional for a bit of advice or a fully-customized financial plan.