Finances in Retirement - Investments

Four Questions Couples That Want to Retire at the Same Time Should Answer First

by Alli Thomas

Jun 6, 2021

For many couples approaching retirement, the idea of retiring at the same time may seem attractive. But beyond the attractive romantic notions, there are many reasons why retiring together may not be a good idea.

Let’s take the example of Jack and Diane, who started dating in high school and married shortly after graduating college. They’ve always expected to retire at the same time and with both about to turn 62, their goal is within reach thanks to ample retirement savings.

While they plan to retire as soon as they can start collecting Social Security benefits, there are four important questions Jack and Diane – and any couple that wants to retire at the same time – should answer before making their decision:


1. Have you properly calculated your cost of living in retirement? 

Jack and Diane have spent countless hours crunching numbers and poring over their budget. However, like many retirees, they may not realize that their overall expenses could increase in retirement instead of decreasing.

Diane figured she’d probably save on gas for the car, wardrobe expenditures and even 401(k) contributions after she retires. But depending on their lifestyle goals, these savings could be offset by higher healthcare, travel, and entertainment costs.

According to a 2015 study by the Employee Benefit Research Institute, 46% of older adults spend MORE money on living costs during their first few years of retirement than before retiring! And according to a 2021 EBRI study, 20% of retirees spend more than expected on housing costs while 15% spend more than expected on their retirement lifestyle.


2. Are you leaving Social Security benefits on the table?

Just because Jack and Diane would be eligible to draw Social Security benefits at 62 doesn’t mean that they SHOULD. The longer they wait, the larger their benefits will be.

Not only will they get a larger monthly benefit if they wait until closer to their full retirement age, Diane’s benefit would increase further because she spent several years out of the workforce to take care of their children. If she retires at 62, her employment gap would leave her just short of 35 years of earnings, which would take a big chunk out of her potential monthly benefit.


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3. Do you feel ready to retire?

The decision to retire is not just a financial one. Many people are surprised at just how big of an adjustment it is. Especially for married couples!

When spouses retire at the same time, they suddenly start spending a LOT more time together. This requires them to establish a new normal, with new routines and new roles. Yet, if one spouse decides to continue working, this could also cause some resentment. Will the household chores fall on the retired spouse?

Sometimes, one spouse will reluctantly agree to retire just because the other spouse is ready to stop working, but that may not be the best choice. Jack may be burnt out and ready to retire, but if Diane loves her job, is it a good idea for her to retire too? Maybe not.


4. Do you have a good retirement plan?

If you and your spouse are thinking about retiring together, the best thing you can do after talking to each other about the idea is to speak with a financial advisor. They can help you confirm that retiring at the same time is a good idea (at least financially) and help ensure you’re not overlooking any potential expenses or other financial downsides while putting together your retirement plan.

Don’t have an advisor? You can find your local Retirement Wealth Advisor by browsing our advisor directory or you can click here to have one reach out to schedule a no-cost, no-obligation consultation.

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Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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