Personal Finance

Why Wives Should Rethink Retiring at the Same Time as Their Husbands

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by Alli Thomas

Oct 23, 2018

Flirting with the idea of timing your retirement to coincide with your husband’s? As romantic as it may seem, here are some reasons why you may want to think twice about permanently punching out of the working world at the same time as your spouse.

 

Women’s Earnings Peak Later

On average, married women are at peak earning power in their 50s and 60s (interestingly, the earnings of married men tend to be declining by that point). Most women tend to marry men who are two or three years older, so wives who retire with their husbands may be missing out on potentially higher Social Security benefits due to an early exit from the workforce.

 

Why Women Should Maximize Social Security Benefits

Maximizing Social Security benefits is critical for women for several reasons.

First, according to the National Institute on Retirement security, women over age 65 are 80% more likely to live in poverty than men of the same age.

Second, women live longer than men – by two years, on average – which increases women’s chances of outliving their retirement savings. And, partly because women tend to live longer, their healthcare costs run nearly 30% higher than men’s.

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Third, many women who temporarily leave the workforce in their younger years to raise children lose out on the opportunity to save for retirement. As a result, these women miss out on some of the power of compounding ­– that magical savings concept that allows investors to earn returns not just on their initial investments, but on the earnings on those investments as well.

What are the Options?

There are two possible solutions that may help you maximize your Social Security benefits: put off retiring for a year or two, or delay taking Social Security benefits if you leave the workforce before you reach full retirement age.

 

Consider the Non-Financial Reasons, Too

Financial considerations aside, there are also some common relationship pitfalls that may arise if both you and your husband retire simultaneously. Retirement is a time of major adjustments, and many couples find they have different visions of how they will spend their days once they’re no longer working. A 2015 study by Fidelity Investments revealed that one out of three couples were out of sync about their expectations of their retirement lifestyle. As is the case with resolving most relationship issues, communication is key. It’s never too early to sit down together and start mapping out your ideas about what life might look like once you’re both no longer working.

 

If you’re married and wondering whether it’s best to stagger your retirement or walk hand-in-hand into your golden years, we can help. Sign up for a FREE, no-obligation conversation with a financial advisor to schedule a Results In Advance evaluation of your current retirement plan or portfolio.

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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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