Retirement Planning for Couples

Key Takeaways

  • Retirement planning is complex, and adding a partner to the mix can introduce another layer of complexity. The best way to address concerns is to talk openly with your partner about retirement.
  • When deciding where to live post-retirement, consider things such as climate, proximity to loved ones and livability.
  • Do you know when you want to retire? Make sure to talk this over with your partner to avoid any unwanted surprises.

Even if you’ve spent your life together, saving diligently, you may not really know how your spouse pictures retirement. And maybe you don’t even have a fully-formed sense of your retirement. Retirement can be a vague and idealised future realm, but it’s very much worth planning what you want it to be like for you and your spouse before you get there.

Planning for a shared retirement can be challenging. We offer some suggestions about how to have these important conversations, how to think about where you’d like to retire, and how to weigh the important question of when to retire. Saving for retirement is crucial, but so too is talking through what your retirement will look like.

Talk About Retirement With Your Partner

Do you both want to live in the same place? Might you prefer a change in climate? Perhaps one or both of you wants a change in scenery, like living near the beach, moving to a flat in city centre or escaping to the countryside. Perhaps you prefer to live closer to family members or old friends. And even if you both want to retire in the same place, you may have different ideas about when to retire.

Talking together honestly, openly, and frequently is a great way to figure out whether you’re on the same page when it comes to retirement. And if you’re not, dialogue can be a way to arrive at an effective compromise.

Start early. Planning for a shared retirement takes time and it is best not to rush the process. Starting well before you’re looking to retire can pay off. During this pre-retirement stage, you can each create a list of priorities and aspirations, talk them through and see how they compare. This can help you understand what you both value and where you may need to compromise.

Be open. You’re likely to have your most productive conversations when you both make your retirement wishes known, even if you disagree on some things. Asking open-ended questions and trying to learn about the other’s point of view can help you arrive at shared understanding and productive compromise.

Involve both partners in financial decisions. Although it is common for one partner to manage finances and investments, this can leave the other partner poorly educated about their financial situation and investment strategy. It’s a good idea to make sure you’re both familiar and comfortable with your financial strategy. Once you’re both comfortable, help keep each other involved in the financial decision-making process even if one partner plays a more active role.

Keep talking. Talking about your retirement plans is not a “one and done” sort of thing. Likely you’ll benefit from ongoing regular conversations as priorities and circumstances often change.

Location, Location, Location

Deciding where to retire is a big decision. Your location will influence your lifestyle—what you do in retirement and how—as well as partially determine the likely cost involved. There’s a lot to consider when narrowing down potential retirement locations, such as neighbourhoods, shops and facilities, community resources, proximity to friends and family, access to health care, and more. Here are some questions for you and your partner to consider, see how your answers compare, and weigh what is most important.

How close would you like to be to family and friends? Think of how easily your family and friends can visit you and vice versa. If living closer to them is critical to enjoying retirement, then consider a location that keeps you close to loved ones and provides an environment that suits both your needs.

Is climate important? Some retirees dream of moving to a different location to enjoy their retirement years. A big part of a location’s allure may be its climate or seasonal weather. Get to know your spouse’s dream environment to find a place where both of you might be content. You may consider settling in two locations if your budget allows.

Have you considered your total cost of living? Aside from your regular expenses, take into account your total cost of living. Think about how the cost of living might impact your retirement savings or retirement plan. For example, consider the cost impact of location. Living in an upscale metropolitan apartment will generally cost more than a cabin in the woods; living in a high-tax location might be more expensive. Another critical consideration is access to health care. Living somewhere with better access to health care may be valuable, even if it means a somewhat higher cost of living.

Do you want to rent or own? You should discuss with your spouse the pros and cons of each. Whether you rent or own ultimately depends on your longer-term goals and financial situation. For instance, if you have sufficient liquid assets for income and cash flow, and you plan on settling permanently, then you may prefer owning versus renting or leasing property. But don’t forget the time and cost of maintaining a property that you own, as well as possible mortgage expenses.

What type of home would you prefer? This decision depends on how you plan to use your space. If you plan to spend a lot of time together, keeping guests to a minimum, then an apartment or condo might work. If you plan to host family events, then you might need a larger space. Also think about how easy or difficult it will be to modify your home if your needs change. And if you plan on taking up an outdoor hobby, such as gardening, then a garden is a must!

When Should You Retire?

Many couples retire around the same time. If there is an age gap, the younger spouse might want to work for a few more years. With a longer work history and (hopefully) higher salary, some younger spouses may continue collecting a steady income to improve their financial situations and add to their workplace pension (employer-sponsored) or State Pension. Other spouses just love their work and wouldn’t mind earning full-time or part-time income past retirement age. Saving more this way can dramatically improve your financial situation.

You should also consider how much money you would like to retire with. How much money will you need to produce annual income sufficient to meet your expenses? Are you anticipating additional retirement income from a pension, ISA or other savings or investments?

You can estimate how much income you would need each year and how much of that would come from your total retirement savings. Sources of income and savings to include are investments, pension benefits and other forms of income, cash flow, revenue or salary. Be sure you understand your pension plans and your available options for using your pension funds and investing your pension pot.

Fisher Investments UK Can Help

Fisher Investments UK has helped thousands of couples plan for and enjoy their retirement together. We can help you analyse your personal situation, weigh your options for your pension plans, and recommend an investment strategy to help you meet your long-term goals. You do not need to go it alone. If you and your partner would like financial advice and guidance planning your retirement and your pension and investment strategy, contact Fisher Investments UK to speak with one of our qualified representatives today.

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