Should married couples retire together?

When talking about retirement, you’ve likely seen the images of two people walking along the beach holding hands or riding bikes through the park. Retirement is often considered a chapter a couple enjoys together, where they’re free to travel, visit friends and family, or participate in different activities. While this may also be what you envision for the future, does it make financial sense to enter retirement at the same time or stagger your start dates? Here are several factors to consider when planning for retirement to help couples decide if they should cross the work-life finish line together.

Retirement planning for couples: Should spouses retire together?

When thinking about the next chapter, it can often be a smart strategy for couples to retire at different times. This approach allows one person to begin collecting retirement income, such as Social Security or a pension, while the other continues working and keeps building savings. Many things can influence this decision, including how prepared each person is for retirement, their level of debt, and their health. For example, one might prefer to retire earlier to enjoy a more active lifestyle, while the other may want to keep their employer-provided health insurance for a while longer.

When discussing retirement plans and the future, it’s helpful to focus on shared goals, how income and expenses align, and what timing works best for both individuals to ensure long-term financial success. With these details in mind, there are steps to take that can help create a retirement plan that supports both partners, even with different retirement timelines.

Prepare for retirement by discussing important questions as a couple

Even if it makes more financial sense for a couple to retire at different times, it can be helpful if both individuals are on the same page about their expectations for the later years of retirement. Going through a checklist of questions together can allow both parties to understand each other’s wishes so they can evaluate which options can support their desired lifestyle and how to create a financial plan that helps make these dreams come true. Here are some questions to consider:

What is your ideal retirement lifestyle?

To plan effectively, each person needs to know what is expected from retirement. Will you be living a life like you do now? Do you want the same financial freedom, or will you reduce your spending?

When would you like to retire?

Everyone’s retirement timeline can differ based on personal preferences and financial preparedness. Discuss with each other when you would like to retire so you can set a goalpost and plan accordingly.

How would you like to spend your time?

Some couples may spend retirement traveling, while others may downsize or move closer to their children. Picturing how you’ll be spending your days helps you determine the amount of income needed to support your lifestyle and if your savings will last as long as you do.

Where will you live in retirement?

Many couples choose to age in place, while others wish to move to a smaller home or retirement community. Be sure to consider home and yard maintenance, potential renovations that are needed to make a house more accessible, and whether the current location is close to necessary health care providers.

Will you work part-time?

Not everyone wishes to completely stop working once they reach retirement age, or they may need the income to support their day-to-day living and fill any gaps in the budget. Partners can talk through whether either plans to work part-time, what that involves, and how long they expect to stay employed.

When will you claim Social Security benefits?

A key part of the retirement planning conversation is determining when each person will claim Social Security. Remember, a person can technically start claiming benefits at age 62. Doing so may alter the nature of these benefits, so be sure to review Social Security information in detail.

Once a couple is on the same page about who should retire first and who should continue working based on financial goals and anticipated lifestyle, it’s time to set a target date to help keep both individuals on track. Couples can work with a financial professional who can review their assets and future goals to help determine when a sensible time is for each of them to retire.

How to prepare when one spouse retires before the other

When one person retires before the other, they may decide how much of their expenses will be paid via the working spouse’s income and whether the retired spouse will need to dip into their retirement savings account to supplement expenses. If a person can delay claiming Social Security benefits, it can help maximize that money down the road. Along with the additional income and potential health insurance, having one partner still employed can also allow them to continue contributing to their retirement accounts and creating more savings for the future. As a financial plan is created, it’s important to determine which expenses the income will cover, whether it’s for essential needs or will go toward building an emergency fund or future savings goals.

How much should a couple save for retirement?

Retirement planning for couples often involves many factors and creating estimates of income, expenses and savings goals. In general, couples are typically encouraged to aim to save 15% to 20% of combined annual income and aim for 10 to 12 times their pre-retirement income by retirement age. This amount can vary based on lifestyle goals, expected expenses, and other income sources, but proper planning can help ensure financial security in retirement for both partners.

Can my spouse receive my retirement benefits?

When filing for retirement benefits, a spouse may be eligible for benefits based on the other spouse’s earnings, provided they are at least 62 years old or have a dependent child in their care. If the spouse’s own benefit is higher than the spousal benefit, they will receive the higher amount. These factors are important to consider when planning for retirement and determining the best timeline.

How mixed retirement couples can maximize spousal retirement benefits

As a couple develops their retirement strategy and decides when to begin collecting Social Security, they will want to compare benefit estimates for both spouses. In many cases, the higher earner may choose to delay claiming Social Security to maximize their benefit and potentially increase the spousal benefit. Spousal benefits can be up to 50% of the higher earner’s benefit, depending on the spouse's age at the time of claiming. Since the spousal benefit may exceed the amount a spouse would receive on their own, carefully evaluate the numbers to determine how to make the most of personal retirement benefits. It’s a good idea to review spousal options on the Social Security Administration website.

When should married couples take Social Security?

Since benefits increase the longer a person waits, up to age 70, married couples could consider waiting until at least their full retirement age to claim Social Security. Spousal retirement benefits can also be maximized by coordinating when each spouse claims. Strategies may include delaying claims for the higher earner to boost both benefits, or one spouse claiming early to provide additional income while the other delays.

Can I collect spousal benefits before I retire?

It is possible for a person to collect spousal benefits even if they aren’t retired, as long as they are 62 or older. However, if a person hasn’t yet reached full retirement age, their spousal benefits will likely be reduced since it pays to wait longer before collecting these benefits. Coordinating Social Security benefits with a spouse can help maximize retirement income and create a strategy to support both short and long-term financial goals.

How Midland National supports retired couples exploring their options

Retirement can look different for each person, but as a couple, it’s helpful to determine how to support each other’s dreams and build the savings needed for a fulfilling life as a retiree. Meeting with a Midland National financial professional can offer valuable guidance and insight into determining the best time to retire, if there are income gaps that need to be filled, and how solutions like annuities and life insurance can supplement an overall financial strategy. With a team approach to planning, you can make sure you’re both retirement ready and can look toward the future with excitement.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

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