Many working couples dream of the day when they get to retire and go on trips together. However, there are some things to consider before couples retire together to ensure that they are indeed making the right decision. There are both emotional and financial consequences to retiring simultaneously as opposed to having one partner retire later than the other. It is good to start taking into account these issues much earlier when there is still time for each partner to plan a timeline of how and when they would like to leave the workforce and how those two ideas fan out.
Why Couples Should Not Retire Together
Unless couples are of the same age and in the same health, it makes more sense for just one person to retire earlier than the other. There can be both relationship and financial benefits to this situation. From the financial aspect of things, the advantages can be threefold. When one partner works longer and delays their social security benefits to past full retirement age, the sum of those benefits will increase. Additionally, the continued income from the spouse who is still working provides the couple with a few more years to save for retirement. Lastly, a spouse who works an additional three to five years will more likely have a shorter time to utilize their retirement assets, allowing larger withdrawal amounts each year.
The Financial Impact
A delay of just five years can have a huge positive impact for couples who are just about to have enough money in their savings, for those who have a family history of living a longer life, or for those who just wish to work much longer to get enough.
The Health Insurance Impact
Another key factor to take into account is the impact on health insurance. For someone who continues to work for an additional five years, they can maintain their health coverage provided by their employer, which can be less or more expensive than Medicare. Individuals become eligible for Medicare at the age of 65. For spouses who are not of the same age, the younger partner will need to seek alternative coverage if they were to retire together when the older partner has reached 65 years of age.
Emotional Aspect of Separate Retirement
Retirement can be a transition that involves a lot of emotions. Losing one’s sense of identity through work may need a major adjustment for some individuals, while others can find it pretty easy. When a working couple retires together, they may find themselves at home together at all times. This abrupt shift of environment may be something they need to get accustomed to which may cause conflicts to arise. As such, it may be much easier for couples to go through this process separately, especially if either one partner needs time to make the sudden adjustment. This will give at least one of the spouses some alone time to begin developing a new identity while also maintaining a good relationship with each other. This is highly crucial so as not to allow emotions to get the better of them.
