Retirement Planning Mistakes Couples Make & How to Help Avoid Them

A common retirement planning mistake that couples make is to claim their Social Security benefits without properly considering survivor and spousal benefits. The Social Security survivor benefit is a built-in form of life insurance for married couples. With a little planning, you can usually get a higher benefit through the person who earned the most income over their lifetime.

Another big misstep couples often make when it comes to retirement is to both stop working at the same time. Everyone’s situation is different, and there may be cases where retiring together makes sense. However, unless both partners are the same age and in the same health, it usually makes more sense for one person to retire earlier. That’s true for many reasons, including financial ones.

For instance, when one spouse works longer and delays taking Social Security until after full retirement age, their benefit amount will be higher. Also, the continued income from the working partner gives the couple a few more years to save for retirement and create the right strategies for post-retirement income. Additionally, a spouse or partner who works three to five years longer than the other will reduce the time during which both partners will need to be generating income from their assets. That can be especially helpful for couples in good health or with a family history of longevity who may need reliable retirement income for 30 years or longer.

Speaking of health, staggering your retirements also means that one spouse will have the option of remaining on his or her employer’s healthcare plan, which could be more affordable than Medicare. Medicare eligibility starts at age 65. So, if you retire at 65 and your partner retires at the same time but they are 62, he or she must find alternative coverage for the next three years.

Finally, there are also strong emotional reasons for retiring separately. Retirement can be a complex and even difficult transition for some. When working couples retire at the same time, they often struggle with different reactions and coping skills.

Couples who retire at the same time can find themselves suddenly estranged once they no longer have the separation of work that they’d become accustomed to. They may also have a hard time establishing new relationship boundaries. Studies show that, in most cases, it’s easier from an emotional standpoint when only one partner goes through this transition process at a time.

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