Surviving Retirement – 7 Issues You and Your Partner Should Discuss In Advance to Ensure Your Happily Ever After

When it comes to retirement for couples, it’s important to remember that just as in all the proceeding years, you have to get on the same page.

This will definitely include some serious discussion, and often takes some compromise on both sides, to ensure you both understand what retirement will be like, require and entail.

This article focuses on topics ranging from when you plan to retire and what you want to do when you do so, to funding and how much you will need, health and long-term care, passing on assets, budget, legal issues such as what happens when one spouse passes, beneficiaries, and more.

Introduction

When you first started out together as a couple you probably had many discussion about your values, what you each wanted to do, if and how many kids you might want, where you would live, buying a home, and much more. In other words, what your future might entail together.

Now you find that you’ve done many of those things, whether or not they conformed with your original plans.

Hopefully you’ve been able to save some through various means, like pensions, 401(k)s, IRAs, etc., and you might even have some sort of plan created to guide you toward the next period in your life – retirement.

Well, just as you did before starting out as a couple, you’ll need to get on the same page when it comes to retirement, which will require discussions, coordination and actions, especially considering the fact it is a massive life transition requiring alignment on many important topics.

According to Roberta Taylor, co-author of “The Couples Retirement Puzzle: Ten Must-Have Conversations for Transitioning to the Second Half of Life,” slightly more than 60-percent of people can agree on when to retire, 50-percent can’t agree on whether to continue working in retirement and more than 70-percent can’t agree on whether they have an adequate retirement plan in place.

Clearly the need to get on the same page is necessary during the pre-retirement stage and beyond.

To help inform that process (or even kick-start it), here are seven topics you should discuss with your loved one to ensure your retirement is as successful as possible:

What will you do

Let’s face it, many couples start off with a mindset of “things will be just peachy” and “they’ll live happily ever after” when they first get together.

By the time they’ve spent decades together they’ve figured out as individuals what they do and don’t like. Often those things don’t align with those of their partner. Fortunately, over time they’ve learned to compromise and make things work.

Retirement will be no different. But you must have discussions to honestly lay out how you each view what retirement will look like in terms of your interests and what it will take for each to be happy and fulfilled.

This can range across many subjects, from travel to hobbies or interests, charitable work or giving, and much more, as well as day-to-day living.

Discuss it now so you each know where you are coming from. In so doing you know what matters to each other (you may be surprised what you hear, even after all these years together) and are able to start to figure out how to ensure each can be happy and fulfilled in retirement.

When to retire

When starting out you probably envisioned retirement as something you would start at the same time in the distant future.

As time has gone by and you’re both in the midst of the latter years in your careers, the reality begins to hit that retirement may or may not begin at the same time for each of you.

In fact, many couples don ‘t retire at the same time for a variety of reasons, ranging from health, age differences, time to eligibility for Medicare coverage and Social Security benefits, etc.

Moreover, it can be strategic to stagger retirement, as keeping one income can reduce the need to draw on your retirement savings, thus extending the amount of time your combined money will last.

Additionally, there are emotional and other issues that might be at play, such as career fulfillment and enjoyment, that can be very important to one spouse or the other.

And then there is the practical side, such as whether there are enough savings available to pay for the retirement you both want. To meet those demands, one partner may need to continue working beyond the point the other may be able to do so. A common example is the health of one of the partners.

Beyond the issue of whether you can retire at the same time is that of what benefits might come from one partner remaining employed for a longer period, which can range from receiving full benefits versus partial, healthcare coverage, and more.

Overall, discussing when each will retire in advance and having a clear idea of what will be needed (e.g., X dollars saved, all debt paid off) to make the retirement both envision a reality, deciding when to retire is a huge issue that needs to be agreed upon before you ever get there.

Where to live

It goes without saying that the ideal of owning your own island, being attended to for all needs, and being served meals and Mai Tais each day is not a bad vision for retirement.

But then again, that’s not for everyone…even if possible.

There are all kinds of considerations regarding where to live in retirement. For many, remaining in place is what they want and the most affordable and/or practical choice. That said, you may want to consider downsizing if you find yourself as empty nesters.

Oftentimes, family, friends, organizations you belong to, and overall existing ties to a community make it a good decision to stay put.

A key consideration is costs. How friendly is your current environment in terms of costs and taxes? Then there are things like healthcare availability, amenities, entertainment, etc.

When considering where you want to retire, here are some things to ponder:

• Family – do you wish to live closer to kids, grandkids, etc.
• Health – cold weather may not be something you want to deal with anymore
• Cost of living – where will you be most comfortable from a financial and budgetary standpoint? Finding the right balance can be critical in terms of living on a fixed income in retirement for years to come
• Standard of living – this goes hand in hand with cost of living, but incorporates those things you want in life. Do you want to live on a beach or near a coast? Or in the mountains? Do you want to run a dude ranch somewhere, or do you prefer to live where you can engage in cultural activities on a regular basis, such as theater

Have a retirement plan in place

Consider the fact that you and/or your partner might live for 20 to 30+ years in retirement on a fixed budget. With nothing more than savings, social security and whatever other income streams previously created. Now you start to get the importance of retirement planning.

Whether working with a retirement planner or financial advisor during your pre-retirement years, which is highly suggested, or doing the planning on your own, it is essential that it occurs.

There are too many issues, intricacies, pitfalls and implications involved with retirement not to have a plan in place before you get to the time you retire. Key considerations include:

• Costs and expenses, ranging from living expenses (home, food, entertainment, insurance, healthcare, LTC, auto, etc.), charitable giving, debt maintenance, travel, and more
• How much you’ll need each month to cover costs
• Available income streams from savings, continued investment, other assets (e.g., property), social security, part-time work, and more
• Taxes – avoiding and/or paying as little as possible, which can add up to tens of thousands of dollars over time
• Protecting assets through trusts and other strategies
• Estate planning to ensure beneficiaries get what you want them to receive in the most timely and efficient manner, with the least amount of taxes and avoiding probate

Because of all the issues and the complicated nature of retirement and associated considerations, you should seriously consider working with, or at least consult with, a qualified retirement planner to ensure all the bases are covered and that you have a good plan in place before retiring.

Post-retirement investing

Many people carry around the mistaken notion that investing is something done before and up to retirement, but that at that point it is no longer something they should be involved with.

That is completely misguided for the vast majority of people. Without your salary, you’ll need to create additional revenue streams, a big part of which might need to come from investment returns.

You certainly won’t want to lose sleep at night or be forced to gamble your future, but the fact is you may need to continue investing.

Why is this? Aside from budgetary shortfalls, issues such as inflation and taxes will eat at your retirement, which you will need to account for. Same is true for the unexpected expenses that always arise at the worst times.

A comprehensive retirement plan will consider your needs, existing assets, risk comfort/tolerance, and more. It will then incorporate tools and strategies within a portfolio that align with those things, with a goal of earning you the most prudently possible, or even simply maintaining your existing wealth, to ensure you have what’s needed for you retirement.

The tools you may use could include an appropriate allocation of stocks (especially those providing dividend income), funds, annuities, bonds, real estate, etc., as well as strategies for limiting taxes and creating lifetime income.

Combined together in a well-diversified portfolio, such an investment approach should provide you with the best chance possible of having both peace of mind and the funds available to support your retirement.

Long term care

According to the U.S. Department of Health and Human Services, nearly 70-percent of retirees will need some type of long-term care after age 65.

Given this reality, you and your partner need to discuss this issue, no matter how difficult it may be to talk about one or the other ending up in such a situation.

This could include care in your home or in a nursing facility.

Without advanced planning, the burden of care could fall on either one of you, which may or may not be realistic depending on the type of care needed.

Beyond the care necessary, there is the practical issue of affordability. You or your partner could be wiped out financially if there isn’t some type of long-term care funding in place.

And as you can imagine, LTC isn’t cheap, and can get more expensive the older you get. As such, it’s important to address sooner rather than later as you move into retirement.

Estate and final planning

Many people believe that only the rich need to engage in estate planning, failing to recognize that they probably have assets and would want them to go to people or organizations of their preference.

A failure to create a will and engage in estate planning can burden your loved ones with the hassle and entanglements associated with probate, and eat considerably into the amount you pass due to taxes and legal costs.

As such, discussing and creating a plan as a couple ensures you and your partner have the chance to provide input, compromise and come to agreement on who gets what upon the passing of one and eventually the two of you.

A good plan provides for the remaining spouse and family, reduces taxes to the fullest extent possible, and ensures money or assets you want to go to others (people or entities, such as charitable organizations) does in fact happen in the manner desired.

Beyond deciding on the disposition of assets, your planning should take into consideration issues such as final directives (documents that spell out how you prefer to be treated if incapacitated), final expenses (e.g., burial costs) and funeral wishes.

From a practical standpoint, you need to discuss how to make it easy on the remaining partner when one or the other passes. Gathering all life policy documentation together is important.

You’ll also want to assemble a comprehensive lists of assets, financial and other accounts that will need to be dealt with.

Additionally, you’ll want to include contact information for important people that they will need to communicate with, a list of all user names and passwords, and any other pertinent documentation they will need to have access to.

Gathering all of that information into a single place, such as a home safe, with an adviser or within a safe deposit box at your bank is prudent and will save the surviving partner time, energy and hassle at a time when they will probably be grieving.

Conclusion

There are so many considerations and decisions to be made when it comes to retirement. This is especially true when it involves two people who have their own thoughts, ideals and preferences.

As such, it’s important to discuss retirement and all it will entail in advance, alleviating the stress that can arise when dealing with these issues in real time, after you retire.

Beyond simply engaging in discussions, you should do yourself a favor and work with a professional who knows all the issues and can help you create a plan and assist you in navigating your retirement efficiently, ensuring your “happily ever after” ends up being what your envision.

At Oak Harvest Financial Group, we specialize in financial and retirement planning. We can work with you to address these issues, and much more, then help create a customized plan to meet your future needs and goals, while at the same time providing peace of mind during your retirement years.

If you’re ready to take the next step and talk to a team of financial advisors and retirement planners who put your interests first, Schedule a call today!

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