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Retiring at the Same Time as Your Spouse?

September 05, 2019

It sounds great! Retiring with your spouse at the same time would mean you could travel together, take up some hobbies together, have more time to spend as a couple. And how long has it been? Often, by the time we are nearing retirement we have only recently said goodbyes to our youngest child. Which means that over the last 20 or more years, spouses have seen little of each other as day-to-day obligations eat up alone time. It is for these reasons that simultaneous retirement has its appeal. But it is important, especially for women, to know where the pitfalls lie.

Peak Earnings

If you are considering leaving your job in your 50’s or early 60’s, you are walking away from your peak earning years. That doesn’t just affect your income now, it means that you aren’t contributing as much as you could to Social Security, employer-matched 401(k) plan, and IRAs. These years are critical to safeguarding your finances especially as you move into the later years of retirement. Before you and your spouse decide to exit the workforce together, it will be important to run scenarios with your current financial plan and retirement savings to be sure that you will be secure for the long term. There are a lot of factors to take into consideration during this review and it is recommended that you work with a financial advisor if you are considering early retirement.

If you come to the conclusion that you are unable to retire at exactly the same time as your spouse, try not to get too discouraged. Your plan can be adjusted to help you achieve financial independence.  Your advisor may recommend delaying retirement by a few years, making catch-up contributions to your IRA and 401(k), converting some IRA money to a Roth IRA, and restructuring your portfolio for potential growth.

Social Security & Women

Social Security payments are tabulated based on your 35 highest-earning working years. Since women tend to pare back their working years to raise children and/or care for other family members, staying in the workforce at a possible peak earning time could make up for years with lower earnings earlier in life.

Since women tend to live longer, retiring earlier (therefore losing income and a higher Social Security payout) and missing out on potentially profitable years to further save, could have a greater impact on women than one may realize. Women, on average, spend more years retired than men do. That extended life also means that women tend to have more costly health issues later in life and need more expensive long-term care.[1] With longer life, comes the added expense, and if women started with less, to begin with, the odds are higher that they will outlive their savings. Currently, women are 80% more likely than men to be impoverished after the age of 65.[2]

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