What Happens when Both Spouses Can’t Retire at the Same Time?
In cases where you and your spouse are close in age and approaching retirement at the same time, you may be wondering what to do if you cannot both retire together. However, several financial experts have agreed that in most cases, it’s actually recommended that retirement be staggered instead.
Below are a few basic guidelines for situations where one spouse isn’t able to retire right away:
Consider the Advantages
Staggering your retirement has a number of benefits, which is why it’s the recommended course of action to take. For instance, you and your spouse can stop working at a point in your career that works best, which enables you to both benefit as much as possible from pension or retirement packages. It will also allow you to evaluate and adjust your finances to accommodate the upcoming second retirement – regardless of whether it happens in a few months or even a year or two from now.
One of the main aspects to deal with is that of deciding which spouse will stop working first, and there are some points to consider here:
- Health Conditions – If one spouse has a health issue that may worsen if they continue working, then it would make sense for them to retire first
- Income – If you still rely heavily on earned income to make ends meet, it would be best for the spouse who earns the most to continue working for the time being
- Retirement Benefits – If you or your spouse can increase retirement benefits by waiting a little longer to stop working, this is a crucial aspect to think about. The extra funds could make a huge difference to your budget after retiring
- Job Security – It’s essential for both spouses to consider their job security. This could help prevent either one from being laid off soon after the other has retired
- Health Insurance – If you and your spouse are covered under a single insurance plan, and if it provides good benefits, the spouse with the insurance may want to wait to retire
If one spouse retires right away and the other still has to work for a few more years, it may cause the working spouse to experience feelings of jealousy. However, this should instead be considered as an opportunity to obtain the help you need – for instance, the retired spouse can now assist with housework and running errands during the day so you can spend quality time together at night.
When one spouse stops working before or after the other, it provides a great opportunity to implement budget updates that you may already have discussed. Even though one of you is still working, it may be possible to start living on your planned retirement budget. This will allow you to see whether your proposed budget is realistic and you’ll be able to save a little just before full retirement as well.
If you are keen to retire, but aren’t sure how to determine whether you’ll have enough to live on once you and your spouse stop working, get in touch with our advisors today.