Monday, April 6, 2015

Why Can't Couples Retire At The Same Time?

Many working couples talk about retiring at the same time and sail off into the sunset together. However, this “dream” doesn’t apply to everyone, especially working couples.

There are companies who claim they have products and services which can make this dream a reality, but not everyone can afford it.

Working couples should make time to talk about retirement and look into the positive and negative effects of retiring at the same time.

Photo credit: US Money News
Why Shouldn't Couples Retire At The Same Time?

Although the plan of retiring at the same time does not seem like it may not have any undesired outcomes, it may still have emotional and financial effects.

Working couples can either retire together or agree that only one of them retires while the other continues to work for a few more years. The second option, however, may have financial advantages.

The Impacts of Not Retiring Together

There are several outcomes not retiring together can produce, but can be summarized within financial and emotional impact:

1.       Financial Impact
By having one spouse work longer, the amount of Social Security benefits the couple is entitled to increases due to the extended period of contributions.
There is also the continued income from the working spouse which helps the couple to save more for retirement.
People who choose to postpone their retirement are financially securing their future since they are well aware that their incomes will be dramatically reduced once they retire.
Another benefit from keeping one spouse continues working is receiving employer matching contribution. For example: the spouse who continued to work signed up for insurance, be it life, health, or long term care, the working spouse’s employer will continue to match the payment for the policy as long as the working spouse is employed.
The employed spouse, the husband for example, can also keep his health coverage provided through his employer. Keeping the health coverage provided by the employer can save the couple from having to pay for individual insurance, as long as he stays employed with the company.
The decision whether to retire at the same time or having one spouse continue working can mean the difference between a financially secured retirement and financial hardship.

2.       Emotional Impact
Retiring today is different than it was 20 years ago. Before, retiring was more about enjoying the freedom from work and the stress which came with it. Now, retiring can be difficult for some people because they are afraid of losing their sense of identity.
The transition from working and being productive into having abundant time can be difficult for some people to adjust to, while others are able to adapt to the change in lifestyle with little hesitation.
For working couples, some find retirement too sudden and realize they have not prepared for it. The time they usually go on their separate ways to work is gone and they discover – they have too much time with each other, which they are not used to before.
The sudden increase in time together may or may not disrupt established relational boundaries. Some may favor this change in daily schedule since couples get to spend more time together, while others might find the lack of activity dull.
To avoid the difficulty with the transition, it may be easier for couples if only one spouse goes through this process at a time, especially if either spouse expects to have difficulty adapting to the new lifestyle.
Giving at least one of the spouses, preferably the one that is expected to have more difficulty with the change of lifestyle; some time alone may help in creating a new identity.
If both of the working couple retires at the same time, the emotional impact on each partner might create friction in the relationship which could otherwise be avoided.
Finding new paths for themselves can be a struggle for retiring spouses. They might even end up taking their frustrations out on each other.

The Bottom Line

We can all agree that retirement is indeed a complex and expensive phase of life. When couples delay their retirement dates, they can end up with both financial and emotional rewards that will make this significant transition easier.

It is best to consult a financial advisor and a retirement counselor regarding retirement for working couples and what type of retirement works for them, either together or on different times.

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