Preparing for Retirement as a Couple

Married couples often have a lot of financial planning to do. You may have a goal of moving somewhere tropical and enjoying your golden years on a beach, or you might want to stay where you are and spend time with friends and family. 

Regardless of how you envision your retirement years, it is important for couples to understand how to save and create a financial plan to make the most of your retirement. Here are some tips for planning for retirement as a couple and for singles.

Retirement Saving Strategies

Married couples have different things to consider when it comes to planning for retirement compared to single individuals. Once you and your spouse have talked about the retirement expectations at hand, you are ready to start making financial moves. The first step to a successful retirement is to save well.

If you’re like most people, qualified retirement plans, Social Security, and personal savings and investments are expected to play a role. There are plenty of savings strategies and tax-advantaged accounts to utilize, and a financial advisor can help you understand how to use them to reach your goals:

  • Consider a Spousal IRA, it allows you to put aside funds in a tax-deferred investment account for the benefit of your unemployed spouse.
  • If your spouse is participating in a 401K you could add pre-tax income to meet your mutual goals.
  • Updating Beneficiaries, make sure this information is up to date and reevaluate in the wake of an unexpected event such as death or divorce.

How much does a couple need to retire? In general, you will need roughly 70% to 90% of your pre-retirement income to continue your standard of living in retirement. As a couple, the good news is that, along with having to plan for the expenses of two people, you can plan on having two people’s income and savings. This can help bolster your spending (and saving) power. 

Figures for Married Couples and Singles 

Being a couple has some unexpected advantages. For instance, the average retirement income for a couple can be more than double the average retirement income for a single person. Yes — the amount is higher, even when accounting for the presence of two single incomes instead of one.

The average retirement income for a couple is higher than the amount you get when you add the average income for a single man with the average for a single woman in the same age group. This is apparent when adding together the more useful median incomes of single men and single women, which equals $55,148 — or roughly $19,500 less than the median income for a married couple household. There are many saving strategies you can use based on your marital status:

  • Build up emergency savings—expenses can come out of nowhere and it’s important to have a backup plan incase of a hardship.
  • Know your social security options—if you were previously married for a decade or more, consider all your options, including claiming benefits based on your ex’s earnings or claiming a widow or widower benefit. 
  • Be aware of your retirement accounts—evaluate your distribution options to IRAs, 401Ks and other retirement plans based on your marital status. 
  • Stay on top of estate planning —Without a partner to carry out your wishes, decide how to distribute assets in your will early on. For those who have children and remarry, a will can avoid inadvertently disenfranchising your kids.

Conclusion

Johnson Wealth and Income Management offers a wealth of services custom-designed to help you get the most from your retirement, including Investment Planning, Estate Planning and so much more. With over 50 years of experience, our mission is to bring intelligence, integrity, and truly individualized value-added investment management and advice to affluent investors, putting the clients first, and to disregard the agendas of Wall Street and the giant firms that dominate the industry.

If you’d like to learn more about how we can help you with preparing for retirement as a couple – or single – contact us here today. 


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