There are countless couples in the workforce who have dreams of the day they can sit back and retire with their significant other, sailing off into the glorious sunset together. The financial industry has a sector of insurance and investments that are built upon convincing the public that their dreams like this one are all only a possibility with the aid of the products and services that they happen to offer. This has also been endorsed by the financial media, reiterating this.
Joint Retirement vs. Staggered Retirement
It is worth the time for couples to take a moment to really and truly assess whether they consider retiring simultaneously a wise or even attractive decision, in reality. There are financial ramifications that couples will have to face should they select to go down the path of joint retirement, and discussions and debates have led to suggestions that a more advantageous option may be for one spouse to work longer than the other. These are things best thought about and decided upon earlier on in life – the earlier, the better. The longer the decision is left unmade, the shorter the time left to map out plans for how to achieve the new plan!
Why You Shouldn’t Retire Together
Reasonably speaking, most couples aren’t actually the same age, and even if they are, they are often in different conditions of health. This leads to the sensible decision that one person should actually retire before the other. This can actually have a positive effect both on the finances and the relationship in general. It can be advantageous for one person in the relationship to continue working since both partners can benefit from the Social Security benefits increase! Not to mention, the additional income that comes in from the working partner which is beneficial for finances and for saving up that little more for retirement. Mathematically, it simply makes sense that if you work for another 3 or 5 years more, you will be able to enjoy larger yearly withdrawals from your retirement savings since you’ll be making fewer withdrawals.
The Financial Benefits
A couple more years of being in the workforce, earning a salary, means that a couple has the opportunity to save up more funds for their retirement. As mentioned before, the Social Security benefits increase several-fold and contribute greatly to the financial aspect of retirement. This translates into the difference between being simply financially prepared for retirement and enjoying some financial freedom in retirement. Nobody wants to retire with financial hardship, and certainly, no couple wants to retire in hardship. There is another financial benefit often overlooked — one where the employer contributes to the health insurance premiums of the couple. In this case, there are immense savings to be enjoyed the longer a partner remains employed and holds up the health insurance.
Emotional Impact of Separate Retirement
Retirement is a complex phase of life when a person feels a loss of identity after leaving work which generally defines many people especially after many years of service in the same industry or company. Retirement itself is a major lifestyle adjustment. When a working couple retires together, they find themselves sitting together at home without the relief of periods of time apart for work as they are used to. This sudden change can cause disruption within a couple’s relationship. Because of this, it may be far easier for couples to stagger retirement so that one spouse goes through the lifestyle transformation at a time, allowing each spouse to grow accustomed to the new life at their own pace without added interference or having to worry about the other.
The Last Word
Staggered retirement in a relationship leads to benefits in a range of ways for both people in a relationship. Retirement is a vital transition that benefits greatly from whatever can be done to make the process easier. Of course, at the end of the day, life itself will determine which partner will be the one to retire first, because life is unpredictable and there’s no telling just what will happen and whose health will be poorer or whose job will be more important to keep. Joint retirement may be a choice that seems romantic and idealistic, but in practice, the benefits are greater with separate retirement. At the end of the day, though, the choice remains with the couple alone – so weigh up the options and make an informed choice!