Retirement Planning for Couples: 5 Key Steps to Secure Your Future Together

Making ends meet can cause problems in personal partnerships and marriages.

A 2024 study by Fidelity Investments found that 45% of all couples argue about money at least once in a while, and about 25% cite it as the most significant challenge to their relationships.

And that’s just the day-to-day financial issues. Planning for retirement together can increase the stress factor even more.

Yet, planning for your retirement years is important as a couple. Together, you should address the numerous issues that are fundamental to your future financial security.

The steps below can help your discussions and decision-making.

1. Determine How Much Money You’ll Need

The Fidelity Investments study also found that 53% of couples couldn’t agree on perhaps the most critical retirement issue: how much they have to save to retire comfortably and enjoy the lifestyle they envision.

Examine and Cut Expenses

Begin with an anticipatory budget. Take your current monthly expenses and eliminate or reduce those that you most likely won’t have in retirement (such as supporting a child or commuting to work).

It’s typically estimated that you can shave 20% to 30% off your current expenses after you retire.

Can you reduce your future expenses even more? You might discuss downsizing to a smaller home. Depending on the equity you’ll have in your current home as retirement nears, you might sell your house, purchase a smaller place, and invest any balance in your retirement savings.

Project Your Income

You’ll also want to create a realistic estimate of your anticipated retirement income. Perhaps you’ll have several income streams in retirement—from retirement accounts, taxable accounts, Social Security benefits, and part-time jobs that one or both of you decide to take.

William “Bill” London, attorney and partner at Kimura, London & White, suggests running income simulations to determine how long your funds would last under various market and lifestyle scenarios. A financial advisor should be able to help you with this.

2. Decide When to Retire

Another critical issue that requires discussion is the age at which each of you is going to retire from your full-time jobs.

Retiring at the same time can be a source of pleasure and enjoyment in your later years. But if one of you continues working, the income could ease any budgetary restraints and allow you to continue building your savings.

This option not only can keep some cash flowing into your home, but it might even provide health insurance benefits for you both.

Fidelity found that nearly half of all study respondents intended to keep working for a bit after leaving their primary job, if only part-time.

3. Plan the Timing of Your Social Security Benefits

You’ve no doubt been paying into Social Security throughout your entire working lives. You can begin collecting your benefits at age 62 if you worked and paid into the system for at least 10 years and you’ve earned at least 40 credits.

However, waiting until at least full retirement age to apply for benefits is usually a better idea because your monthly payout amount will be bigger.

If the difference in your ages is large, it’s particularly important that you and your spouse discuss when to begin taking benefits.

These benefits can provide two separate sources of income. You and your spouse can simultaneously collect benefits if you’ve earned them, and your benefits will increase if one or both of you can delay claiming them.

“It often makes sense for the higher-earning spouse to delay benefits until age 70 to lock in the highest payment while the lower earner claims earlier,” according to Andrew Constantinides, CFP, an investment advisor and RSU strategist at Neil Jesani Wealth Management.

“This strategy not only maximizes joint income, but it also protects the surviving spouse with a higher benefit.”

You may be eligible for benefits on both your own work record and that of your spouse if you elect to begin collecting at or near the same time. You can be required to file for both in some cases, and the Social Security Administration will typically remit to you the higher amount.

4. Decide How to Save and Invest

As you approach retirement, you may need to change the types of investments you own as your ability to tolerate risk declines. This can have an impact on returns for couples.

Asset Allocations of Both Portfolios

For example, is one of you much older than the other? Some advisors suggest that the older partner might want to avoid excessive risk and focus on investments that generate immediate income.

The portfolio of the younger spouse can maintain a higher risk profile and be invested in a larger percentage of stocks than fixed income securities to continue to capitalize on growth opportunities that build wealth.

Types of Accounts

Another issue: Should you hold joint accounts, or would you prefer separate ownership?

“Couples have the advantage of pooling resources and planning as a financial unit, which allows for greater investment flexibility and long-term compounding,” Constantinides points out.

“But it’s critical that both partners align on risk tolerance and investment philosophy early.”

London mentions that joint accounts come with some drawbacks, however. “If either one of the spouses has creditors or poor spending habits, both are affected. It also decreases flexibility in the case of divorce or remarriage. Separate accounts are better suited for second marriages or stepfamilies, and they allow customized investment risk tolerance.”

Manage Your Savings

Research conducted by the MIT Sloan School of Management indicates that couples can earn less if they don’t coordinate their retirement savings, particularly with employer retirement plans.

So, for example, work out between you which of your employer-provided plans offers the higher match rate. Max out your contributions to that one first.

Then focus on the other spouse’s plan, contributing the maximum each year, if possible. Apparently, 24% of couples failed to take this simple, tactical step to build their savings.

5. Discuss Healthcare Needs to Come

Healthcare costs often rise in retirement years as individuals age. Long-term care can become an issue as well. Both are worth talking about as you and your partner plan ahead.

Is your spouse likely to be able to provide care for you if you have long-term needs? Are other family members available to help out?

Long-term care can be significantly expensive and can eat away at your retirement savings if it becomes necessary.

London points out that purchasing long-term care insurance can be less expensive while you’re still reasonably young and healthy.

As for health insurance, if you’re age 65 upon retiring, you’ll qualify for Medicare when you leave your job and your employer-provided health benefits behind.

However, your spouse will need new coverage if your employer plan covered them and they’re not yet old enough to qualify for Medicare. This expense should be incorporated into your retirement budget and financial plan.

“Medical expenses can be one of the largest expense categories during retirement, so couples need to prepare in advance,” London advises.

“Asset protection trusts or other estate planning devices can preserve assets from nursing home costs without forfeiting eligibility for public benefits.”

The Bottom Line

Retirement may not be the main thing on your mind during your morning commute, but it’s a huge life event that requires planning and preparation, particularly if you’re married or plan to be.

Communicating with your spouse and creating a plan together are keys to achieving a secure financial future as a couple.

Consult with an investment professional if you have questions about the retirement planning and investment options that are available and best for you and your partner.