The first thing in your preparation for retirement is to have an open-ended discussion on the topic with your partner. Retirement is a sensitive matter, and it is important to understand how you both see your life after retirement. Take each other’s feedback and try to reach a common ground on top priorities, retirement goals, where you want you settle, etc. Identify things that both of you would like to do together, or a professional interest or passion that either of you would like to pursue post-retirement. Recognizing retirement challenges and getting each other accustomed with the ground-level realities is also helpful to prepare for the new role.
Irrespective of your savings, or the fact that your spouse is still working, retirement affects your overall earnings and the day-to-day expenses of the household. To deal with the loss of income and to adequately use your savings, you must list all your probable cost centers and consider ways to curb the unnecessary expenses. You must also know all your probable income sources and then try to zero down on the quantum of money you need in retirement to maintain your preferred lifestyle.
Financial planning is essential during this period, as your income sources reduce, while the expense avenues remain relatively the same. If not planned adequately, retirement can cause financial hardships, a diminished standard of living, and in some cases, the need to return to part-time or full-time work. Having a complete financial plan with a clear strategy to deliver on your retirement needs is the key to a peaceful and pleasant retirement.
Your financial plan must include income from all your savings and retirement accounts, Social Security, life and health insurance, Medicare, possible inheritance, and returns from investments. At the same time, you should have a realistic outlook of your own expenses, children and dependent parents, emergencies, and other debts. Based on your research and understanding, you and your spouse can decide the monthly withdrawal limits, ensuring that your savings last for a substantial period.
Health is a major area of discussion as you age. It is also a major source of expenditure for retirees. Both you and your spouse should have health insurance and adequate Medicare to cover probable health costs. It is also beneficial to analyze each other’s family history of health and get appropriate critical illness riders if required. Annual health check-ups along with leading a healthy lifestyle can help you lead a comfortable retirement.
Social Security Benefits is are another critical aspect of retirement, as it they ensures steady cash inflow for the retired person and their spouse. But the timing for opting for these benefits is equally significant. The more you delay Social Security, the greater is the benefit for you and your family. If you enroll for benefits at 70, you can enjoy an 8% increase in the overall benefit. Therefore, discuss with your partner on what would be the right time to avail your Social Security Benefits. If both of you are on the retirement horizon you can plan to avail the benefits of one person while the other can delay the enrollment. You should also keep yourself up to date with Social Security regulations in case of a divorce or unfortunate demise of a spouse.
Retirement can be difficult for some couples, but proper planning and mutual understanding can make the transition simpler. To make this work for both partners, one needs to be open and flexible to the other person’s suggestions and opinions. You must remember that both partners are in the journey together.
Safeguarding yourself and your spouse financially is imperative in retirement. Contact Financial Advisor for help on a smooth transition to retirement.
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