Preparing Your Spouse for Retirement

Retirement affects not just you. It affects your spouse, too. For one partner, retirement might mean no longer going to work, swapping formal clothes for sweats, and no longer having to track performance metrics or deadlines. For the other, it can be more about adjusting to having their partner at home, spending time together, and even reworking daily routines and social lives. Either way, retirement is a shared transition, both personally and financially.

The personal transition is something most couples figure out gradually. You learn to adjust and find your rhythm together. The financial transition, however, can feel more challenging. This is where you can take the help of a financial advisor. A financial advisor can help you with couple retirement planning strategies and align your retirement goals as a couple.

Preparing your spouse for retirement is important to ensure that both of you understand your income sources and the lifestyle you want to maintain together. This article will share some spouse-retirement-readiness tips that can help you.

Below are a few things that should be kept in mind when planning for retirement for yourself and your spouse:

1. Understand each other’s retirement goals

As you already know, retirement affects both partners. That is exactly why each of you may have a very different picture of what retirement should look like. And that is perfectly normal. As you grow older, your priorities become clearer. You may finally want to do things you have never done before, travel more, take chances, slow down, or simply live life on your own terms. For some people, retirement can involve exploring new countries. For others, it could be moving to the countryside, living by the beach, or settling into a peaceful retirement community.

Each of these choices comes with its own financial implications. Travel costs money. Relocating involves making decisions about buying and selling real estate. On top of this, your healthcare needs may change. The bottom line is that your lifestyle choices, no matter how simple they seem, require planning and financial foresight.

At the same time, it is important to remember that your goals may not match your spouse’s, and in some cases, they may be completely different. One of you might want adventure, while the other may simply want to tend to the garden and read a book.

So, what do you do when your visions do not align?

You talk about them. Openly and honestly.

These conversations help you understand what the other person is thinking. They also help you figure out whether your current savings and investments are enough to support the life you both want. Most importantly, these discussions are a key part of preparing your spouse for retirement. When both of you are clear about your shared and individual goals, you can plan accordingly.

2. Account for the unavoidable expenses you would both have

Retirement planning for couples is not just about dreaming up the life you want but also preparing for the expenses you can’t avoid. Let’s take lifestyle choices first. Let’s say you plan to retire by the beach. That is a wonderful goal, and something you can plan for. You might buy a beach house, sell another property to fund it, or save enough during your working years to maintain two homes. These are voluntary expenses. Healthcare, however, falls into a very different category.

Medical expenses, especially those associated with older age, are largely unavoidable and non-negotiable. They also tend to rise as you grow older. Then there is long-term care. Taxes are another unavoidable expense in retirement. You may still owe taxes on Social Security benefits, withdrawals from retirement accounts like the 401(k), and more.

Just like you discuss your retirement goals and dreams, you also need honest conversations about these costs. Talking through them gives you a more realistic picture of your future and helps you understand how different expenses may compete. For example, if your individual or joint healthcare costs end up being higher than expected, you may need to cut back on travel or forgo the thought of that beach house.

3. Use smart couple retirement planning strategies when claiming Social Security

Couples have a few built-in advantages when deciding how and when to claim Social Security benefits. With the right approach, you can potentially increase your combined lifetime income. Let’s start with the basics.

You can begin collecting Social Security as early as age 62, but the earlier you claim, the smaller your monthly benefit will be. If you wait until your full retirement age (FRA), you will receive 100% of your Primary Insurance Amount (PIA), which is the benefit you have earned based on your work history.

If you are able to wait beyond your FRA, your benefit continues to grow. For every month you delay, your payment increases by about 0.67%, which adds up to 8% per year. If you delay until age 70, you will receive your highest possible benefit. For example, if your FRA is 66, your benefit could grow to about 132% of your PIA. If your FRA is 67, it could reach about 124% of your PIA.

Now this is where planning as a couple really matters.

A common and effective strategy is for the lower-earning spouse to claim first, while the higher-earning spouse waits. Since the higher earner has a larger benefit to begin with, every year they delay adds more income over time than delaying the lower benefit would. But to make this decision, you need to compare both of your benefit estimates carefully. The spouse with the higher PIA is considered the higher earner, and in many cases, it makes sense for that person to delay claiming benefits.

If one spouse’s benefit is more than twice as high as the other’s, another option may come into play. In this situation, the lower-earning spouse can claim benefits based on their own work record first and later switch to spousal benefits once the higher-earning spouse starts collecting.

Also, delaying the higher earner’s benefit does not just help while both of you are alive. It can also provide protection down the road. If one spouse passes away, the surviving spouse generally keeps the higher of the two benefits. So, delaying the higher earner’s Social Security can result in a larger survivor benefit.

4. Speak about any debt either of you may carry

No matter which one of you has debt, it affects both of you equally. Once you retire, your finances are shared more than ever. It all comes out of the same income and savings. That is why being open about debt is such an important part of preparing your spouse for retirement.

If you have credit card balances, loans, or even a mortgage that is not fully paid off, your spouse needs to know. And the same goes the other way around. Carrying debt into retirement by either partner can limit the lifestyle you were hoping to enjoy.

Debt does not just reduce your monthly cash flow. It also increases stress. High-interest debt, especially credit card debt, can be particularly damaging. If the interest you are paying on your debt is higher than what your savings or investments are earning, it often makes more sense to focus on paying off that debt first. This does not mean you should stop saving altogether, but it does mean you need to strike the right balance.

Take a close look at all your outstanding debts together. List them out, note the interest rates, and pay them down, starting with the most expensive. The years leading up to retirement are often the best time to do this, while you still have a steady income.

And, if you find that paying off all your debt before retirement is not possible, that is okay, but you still need to understand the impact. Ongoing loan payments could impact your retirement goals. Knowing this ahead of time allows both of you to plan ahead accordingly and make informed choices.

5. Create an estate plan that both of you are okay with

Estate planning becomes especially important as you approach retirement. Even if you already have an estate plan in place, this is the time to revisit it and ensure it accounts for your current circumstances. Earlier in your working years, your focus may have been on securing your children’s future, but in retirement, other priorities, such as financial security for both spouses, may take precedence.

You need to consider how your assets will support the surviving spouse if one of you passes away. This is especially important if one partner is no longer working. Take stock of all your assets, including pension, investments, savings, real estate, insurance, and others. Decide what you want to achieve with them and who should inherit them.

In most cases, ensuring that the surviving spouse is financially protected should be the primary goal. Make sure that all your investment and savings plans have assigned beneficiaries. In the event of your death, this will predetermine who will receive the proceeds from your accounts.

401(k)s, IRAs, and other investment accounts allow you to add beneficiaries. This can include a living person, a trust, or others. You and your spouse should regularly review these designations and keep them up to date, especially after major life events such as retirement, a child’s marriage, or the birth of a grandchild.

Life insurance should also be an integral part of your estate plan. While you may be planning retirement together, unexpected events can still occur. Life insurance helps ensure that your spouse’s financial security is not impacted if something happens to you. It can offer peace of mind during an already difficult time.

It is equally important to decide who you trust to manage your affairs if you are unable to do so yourself. Appointing a reliable power of attorney can prevent hassles later. Once these decisions are made, have open conversations with your heirs, including your spouse, to set the right expectations. Given the complexity involved, working with a financial professional is strongly recommended.

6. Consider the emotional aspects, too

Big life changes like retirement can bring a mix of feelings for both partners. Your sense of identity, daily routine, and even your role within the relationship can change. On one hand, retirement may give you more personal freedom and time to do things you enjoy. On the other hand, stepping away from work can feel like losing a part of yourself. Your spouse may also need time to adjust to having you at home more often.

This is why communication matters so much during this phase. Talk openly about what a typical day might look like. These conversations help avoid misunderstandings and set realistic expectations. Revisit responsibilities at home. Household tasks may need to be redistributed now that one or both of you are no longer working. Also, talk about decision-making. Decide together who will handle financial decisions and how other important choices will be made going forward.

Planning for retirement – Together

Preparing your spouse for retirement is a combination of conversations, planning, and decisions that help both of you move into this new phase feeling confident and supported. When you take the time to plan together, you make sure you are on the same page and better prepared to handle retirement, whether you are going through it side by side or, someday, on your own. It helps ensure that both of you have the right support systems in place and can manage the years ahead. It also brings peace of mind. Keep these spouse retirement readiness tips in mind and try not to ignore any one area, because they all work together.

If you want guidance that is tailored to your specific situation, consider speaking with a financial advisor. Consider exploring our financial advisor directory to find a professional who understands your needs and can help you create a retirement plan that works for both of you.

Frequently Asked Questions (FAQs) about retirement planning for couples

1. How to help your spouse plan for retirement?

You can start by having honest, open conversations about your shared goals and individual expectations. Talk about your finances, savings, debt, pension, lifestyle plans, tax obligations, and estate arrangements. When you both understand the full picture, you can easily plan ahead and prepare for the future.

2. How important is life insurance for couples in retirement?

Life insurance is very important in retirement. It provides tax-free payouts that can protect your spouse financially if something unexpected happens. These proceeds can help cover a range of costs. It can also offer peace of mind. In addition to life insurance, you should also consider purchasing good health and long-term care insurance plans.

3. What else can couples do to ensure financial security in retirement?

Creating a customized retirement plan with a financial advisor can make a big difference. Retirement needs vary from couple to couple, and a professional can help you plan for your income, taxes, healthcare, and long-term goals.

4. How important is financial liquidity for couples in retirement?

Financial liquidity is extremely important in retirement. At this stage, your focus should shift from building wealth to accessing it when needed. If too much of your money is tied up in assets that are difficult to liquidate, it can be hard to cover your daily needs as well as unexpected expenses. Having sufficient funds in liquid assets ensures you can meet your needs well.

For additional information on retirement planning strategies that can be tailored to your specific financial needs and goals, visit Dash Investments or email me directly at dash@dashinvestments.com.

About Dash Investments

Dash Investments is privately owned by Jonathan Dash and is an independent investment advisory firm that manages private client accounts for individuals and families across America. As an SEC-registered investment advisor (RIA) firm, they are fiduciaries who put clients’ interests ahead of everything else.

Dash Investments offers a full range of investment advisory and financial services tailored to each client’s unique needs, providing institutional-caliber money management based on a solid, proven research approach. Additionally, each client receives comprehensive financial planning to help them move toward their financial goals.

CEO & Chief Investment Officer Jonathan Dash has been covered in major business publications such as Barron’s, The Wall Street Journal, and The New York Times as a leader in the investment industry with a track record of creating value for his firm’s clients.