Question Submitted by a Client: 

My husband and I got married later in life and we never combined our finances. I trust him to manage his money, he trusts me to manage mine, and we’re happy that way… But as we get closer to retirement, I’m more aware that we need to think about our shared financial goals. So, how do we start planning for retirement as a couple?

Our Answer: 

Planning for retirement as a couple is like designing your dream vacation — but instead of just packing your bags, you’re preparing for decades of financial freedom and adventure. It’s a journey best undertaken together, and while it can feel daunting, a little strategy and a lot of communication will set you up for success.

To start, take stock of your financial situation. Think of this as your “financial check-in” moment. Sit down together to review your financial standings — both individually and as a couple. This means pulling out all your paperwork (or a computer or tablet on which you can easily look at your electronic statements), including:

• Income sources (current salaries, pensions, or side hustles)
• Savings (how much you’ve individually saved for retirement, including 401(k)s, IRAs, or brokerage accounts)
• Debts (mortgages, credit card balances, or other loans)

The goal is not to micromanage each other’s finances, rather it’s to get a clear view of what you’re working with individually and identify gaps, or overlaps, in your plans.

Articulate Your Shared Goals

Once you’re both on the same page, it’s time to define your shared retirement goals.

Start with a simple question. What does retirement mean to you? Is it a life of travel and adventure? Or perhaps downsizing to a simpler home? Do you envision working throughout your golden years? And if so, how much? How do you think you’ll spend regular days? Will you be more social than you’ve been in the past — or less? 

Once you’ve defined your dreams, attach numbers to them. You can use online retirement calculators to estimate how much you’ll need annually to sustain your desired lifestyle, and from there you can create a joint budget. And that budget is incredibly important — a well-thought-out spending plan is the foundation of any retirement plan. Start by listing anticipated expenses in key categories like housing, healthcare, transportation, and entertainment.

Then, consider how inflation might affect these costs over the decades. For example, healthcare expenses are likely to increase as you age. Or if you’re planning to relocate, you’ll want to research cost-of-living differences in your desired area.

With a detailed sense of how much this new life is going to cost you, you’ll have a clearer picture of how much you’ll need for later — and where you might need to adjust your spending and saving habits in the here and now.

Coordinate Your Retirement Savings

Although you and your partner don’t need to combine accounts to plan effectively, you do need to coordinate your savings and retirement contributions.

For example, if either of you has access to an employer-sponsored 401(k) with matching contributions, prioritize those — it’s free money! Likewise, if one of you earns significantly less, consider opening a spousal IRA to help close any savings gap.

Also, don’t lose sight of the fact that there’s a strategy involved with your Social Security claiming decision, too — for example, delaying Social Security until age 70 can significantly increase your monthly payouts. So make time to sit down together and review your latest statements. You can discuss when and how each of you will claim Social Security benefits so you can optimize your combined income. 

Continue the Conversation with Elements Wealth Management

No one “plans for retirement” in a single conversation. Your financial situation, including your goals and your income, will evolve over time.

Elements Wealth Management is here to help you adjust your plan whenever a major life event occurs so you can feel confident that your family’s retirement plan and investment strategy are on track for years to come!