Retiring at a different time than your spouse can present some unforeseen challenges.
You may need to reassess your spending plans.
Having open and honest conversations about your individual expectations is the best
best way to handle your new living dynamic.
Retirement is a big milestone, but not all couples go through it at the same time. Even if you’ve had conversations about your shared retirement, life can throw unexpected curveballs at you. Maybe your company is folding and you don’t want to start over elsewhere. Or, as retirement eligibility draws closer, you’ve realized want to keep working while your spouse can’t wait to leave the daily grind behind. Whatever the reason, retiring ahead of your spouse can present unique challenges. Here are five important financial and emotional considerations to plan for.
5 Things to know if you’re retiring before your spouse
1. You might not need your savings or Social Security just yet
If your partner will continue earning income, you might be able to postpone when you tap some (or all) of your nest egg. You aren’t required to start taking distributions from tax-deferred retirement accounts, like 401(k)s and traditional IRAs, until age 73. And while you can begin taking Social Security at 62, it’s by no means a requirement. In fact, delaying it will lead to a larger benefit.
“A common reason people claim Social Security early is because their friends or family members did it,” says Glenn Kirst, a lead planning excellence consultant at Northwestern Mutual. “The fear of missing out can be strong, but you really should make this decision based on what’s financially best for you and your partner.”
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2. You may have to revisit your spending plan
Transitioning to a one-income household will probably affect your monthly budget.
“The challenge is that most retirees spend more early in retirement because they now have all this free time they didn’t have when they were working,” Kirst says. “It can feel like a perpetual weekend or extended vacation, and it’s easy to spend more money.”
How will you fill your days when you’re no longer working? It’s an important consideration. Whether you’re hitting the golf course or going to yoga class, if your hobbies cost money, you’ll need to make sure your activities align with your income streams.
3. Your household dynamic will likely change
You can expect your day-to-day routine to shift when you retire. Instead of getting dressed and beginning your workday, you’ll likely have hours of free time. Meanwhile, your partner will continue working.
“That could be a big source of friction,” Kirst says. “The spouse who is still working may expect you to take on more responsibility around the house, or they may feel resentful that you’re enjoying more leisure time while they work.”
Retiring before your spouse can also put financial pressure on your partner if you’re both relying on their income. On your end, you might feel lonely in retirement and resent your partner’s work life. You can set yourself up for a smoother retirement by having an open and honest conversation with your spouse.
- How do you plan to spend your time when you stop working? How does your spouse feel about it?
- Will household responsibilities change?
- How will your financial life be impacted if you stop working?
If you are added to your spouse’s health insurance plan, how will that affect their take-home pay?
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4. It can be an opportunity to improve your relationship
It’s easy to get burned out when both partners are working full-time. Retiring frees up time that you can spend recharging your batteries. You might prioritize rest, enjoy leisure activities, and choose to take certain tasks off of your partner’s shoulders. If they’ve always handled the cooking, for example, now may be the time to step in and do that for them.
The right dynamic for you will depend on your relationship, but the idea is to help each other give and take. It might lead to less stress and fewer conflicts, especially if you’re committed to spending quality time together.
5. You may need to rethink your purpose
Many people derive a sense of identity and purpose from their work. When you retire, it’s important to find meaningful ways to spend your time. If your partner is still working, it may feel like you’re navigating that on your own. Kirst says to begin by asking yourself why you’re retiring before your spouse.
“There needs to be a good reason why you’re going to stop working,” Kirst says. “Maybe you’re burned out, or you want to spend more time with your grandchildren. But without a clear reason, you might struggle to find a sense of meaning and purpose in retirement.”
The following activities can be good jumping-off points:
- Consulting or working part-time
- Taking up meaningful hobbies
- Spending time with friends and family
Retiring before your spouse will likely affect your finances and your home life, but that doesn’t have to be a negative thing. Making a plan and keeping the lines of communication open are key. A Northwestern Mutual financial advisor can help you iron out the details so you can enter retirement feeling confident—no matter who retires first.