Retirement Considerations When You and Your Spouse Have a Wide Age Gap

Age is irrelevant when you’ve found a partner you want to share your life with.

However, when it comes to finances, age matters – a lot. That’s especially true when you and your spouse have a wide age gap, which means it's even more important to have a long-term financial plan. It all boils down to this: The retirement nest egg for a mixed-age couple will need to provide income for two people who are potentially at different stages in their careers and lives, which means traditional retirement strategies won’t always be the best course to follow.

Here are a few retirement considerations when you and your spouse have a wide age gap.


The first consideration doesn’t have a price tag, but it’s very important for couples with a wide age gap to get it right. How will you handle life if one person keeps working while the other is retired? Or, will you retire at the same time?

Will it bother you if you’re working all day while your spouse tends to the garden or goes on trips with friends? It also works in reverse. If the working spouse is in a highly fulfilling job and dedicates lots of time to it, will the retired spouse feel they’re losing a sense of purpose or feel like they aren’t pulling their weight as a partner? Frankly, they might get lonely sitting at home during the day!

Maybe one spouse retires early so that both of you can stop working at the same time. Perhaps the older spouse loves their job and has no problem working a few more years. Ultimately, you need to do what feels right as a couple.

But it’s important to think through this first, because the decisions you make will impact how you plan financially.


A key variable mixed-age couples need to think strategically about is when to begin collecting their Social Security benefit.

If mixed-age couples retire at the same time, the younger spouse may receive reduced Social Security benefits for life. If the younger spouse begins collecting benefits at age 62; his or her lifetime benefit could be reduced by nearly 30 percent.

If the older spouse is the breadwinner, it might make sense for him or her to delay taking Social Security benefits for a few years. By waiting, the older spouse’s already-larger benefit will grow 8 percent each year past their Full Retirement Age (FRA) up to age 70. 


Typically, as you get closer to retirement, your mix of investments moves from a more aggressive, growth-oriented portfolio to a conservative, wealth-preserving portfolio of assets. But if your spouse is significantly younger, you might consider maintaining a slightly more aggressive portfolio later in life than what’s typically recommended for couples who are closer in age. That way your retirement savings can benefit from a little more growth potential, which will ultimately benefit the younger spouse later in life. And although that opens you up for losses during a market decline, the younger spouse can help offset them with ongoing contributions from paychecks if they’re still working.


If the older spouse is entitled to a pension, you could take a joint-and-survivor payout option. This will reduce the amount of income the older spouse collects but can help ensure the younger spouse continues receiving payments, even after the older spouse has passed away. The payouts continue until the second person dies.


Because the death benefit of permanent life insurance is so flexible, an older spouse in a mixed-age couple might consider a permanent life insurance policy with a larger death benefit, which could be used to financially support the younger spouse later in retirement.

Unlike a term policy, a permanent life insurance policy generally pays an income tax-free death benefit when the policyowner dies. Some policies even feature a rider that allows you to receive a tax-free advance on the death benefit to help cover the costs of long-term care. That means the younger spouse won’t have to deplete retirement savings to care for the other. Or, the younger spouse could use the funds from the death benefit later in retirement.


No doubt, there’s a lot to consider here, but you should feel assured there’s a retirement strategy that fits the needs of any couple, regardless of their ages. Going through the financial planning process can benefit just about anyone, but when your situation is unique it’s even more important to be on the same page with your partner, so that you both have a clear view of the steps ahead as you reach retirement together or at different times.

However you choose to handle retirement as a mixed-age couple, you’ll both enjoy that time away from work so much more when you know age is no longer a factor in your life together. It's already been accounted for.

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