For couples, the key to a smooth transition to retirement is making sure the lines of communication are wide open.
You’ll need to discuss the timing as well as your individual visions for what your new way of living will look like.
Then you can prepare your finances and perhaps a joint legacy plan.
Retirement is a big milestone for couples—both financially and emotionally. It’s about stepping back from work, enjoying more free time, and making memories with people you love. It’s easy to assume that you and your partner are on the same page—especially if you’ve been together for a long time. But are you sure?
When it comes to effective retirement planning, the key to a smooth transition is making sure the lines of communication are wide open. Then you’ll be able to create an action plan that’s aligned with your shared values. Below are five important conversations couples should have before retirement.
1. When do we want to retire?
Your retirement timeline will play an important role in your financial plans. On average, Americans plan to work until age 65, according to the 2023 Northwestern Mutual Planning & Progress Study. Do you and your spouse see yourselves retiring together? Or will one partner step out of the workforce before the other? Andrew Weber, CFP® professional and senior director of planning philosophy, research and guidance at Northwestern Mutual, says it’s best to have this conversation as soon as possible.
“If one of you has to continue working and the other doesn’t, that may feel unfair and could create tension in the relationship,” he says.
There are also financial considerations to think about. If one spouse retires, you may need to draw on your nest egg to make up for lost income. Alternatively, you might choose to reduce your expenses and live off of the working spouse’s earnings until they retire. Your retirement age will also determine how much you need to save for retirement.
2. How do we want to spend retirement?
Retirement opens up time that was once devoted to working. Think about what a successful retirement looks like to you, then invite your partner to do the same.
“Do both partners have the same vision for how they want to spend retirement?” Weber asks. “One person might want to retire abroad while the other wants to hang out with the grandkids.”
Opening the lines of communication can help you bridge any gaps. That might require a little compromise on both ends. The goal is to create a retirement vision that feels good for both of you. You can then create a financial plan that’s built around those joint goals.
Are you on track for retirement?
See how much monthly retirement income you may have based on what you’re saving now.
3. How much will it cost?
Now for the nuts and bolts. As a couple, your savings target will depend on your retirement vision and timeline. Begin by estimating what your annual expenses will be when you’re no longer working, then multiply that amount by the number of years you plan on being retired. This won’t be an exact calculation—the goal is to get a ballpark idea of what your retirement will cost. "After estimating your spending, you should project your current balances to see how well your assets match with the spending you want, Weber says. “Then subtract any funds you’ve already set aside for retirement. The remainder represents your savings target.”
“It’s also important to think about risks to your retirement income,” Weber says. “That includes taxes, inflation, market volatility and health care costs. Also, what will happen if one of you needs long-term care? That could be a potentially huge expense.”
An experienced financial advisor can help you plan accordingly. They should be able to run different scenarios and guide you in choosing the right asset allocation based on your age, risk tolerance and financial goals. Tax and estate planning are equally important.
4. Are we emotionally prepared for the transition?
Retiring will affect more than your finances. It also marks the beginning of a new chapter in your life. Like any transition, that can come with ups and downs.
“You're probably used to getting up every morning, getting dressed and going to work,” Weber says. “And then, all of a sudden, you don’t have to do that anymore. That can affect your sense of purpose and identity.”
Who are you apart from your career and working life? You may feel drawn to:
- Taking up new hobbies
- Spending time with friends and family
You and your partner can also talk about things you’d like to do together in retirement. That might involve trying new hobbies together, going on date nights or taking trips. You’ll likely be seeing more of each other, which can take some getting used to.
5. What’s our legacy plan?
Talk openly about what kind of legacy you want to leave behind. You may want to support charities or organizations that are meaningful to you, or gift assets to your children and grandchildren—either during your retirement or after you’re gone.
“All of these decisions will affect how much you can spend in retirement, and you have to be on the same page as your spouse,” Weber says. “One of you might want to fund your grandchildren’s 529 plans, while the other really wants to travel.”
It doesn’t have to be an either/or situation. With the right planning, you can leave a legacy without sacrificing your retirement goals. What matters most is using your money in a way that makes you feel good and is aligned with your values. Just be sure to communicate your plans with your children so they know what to expect financially.
Having open and honest money conversations with your spouse is always important, especially when it has to do with the future. It can set the stage for a smooth transition into retirement and beyond.