When it comes to retirement planning, there are plenty of issues to discuss and decisions to make.
With changes in the economy and health care in the US, the protections that many once relied on for old age are no longer reliable. Considering that Americans are living to be 80-90+ years of age, the concept of retirement has also begun to look quite different. The retirement age of 62-65 is simply not practical for many people who anticipate the possibility of living another 20-30 years. Pensions, retirement funds and social security payments as a primary source of income in the current economy are simply not adequate for a lot of people. Many find the prospect of working part-time in their golden years a necessity – and for some – a welcome opportunity.
A recent article in the Wall Street Journal indicates that as Baby Boomers get closer to the traditional retirement age, they are more likely to put it off due to the uncertainty of the issues listed above. In addition to financial uncertainty, many are concerned that their health and vitality will fail when they stop working. Others disagree, certain they will find things to keep them busy and healthy. All of these underlying issues make for lively discussion when couples consider their retirement.
According to a recent survey by Fidelity Investments, 62% of couples do not agree on when they will retire. Almost half of couples (47%) do not agree on whether they will continue to work part-time in retirement. And one-third of the respondents do not agree on their retirement lifestyle.
Here are some specific issues that need to be addressed when one spouse is retiring before the other.
· Discuss your vision for what day-to-day life will look like when one is retired and the other is still working.
If one of you plans to retire early while the other one continues to work, talk about how that affects your roles in the family. The early retiree (often the man, as men are generally older) may envision himself golfing all day, while the working spouse expects the laundry to be finished, shopping to be done and dinner to be underway when she gets home. Most early retirees don’t really envision their retirement as days filled with household chores and shopping. However, when one person is working and the other isn’t, it makes sense to share these responsibilities. Role clarification, particularly if this is a change from the norm, is critical. Talk about it. Explore options that are win-win. Find the middle way that will satisfy everyone.
· Discuss your fears and concerns about the increased health risks of early retirement.
Many of our concerns are based on fears from past experiences that may or may not be relevant to your present situation. If your concern that people die when they stop working is based on something that happened to your grandfather thirty years ago, you may need to rethink that. While it is true that people need a purpose in life, need to feel they are contributing to their family or society and tend to have better health and mental health outcomes when they have some structure and keep active, these can be attained without a traditional job. Rather than focusing on the ‘what-ifs’ based on old fears and beliefs, spend your time crafting a life in retirement that will meet these needs for purpose, contributing, belonging, structure and activity.
· Discuss the financial implications of early retirement honestly and openly.
This concern is viable and needs to be carefully considered. If you haven’t done so before now, it is time to put all the cards on the table. Full disclosure is required to make good decisions and develop financial plans that will keep you solvent during retirement. If working a few more years means a more solid financial future for your retirement, it may make sense to consider working a few more years. For those who will be drawing social security, the pay off for waiting until later increases the amount of your check significantly up to age 70. There are also tax implications for taking withdrawals from retirement accounts at different ages that need to be considered. Consider talking to a financial planner about these issues.
· Discuss whether you will continue to work part-time, work-from-home or return to work after early retirement.
If you need to recover from the stress of full time employment, perhaps a break from the 9 to 5 for six months to a a year would be adequate. Your working spouse may be more open to this arrangement than the prospect of your never working again. It is important for those who are working at home to have the respect of the other spouse with regard to their time, the need for privacy and space. Some spouses feel resentment about continuing to go to work every day when their beloved has no work responsibilities or gets to stay at home to work. This needs to be addressed sooner, rather than later. If you decide not to work part-time or return after a break, make sure it is a decision you both agree to in advance. One major consideration is that it may be difficult to find part-time employment when you are older. Figure this out before you leave your career!
· Discuss the ‘honey-do’ list.
Often the spouse who retires early, works part-time or works from home finds s/he has a long list of errands and chores they are expected to complete. While taking on more responsibilities at home may be agreeable, ensure that your work time comes first unless you are self employed and have the flexibility of working when you want. Balance is the key. Respect for your spouse’s work and schedule is also critical – whether s/he works from home or the office. If you find this happening despite talking about it, you may be dealing with underlying resentment that needs to be addressed.
If you find that you have difficulty discussing these things honestly or coming to agreement, talk to a therapist.
Brandon, Emily. "The 10 Most Difficult Retirement Decisions." US News, Web. 12 Dec. 2013.
Hughes, Kathleen A. "How Couples Decide When to Retire." Wall Street Journal, Web. 12 Dec. 2013.