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Get on the Same Page: Retirement Planning for Couples

Get on the Same Page: Retirement Planning for Couples

Tips for ensuring a smooth ride into retirement

As people grow older and begin looking forward to retirement, they’ll naturally think about how best to enjoy the fruits of their labor in comfort and security. For many, this means spending more time with friends and family, starting new hobbies, volunteering, traveling more, and generally taking it easy.

For married couples, however, retirement plans can often be complicated by the need to include the post-career expectations of two people who may have very different ideas about what their Golden Years should look like. The key, of course, is communication, which can then lead to sufficient planning. 

For financial professionals, working with couples can be tricky. Each individual brings their own communication style to the table and the dynamics between spouses can be difficult to understand. To make sure everybody is on the same page, financial professionals need to take on the role of facilitator in order to foster an open and honest discussion about what both spouses are expecting their retirement years to be. Perhaps the best place to start this conversation is by making a list of what both individuals want and then evaluating whether they are currently on the right track to meet those goals. Couples should work with their advisor to prepare an estimate of how much money they’ll need saved by the time they’re ready to stop working. That target number will be driven by factors such as lifestyle, health issues, tax bracket, expected retirement age and cost of living.

Here are some key questions financial professionals can use to get the conversation started:

  • Do you want to downsize to a smaller home?
  • Move to a new city?
  • Utilize home equity for income?
  • Will one or both spouses work part-time in retirement?
  • Are one or both willing to delay retirement by a few years?

Another tactic for inspiring couples to become more involved in their own retirement planning process includes sharing some positive information on outcomes. While it’s easy for people to become overwhelmed by the seemingly endless stream of dire statistics out there showing how unprepared most Americans are for retirement, there’s also plenty of good news.

By sharing positive retirement stories, financial professionals can inspire clients to take the first steps to ensuring their own happy retirement. One of the critical first decisions to make is when to take the retirement plunge. Depending on the amount of income your clients’ assets can provide for retirement, working longer and delaying retirement may be an option they’ll both need to consider. Working longer possibly means increasing their benefits from Social Security. While working, they may wish to consider claiming Social Security benefits early under the spousal benefit. Married individuals can claim a spousal benefit at 66 – which equals the higher of the claiming spouse’s worker benefit or one half of the other spouse’s worker benefit. The claiming spouse, who can continue to work, can switch to their own retired worker benefit at a later date.

Social Security provides a survivor benefit to the living spouse; however, will it be enough? If not, it makes sense to consider steering your married clients towards insurance and financial products that can provide either a financial benefit or continue its guarantee to the surviving spouse, commonly called a “spousal continuation” benefit. It’s important to know that many financial products require a spousal continuation benefit to be elected at the time of purchase.

Working longer also means the possibility of accumulating more assets. Retirees with a high level of income rely more on their own personal income sources, such as earnings, interests and dividends, for supporting their lifestyles. This reliance makes it essential for these personal sources to have growth and continuously be able to provide income, which requires a sound retirement income plan (LIMRA, Fact Book on Retirement Income 2010). Providing a consistent stream of income that will last your client’s lifetime can be a challenge, hence you’ll need a guaranteed source that will allow you to accomplish this.

Another big factor to consider is health care costs. According to the Centers for Disease Control and Prevention (CDC), in 2009, 61 percent of adults age 65 and older had difficulty with at least one basic activity (such as hearing) or limitation with a complex activity (such as working or self-care). Your clients’ income plan for retirement should include ways for covering unexpected out-of-pocket heath care costs and long-term care expenses without taking away from their basic retirement income.

Here are some ways that you can help your married clients prepare for retirement today:

  • Help them to understand how Social Security works and what their benefit amounts will be by reviewing their Social Security Administration statements or by visiting*
  • Compare their retirement income with the total amount of expenses – necessary expenses and comfort-living expenses – to see if they have a retirement income gap.
  • Establish a distribution/withdrawal plan by accessing pools of assets at certain points in time during retirement. This can help lengthen the life of assets, gain the potential benefit of compounding growth and systematically increase your clients’ retirement income when you need it most.
  • Introduce them to financial products that can provide guaranteed payments for life or for the life of the surviving spouse, and that can provide protection for unexpected events.

Remember, it all starts with communication. The more your clients learn about retirement planning and the more decisions you help them make, the more critical it is to facilitate regular conversations between spouses to make sure they’re on the same page. Also, one of the most important pieces of advice is this: help them take the first step right now.

The sooner you can inspire your clients to start the retirement planning process, the more enjoyable and financially secure their retirement years will be.


*Contact the Social Security Administration for complete details regarding eligibility for benefits.


Doug Dubitsky is vice president of product management & development for Retirement Solutions at the Guardian Life Insurace Company of America.

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