Should Both Spouses Retire at the Same Time?

Mar 23, 2020 | Miscellaneous

When scheduling your retirement date, your spouse (and their career) become an important consideration. Maybe you can’t wait to travel together and spend more time with family, so you might wish to both retire at the same time. On the other hand, there can be important reasons for retiring at different times.

What about healthcare? If you (or your spouse) will be relying upon Medicare, then you both might want to wait until age 65 to retire. Of course, as a federal employee you have the option of continuing your federal employee health benefits (FEHB) into retirement, in most cases. Discuss the projected cost of healthcare with your financial planner before making a decision either way.

What about your Social Security benefits? At minimum, you will both probably want to reach age 62 (the first age at which you can claim your Social Security benefits) before retiring. Of course, if you retire early you won’t be claiming your full scheduled benefits. Waiting until full retirement age (66 or 67, depending upon your birth date) means you claim the full amount. Or, you can wait a bit longer and increase your monthly checks by about 8 percent for each year that you delay (up til age 70).

On top of that, your spouse will compare their expected spousal benefit to the benefit calculated based on their own work record. They might wish to continue working in order to increase their own benefit, or the spousal benefit might work for your budget.

There’s no answer that works for everyone, with regard to Social Security planning. But since these decisions are usually permanent, it’s worth your time to weigh them carefully.

Gradual transition or take the leap? If one of you retires before the other, this can help you gradually transition into retirement and adjust to a new lifestyle. This might become a priority if you aren’t sure whether your retirement income is adequate to support your lifestyle, or if you still need to pay down debts before you both retire.

Will you have enough retirement income? Married or not, this is one of the biggest considerations when planning for retirement. You will calculate your expected pension, plus Social Security and withdrawals from your Thrift Savings Plan, when estimating your total retirement income. In addition, the two of you will calculate your spouse’s expected income from either work or their own retirement benefits. You might decide that one of you needs to continue working, either to reach the age of Social Security eligibility, or to beef up retirement savings a bit more.

We can help you weigh these options, and more concerning retirement. Just give us a call and we’ll schedule an appointment to discuss your target retirement date.

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