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5 Tips to Help you Prepare for Retirement as a Couple
5 Tips to Help you Prepare for Retirement as a Couple
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5 Tips to Help you Prepare for Retirement as a Couple

Doris Kendi
July 2, 2022

Retirement can be fun, and even more fun when we get to spend it with a person we have shared a better part of our life with as couples. But retirement planning as a couple can be challenging, especially considering your opinions hold the same weight. 

You and your partner will have long debates and misunderstandings about how you will spend your retirement and invest towards it. You will have awkward conversations and reach many compromises for the common good. 

But how well you smooth over those conflicts and come to fair and peaceful agreements will dictate how smoothly you prepare and plan for your retirement. 

This article will discuss five tips that will help you and your partner prepare for your retirement as a couple smoothly. 

Also read: Yours, Mine, Ours? How Couples Can Manage Money

Be on the Same Page

You and our partner probably have different ideas about spending your retirement years. You might be planning to have a quiet farm life, isolated from everyone, but your significant other wants to spend their retirement vacationing in different cities worldwide. What a bummer, right?

To get the best out of your retirement, before you start making any plans or preparation, talk to your partner and ensure you are on the same page about everything.  Some important things to decide before you start your goals are:

How to Invest: Decide with your partner what investments you should make that will replace your current incomes when you retire and how you will approach the investments. Will you invest together for retirement as a couple or separately to lower your risks?

Also read: How To Turn Your Savings Into Investments

What to do in Retirement: Talk to your partner about your retirement goal and ensure you decide how you will spend your retirement. Your decisions will help you plan your retirement budgets and determine how much you will need to save.

Save and Invest for Retirement

With the cost of health care and long-term care in nursing homes skyrocketing, setting up solid long-term investments that will help generate income is the only way you and your partner can survive in retirement. 

Just to maintain your current lifestyle, you must generate 70%-90% of your current income in retirement to live independently and not burden your kids with black tax.

Some long-term schemes to invest in for your retirement are:

  • Real Estate and Real estate Investment Trusts
  • Government Bonds
  • Unit Trust Funds
  • Companies Stocks and Shares
  • High-yield Savings Account and Certificate of Deposits

Apart from those investments, you should also ensure your family is adequately insured by getting vital covers like health, home, life, and Education Insurance for your kids.

You should also consider enlisting the help of a financial advisor who will guide you in drawing solid investment strategies that will separate your retirement investments from other investments and equip you with financial knowledge to help you maximize your retirement saving accounts.

Plan to Retire Late and Retire Separately 

Early retirement is not an option for many people. First, the rising cost of living and inflation means you have to save and invest a lot more if you want to cushion yourself from their effects. And second, increasing life expectancy means you will be spending upwards of 20 years in retirement. 

Also read: 7 Reasons Why Retirement Planning is Important

With that in mind, retiring late and separately if one partner still has the energy to keep working is advisable.

Retirement can abruptly change your lives as couples, and retiring a few years apart, can help you strategize and adapt to what will soon be your new normal. Social advantages aside, let’s look at how retiring separately is an excellent financial move for every couple:

  1. You Save more - With one partner working and generating income, you can keep fattening your savings account. Retiring at the same time, on the other hand, would shorten your savings lifespan.
  2. Investments Stay Intact - You get to delay cashing out of investments such as the NSSF pension funds.
  3. Enjoy Employment Benefits - If your employer provides benefits such as health insurance or matching your pension contribution, you can still enjoy these benefits that save you much money.
  4. Budget - You and your partner can make and experiment with different retirement budgets without drastically changing your lifestyle until you create the perfect budget to help you towards retirement.

Think of Worst-case Scenarios

A lot can happen between now and retirement. As you and your partner prepare how you will spend your sunset years, it won’t hurt to take a break and think about scenarios that could see you not achieve that goal together. Illness, death, and divorce are the worst-case scenarios to consider when making your couple's retirement plan.

If you and your partner are combining your retirement plan, you should create a clause that decides how those savings and assets you have acquired together will be divided. Signing a prenuptial or postnuptial agreement contract will help you avoid conflict and wasting money on legal fees should you decide to divorce.

Also read: Money and Me: Tales of a Lonely, Retired Pensioner in the Village

Alternatively, you and your partner can decide to have separate retirement accounts that you control individually. In case of disputes, you can part ways amicably.

If you and your partner are bringing home an income, you should prepare to change strategies when one partner can no longer contribute their share—becoming disabled or catching an illness that leaves them unable to work forever and cutting their income stream.

When this happens, you should have a backup plan that you can fall on so that your entire retirement preparation doesn’t crumble.

The death of a partner is another event that can occur and throw retirement plans out of the window, especially if they were the sole breadwinner or significant contributor to your retirement fund. You should ensure that you have the right life insurance cover and updated will that gives your retirement funds to your partner will help them have an easier retirement.

Keep your Beneficiaries in Mind

Planning for retirement shouldn’t make you lose sight of now. As you stash money in your bank accounts as a couple, you shouldn’t forget your other responsibilities like saving and making investments for your children's education or ensuring they have a roof over their heads. Prepare for retirement, but also ensure that all your dependents live a comfortable life now.

A big part of retirement preparation will also involve estate planning. You as a couple won’t be here forever; death is inevitable. You should plan to see that all your wealth goes to your rightful heirs. 

Keeping updated wills and getting a power of attorney will help you transfer the estate to your children and ensure they don’t struggle financially after your demise.

Wrapping Up

Retirement preparation is a long-term financial undertaking; it will be time-consuming, and confusing, and you will need to make changes along the way. But in the end, it will all be worth it.

Starting early and growing your retirement fund as a couple is a good way to save and invest more, putting yourselves in a position where you can generate enough money to replace your income when you retire.

Successful retirement preparation as a couple has immeasurable benefits. You get to accumulate more wealth that lasts longer, bond over more meaningful conversations, and if it goes well, you can retire way earlier and spend more time together. 

Also read: Couple Goals: 3 Transitions That Challenge Working Partners

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Doris is a finance professional, freelance writer and SEO expert. She has experience helping businesses of all sizes create content that helps improve their site quality and increase their online traffic. She is a personal finance and wealth creation enthusiast and a frequent contributor to Money254. Visit Doris' personal website to learn more about her work.

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