Inter-Marital Planning

When one spouse is ready to retire, and the other is not

by Howard Hook

Mr. Hook is a CFP and CPA with the wealth management firm of EKS Associates in Princeton, NJ. He frequently writes, lectures and teaches on issues involving personal finance and retirement.

Preparing for retirement can be hard enough when both spouses agree it is time to begin the process. But what if one spouse is ready to retire and the other spouse is not — or is not ready for their mate to retire? Then what?

Most couples concentrate on the financial considerations of retirement and don’t spend enough time discussing the emotional aspects. Financial magazines and websites offer retirement calculators, quizzes, and checklists. As financial advisors, we go through the process of helping clients visualize an income timeline that shows when sources of income will stop and start and what their necessary and discretionary expenses will be. We walk them through the “math” – the benefits of taking social security now or waiting, taking money out of their retirement portfolio, sizing down their living situation or recommending the retired spouse find a part-time job, and putting them on a “soft” budget.

But equally important, we need to prepare couples for the emotional issues and non-financial considerations that retirement deserves. Many soon-to-be retirees tend to ask such questions as, “Do we have enough saved for retirement?” and “What will our expenses be once retired?” rather than spending an equal amount of time on an important question like “Do we both want the same type of retirement?”

Instead of starting with the financial questions, I strongly suggest that couples start with a simple three question exercise meant to start a conversation about the more important non-financial part of retiring at different times.

Imagining Retirement

The first question you both should answer is “What will my typical day look like once I am newly retired?” Reviewing your answer with your spouse’s can reveal key differences which you can discuss and work through before retiring. For example, if you wish to stop working and travel more, but your spouse’s typical day still includes work, then you may need to come up with a compromise where you gradually travel more and your spouse gradually works less. Similarly, if you would like to winter in the warm weather now that you’re retired and your spouse is still going to work, you will have to come up with some kind of arrangement that suits you both – say, spending several weeks of the working spouse’s vacation time as a “trial” run in the warm weather. Agreeing on a strategy ahead of time can help prevent ill feelings after the fact.
Comparing notes can also reveal other hidden issues best hashed out ahead of time.

An example of this can be the difference in the amount of time each spouse expects to spend with the other once retired. Take, as an example, the case of Bob and Karen. The couple lives in the suburbs and Bob works a full day in the city and usually doesn’t return home until dinner time. Karen, meanwhile, works part-time 10 minutes away and is home hours earlier. For the better part of their married lives this has been the arrangement and now after all those years this situation is about to change, big time. For Bob, who is retiring from work, there may be a strong desire to spend more time at home and “relax.” Well, for Karen, who is used to being home several hours alone each day, this may “infringe” on her alone time or her ability to get things done around the house. Explaining this to Bob may be difficult since he cannot understand Karen’s desire to be alone. “Why wouldn’t you want me around more? We can do all these things together now that I am retired.” A compromise can be struck, whereby Bob helps out with some of the household chores, allowing Karen to retain her alone time. This can free up other time that can be spent together.

Aligning Goals

The first question you both should answer is “What will my typical day look like once I am newly retired?

The next two questions should be discussed today, even though they look into the future. Both spouses should answer the question “Ten years from now, what do I want my typical day to look like in retirement, assuming both of us are healthy?” This answer often looks different than the answer to the first question. Many times the differences in the answers to the first question disappear as both spouses’ goals come back into alignment (as, likely, do their work schedules). More than likely the financial issues surrounding retirement will have been resolved (if not, then you will be back at work) and with that the issue of being ready for retirement will be resolved. However, those issues are now likely to be replaced with different issues.

One such issue that can come up is relocation. As you get older, your patience for the very cold winters or too hot summers may begin to wear thin. Thoughts of relocating to a more desirable climate begin to enter your mind. But what if you hate the winters and your spouse hates the summers? Relocating to a place where the winters and summers are more moderate may seem like the ideal solution, but in reality finding that “perfect” place is easier said than done.

You may both agree that you ideally want to spend time in a different climate, but only one of you is willing to relocate because doing so would mean being too far away from your children and/or grandchildren and so you would be spending less time with them if you relocated. For many, the expense of purchasing a second home to be able to split your time is too great, and is just not an affordable answer. Renting for a specified period of time (say, a place in the warm weather from December to March, for example) rather than purchasing another home may allow you to spend more time in your ideal climate while remaining close to family. Finding a place that is more centrally located so that travel back and forth is easier can also solve the problem of having to choose one or the other.

Health: An Imposing Challenge

The third and final question you both should think about and discuss now is “What is my vision of what retirement looks like for us both of us 15 years from now?” For this question, health issues should be taken into consideration since as you age health will play a bigger role in determining how you envision this phase of retirement. The answers to this question may also help with issues raised when answering the first and second question. Relocating away from your family may not be as appealing if you feel strongly that you want to be near your family if you were to become ill. You may rethink not travelling so much during your early retirement years when faced with the realization that your health may at some point in time preclude you from doing the travel you initially may have been willing to put off. Indeed, it may change your mind and help reshape how you wish to spend the intermediate portion of retirement.

The answers to these three questions are not meant to be a strict roadmap for you and your spouse to follow in retirement. Instead, they are meant to help identify those initial differences that spouses may have that if rectified ahead of time can start retirement off on the right foot. To help spouses realize that, the next leg of the journey you will embark on together will be a long one. The answers to these questions that you will share together will help highlight the fact that with retirement comes changes which are much more than just financial. There will be decisions you will need to make together. These decisions will be as equally important as the ones you made all those years ago when you were first married. “Do we want to start a family?” and “Where should we raise our children?” will be replaced with different but equally important questions and answers. The answers to those questions if thought through properly and if given the proper respect can make retirement the most fulfilling and exciting time of your life.