Debbie and Carl in Mariemont: We’re trying to figure out if we should retire at the same time, or if it makes more sense to space out our retirements. Any thoughts either way?
A. First off, it’s nice that the two of you are actually getting to choose when you retire! Not everyone is afforded this luxury. In fact, a recent Nationwide survey found that one in two people are actually forced to retire earlier than they had originally planned.
Let’s look at some reasons why you might stagger your retirements. A big one is healthcare. If neither of you are eligible yet for Medicare but one of you keeps working (and has employer-sponsored healthcare coverage), the other can likely join that employer plan. This way, there’s no need to buy insurance elsewhere. Another reason is income. What kind of retirement lifestyle are you hoping for? Have you figured out if your income stream from retirement accounts and other sources will be sufficient? If you realize you have a budget gap, then it makes sense for one of you to keep working to help shore up your finances. And of course, if one of you enjoys their job then there’s no reason to quit!
On the flip side, if you decide to retire at the same time, you need to think about the huge lifestyle change this will trigger. Are you both prepared to be spending a whole lot more time together? For the last few decades, you’ve each likely gone to work for eight or so hours then came home and spent a few hours together in the evening. In retirement, you’ll see each other from the moment you wake up to the moment you go back to bed. That’s why it’s critical to have a plan for what each of you will do separately with your time (volunteering, a hobby, etc.), as well as what you’ll do as a couple.
The Simply Money Point is that retirement, no matter when it happens, is usually one of the biggest life transitions someone will ever experience. You two know yourselves the best. Do you want to go through all the ups-and-downs together, at the same time? Or do you think it’s better – for your relationship and your finances – to ease into it, one at a time? Only you can answer that.