Photo by Travis Grossen on Unsplash

Retire with an Age Disparity

If you and your spouse have a large age gap, you’re not alone, especially if you’re in your second marriage. While only 5% of men in their first marriage are married to a woman 10 years or younger than they are, that figure jumps to 20% in second marriages (Pew Research). If you have this age gap, you need to carefully plan how to retire as a couple with age disparity.

How to Retire as a Couple with Age Disparity

In the majority of marriages with a large age disparity, the man is older than the woman. Combine that with the knowledge that in the United States women (life expectancy 81.4 years) outlive men (life expectancy 76.3 years) by about five years (Health System Tracker), and, as a couple, you have important decisions to make about retirement.

When Will Each Spouse Retire?

Your first decision is when will each spouse retire? The younger spouse may not want to retire in her mid-50s as she may be hitting her career stride and be at the peak of her earning potential. Her spouse may not want to work into his 70s just so both of them can retire together.

Insurance Considerations

Indeed, having the younger spouse continue to work while the older one retires is a clever idea. The younger spouse will likely have health insurance, which the older spouse can join. Then the couple can delay signing up for Medicare.

Financial Considerations

Besides insurance perks, if the younger spouse continues to work, also consider the financial perks. If one person continues to work, the couple won’t have to use much of their retirement savings initially since they have a steady income coming in. This means that the younger spouse will be able to stretch the retirement savings for her life span.

What Do You Each Plan to Do in Retirement?

Retire with an Age Disparity
Photo by Max Harlynking on Unsplash

Another consideration is what each plans to do in retirement. The older spouse may want to travel while he is still healthy enough, especially if his younger spouse won’t retire for another 10 years or so. If this is the case, you’ll need to adjust your financial budget to accommodate the increase in spending that travel requires.

When Will You Take Social Security?

Finally, decide when you plan to take social security. The longer you can delay accepting benefits, the better for both of you immediately because you’ll get more money.

Delaying receiving benefits is also good in the long-term for the younger spouse because she will get more money over her lifetime. For instance, say you will receive $1,000 in benefits if you begin collecting social security at 65. If you wait to collect beginning at 70, you will instead receive approximately $1,300. That means even after you pass, your spouse will get survivor benefits and continue to receive monthly social security at this higher rate.

Final Thoughts

Carefully consider how to retire as a couple with an age disparity. You can be successful, but you must consider each partner’s financial situation, retirement desires, and health when making the best decisions for retirement.

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Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her reading a good book, cooking, or traveling. She resides in New York where she loves the natural beauty of the area.

MANAGE YOUR MONEY TOGETHER

Here are some simple guidelines for DINKS to build wealth:

1) Collaborate: Meet regularly to talk about money, set goals together, track and monitor them.

2) Understand and respect your partner. Take time to understand your partners values about money.

3) Watch the numbers. Get a budget, monitor your spending and track your net worth.

4) Max your retirement. Maximize contributions to your tax deferred retirement accounts.

5) Invest in stock. Stocks perform better than bonds or cash.

6) Avoid high interest debt. Credit cards and title loans are financial cancer.

7) Diversify. Don't put all your eggs in one basket.

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