Question:

My husband and I got married later in life and we never combined our finances. I trust him to manage his money, he trusts me to manage mine, and we’re happy that way… But as we get closer to retirement, I’m more aware that we need to think about our shared financial goals. So, how do we start planning for retirement as a couple?

Answer:

Planning for retirement as a couple is like designing your dream vacation — but instead of just packing your bags, you’re preparing for decades of financial freedom and adventure. It’s a journey best undertaken together, and while it can feel daunting, a little strategy and a lot of communication will set you up for success.

To start, take stock of your financial situation. Think of this as your “financial check-in” moment. Sit down together to review your financial standings — both individually and as a couple. This means pulling out all your paperwork (or a computer or tablet on which you can easily look at your electronic statements), including:

• Income sources (current salaries, pensions, or side hustles)
• Savings (how much you’ve individually saved for retirement, including 401(k)s, IRAs, or brokerage accounts)
• Debts (mortgages, credit card balances, or other loans)

The goal is not to micromanage each other’s finances, rather it’s to get a clear view of what you’re working with individually and identify gaps (or overlaps) in your plans.

Articulate Your Shared Goals

Once you’re both on the same page, it’s time to define your shared retirement goals. Start with a simple question: What does retirement mean to you? Is it a life of travel and adventure? Or perhaps downsizing to a simpler home? Start with open and honest conversations about what your ideal “golden years” will look like. But be specific. Do you envision working? And if so how much? How do you think you’ll spend regular days? Will you be more social than you’ve been in the past — or less? Then once you’ve defined your dreams, attach numbers to them. You can use online retirement calculators (like those from Nerdwallet or Bankrate) to estimate how much you’ll need annually to sustain your desired lifestyle, and from there you can create a joint budget.

And that budget is incredibly important — a well-thought-out spending plan is the foundation of any retirement plan. Start by listing anticipated expenses in key categories like housing, healthcare, transportation, and entertainment. Then, consider how inflation might affect these costs over the decades. For example, healthcare expenses are likely to increase as you age. Or if you’re planning to relocate, you’ll want to research cost-of-living differences in your desired area. With a detailed sense of how much this new life is going to cost you, you’ll have a clearer picture of how much you’ll need for later — and where you might need to adjust your spending and saving habits in the here and now.

Coordinate Retirement Savings
Speaking of adjustments, although you and your partner don’t need to combine accounts in order to plan effectively, you do need to coordinate your savings and retirement contributions. For example, if either of you has access to an employer-sponsored 401(k) with matching contributions, prioritize those — it’s literally free money! Likewise, if one of you earns significantly less, consider opening a spousal IRA to help close any savings gap.

Also, don’t lose sight of the fact that there’s strategy involved with your Social Security claiming decision, too — for example, delaying Social Security until age 70 can significantly increase your monthly payouts. So make time to sit down together and review your latest statements. You can discuss when and how each of you will claim Social Security benefits so you can optimize your combined income.

Perhaps most importantly, understand that no one “plans for retirement” in a single conversation. Your financial situation (including your goals and your income) will evolve over time. Make it a habit to check in on your progress at least annually or whenever a major life event occurs so you can revisit your retirement budget and investment strategy to ensure you’re still on track. On that note, make sure you take time to celebrate hitting financial milestones together. When you take time to collaborate in the here and now, you set yourselves up for decades of financial security and a stress-free retirement.