Retirement Planning for Couples

Retirement planning is an essential activity in your financial life, and that’s all very well if you’re just planning for yourself. Nearly half of families have no retirement account savings at all, and the average retirement savings of all families is less than $100,000.

But since so many families have zero savings, and since the higher end of the spectrum can pull up the average, the median savings, or those at the 50th percentile, may be a better gauge. The median for all families in the U.S. is just $5,000, and the median for families with some savings is $60,000.

In a recent study, it was discovered that 54% of women expect that their partner will be an important source of retirement income, while 36% rely on their partner as a backup plan in case they can’t work anymore.

Planning your future with your significant other is a great thing to do. Here are some key points to consider:

Common Goals

You may be surprised to find that you have different views on how you’d like to spend your leisure years. Discussing this with your spouse will get you to common ground and give you a common goal to work toward.

“What are you going to do with your time? What things would you like to accomplish? Where would you like to go? Where will you live? Would you like to travel? Where to? How much money will you need?” These are the questions that are worth considering.

Saving

If either of you have an employer-matched 401k, then this would be a primary point of interest for you. Otherwise an IRA, solo 401k, or non-matched employer-sponsored plan is something to look into.

Taxes

This should be high on the list of things to take into account when choosing where you collectively save for your future. Put together a strategy so that you get to retirement with tax-deferred funds in traditional IRAs and 401(k)s, tax-free funds in Roth accounts, and if necessary, already-taxed funds in a brokerage account. Doing so will allow you to minimize your tax burden as much as possible.

Stay up-to-date

The beneficiaries on your retirement accounts and life insurance trump your will. Keep those designations up-to-date.

Communicate

It’s not just retirement. According to a study [3], a quarter of couples disagree on the amount of their households’ investable assets, and 43% couldn’t identify their spouse’s salary. 60% of couples and almost half (49%) of Boomers don't have any idea how much their Social Security benefit might be.

Communication is essential if you want to avoid making some major mistakes on this front. You each need to know how and where your money is invested, along with details like account logins and where paperwork is filed.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC