Saving for Retirement as a Couple: What to Consider

The earlier you begin conversations about your retirement goals, the easier and the less stressful it will be to turn your plans into reality. 

Here's how to plan for retirement as a couple: 

Create your shared vision for retirement

Planning for retirement starts with honest, frank conversation. The talk should go beyond numbers, to what you each hope for in retirement. For example, how long do you think you'll want to keep working? Will you retire together or at different times? Do you want to move, and to where? A little house near the beach? An apartment close to the grandkids? 

Although your initial thoughts may change, formulating a vision for your ideal retirement can help you plan for the money you’ll need to make your dreams a reality. 

Build a savings strategy

Armed with an initial idea for your retirement, you can now focus on saving and planning for your new life. Depending on your situation, you may use one or a combination of the following: 

• Employer-sponsored retirement accounts: Employer-sponsored retirement plans, such as a 401(k) plan, are some of the most commonly used retirement planning tools. They are investment accounts. You can choose to invest in mutual funds, exchange-traded funds, stocks or bonds – and often in a combination of those. 
• Individual retirement accounts (IRAs): If you don't have access to an employer-sponsored account, or simply want to supplement what one provides, you can open an IRA. Offering similar tax advantages to 401(k) plans and the like, these accounts allow you to invest for your future but aren't tied to your employer. 
• Annuities: Annuities are a type of financial contract that issue installment payments to provide you with a steady source of retirement income.
• Health savings accounts (HSAs): Some people use HSAs as another supplemental tool for retirement planning. They offer triple tax advantages. Contributions to an HSA are made with pre-tax dollars, the money in the account grows tax-free and withdrawals made for qualified health expenses aren't taxable as income. 

Consider income needs and distribution plans

Consider how much you make as a couple, and what expenses you're likely to have in retirement. Common expenses include mortgage payments, utilities, transportation, travel and taxes. If you have other expenses you'll need to cover – such as a mortgage on a vacation property or pricey hobbies – you may need to save a larger sum. 

Also consider estate planning, and what kind of legacy you want to leave. For instance, if you want to provide an inheritance for your grandchildren, or leave money to a charity, you'll need to keep those plans in mind. Consider a whole life insurance policy to help you build a strong financial foundation. 

Factor in health care and out-of-pocket costs

Health care costs can be a significant expense. While baseline Medicare (sometimes called Original Medicare) can be invaluable, it doesn't cover all of your health care expenses. You’ll probably want to add extra-cost Medicare Advantage coverage. Sold by private insurers, Advantage plans provide prescription drug coverage and additional benefits like vision, dental and hearing. 

If you hope to retire before you turn 65, when Medicare kicks in, you need to plan – and budget – for health care coverage until you’re eligible for federal coverage.  

Finally, you need to think about other costs like the cost of long-term care or assisted living. 

Optimize spousal benefits and Social Security income

Social Security plays an important role in many retirees' plans. You can usually begin receiving benefits as early as 62, but waiting until 67 – the program’s full retirement age – or later may make more sense for some people. If your spouse was a stay-at-home parent, they may be eligible for spousal Social Security benefits. 

You can use the Social Security calculator to estimate your payments at different retirement ages. 

Adjust your plan for different scenarios

No matter how carefully you plan, life has a way of throwing obstacles or changes in your path. You may need to adjust your plan if your circumstances change. For example, if you become widowed. Without your partner, you may need to offset their income, pension or Social Security benefits. 

You can minimize the financial loss by ensuring you and your partner have adequate life insurance coverage. If you pass away, a life insurance policy pays out a death benefit to your spouse (or other named beneficiary), which can help them live in comfort. 

Optimize with professional help

The complexity and uncertainty of retirement planning makes it a good idea to consider enlisting professional help. Certified financial planners, financial advisors, and insurance agents and representatives can provide critical advice and guidance based on your unique situation. 

A financial planner or advisor can help you decide how much money you'll need to save to retire comfortably, how to invest your money to achieve those goals, how to adjust your investment portfolio and what insurance products you may need. 

An insurance agent or representative can help you review your life insurance and annuity options and choose the right coverage. And, they can help you decide if you need long-term care insurance or other forms of coverage. 

Even if you feel comfortable handling your initial retirement planning on your own, working with a professional for occasional check-ins can help you stay on track.