The Conversations Couples Should Have Before Retirement

Andrew Weber is a senior director of Planning Philosophy, Research and Guidance at Northwestern Mutual.

Retirement is a big milestone for couples—both financially and emotionally. It’s about stepping back from work, enjoying more free time, and making memories with people you love. It’s easy to assume that you and your partner are on the same page—especially if you’ve been together for a long time. But are you sure?

When it comes to effective retirement planning, the key to a smooth transition is making sure the lines of communication are wide open. Then you’ll be able to create an action plan that’s aligned with your shared values. Below are five important conversations couples should have before retirement.

1. When do we want to retire?

Your retirement timeline will play an important role in your financial plans. On average, Americans plan to work until age 65, according to the 2024 Northwestern Mutual Planning & Progress Study. Do you and your spouse see yourselves retiring together? Or will one partner step out of the workforce before the other? Try to have this conversation as soon as possible. Because if one of you has to continue working and the other doesn’t, that may feel unfair and could create tension in the relationship.

There are also financial considerations to think about. If one spouse retires, you may need to draw on your nest egg to make up for lost income. Alternatively, you might choose to reduce your expenses and live off of the working spouse’s earnings until they retire. Your retirement age will also determine how much you need to save for retirement.

2. How do we want to spend retirement?

Retirement opens up time that was once devoted to working. Think about what a successful retirement looks like to you, then invite your partner to do the same. Do you both have the same vision for how and where you want to retire? Or is one of dreaming about retiring abroad while the other wants to hang out with the grandkids? Whether you opt to stay in your hometown or move somewhere else, where you end up spending your golden years can have a huge impact on how much money you’ll need to thrive.

Opening the lines of communication can help you bridge any gaps. While this might require a little compromise on both ends, the goal is to create a fulfilling retirement that feels good for both of you. You can then create a financial plan that’s built around those joint goals.

3. How much will it cost?

Now for the nuts and bolts. As a couple, your retirement savings target will depend on your vision and timeline for this next chapter. To get started, estimate what your annual expenses will be when you’re no longer working, then multiply that amount by the number of years you plan on being retired. This won’t be an exact calculation—the goal is to get a ballpark idea of what your retirement will cost. After estimating your spending, you should project how much more you’ll need to save so that your assets will support the spending you want.

You should also be aware of key milestones on the road to retirement that can not only help you better prepare for the future but can also offer opportunities to maximize your savings. It’s also important to think about risks to your retirement income. That includes taxes, inflation, market volatility and health care costs, which can often the biggest expense for most retirees, especially if one of you needs long-term care.

These risks are common blind spots that your Northwestern Mutual financial advisor can help you plan for. They should be able to run different scenarios and guide you in choosing the right asset allocation for your retirement portfolio based on your age, risk tolerance and financial goals. Your advisor can also show you how additional financial tools like life insurance and annuities can work together with your investments can help you. In fact, independent research has shown that strategies that combine these three financial tools tend to outperform strategies that focus on investments alone. ﷟Tax and estate planning are equally important.

4. Are we emotionally prepared for the transition?

Retiring will affect more than your finances. It also marks the beginning of a new chapter in your life. Like any transition, it can come with ups and downs. When you've been used to getting up every morning, getting dressed and going to work and then, all of a sudden, you don’t have to do that anymore, that can affect your sense of purpose and identity.

So take some time to figure out who you are apart from your career and working life. You may feel drawn to:

• Volunteering
• Taking up new hobbies
• Spending time with friends and family
• Traveling

You and your partner can also talk about things you’d like to do together in retirement. That might involve trying new hobbies together, going on date nights or taking trips. You’ll likely be seeing more of each other, which can take some getting used to.

5. What’s our legacy plan?

While you still have a lot of life to live, part of how to plan for retirement as a couple should involve talking openly about what kind of legacy you want to leave behind. You may want to support charities or organizations that are meaningful to you, or gift assets to your children and grandchildren—either during your retirement or after you’re gone.

All of these decisions will affect how much you can spend in retirement, and you have to be on the same page as your spouse. One of you might want to fund your grandchildren’s 529 plans, while the other really wants to travel.

But it doesn’t have to be an either/or situation. With the right planning, you can leave a legacy without sacrificing your retirement goals. What matters most is using your money in a way that makes you feel good and is aligned with your values. Just be sure to communicate your plans with your children so they know what to expect financially.

Having open and honest money conversations with your spouse is always important, especially when it has to do with the future. It can set the stage for a smooth transition into retirement and beyond.

CFP disclosure: Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER® and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.