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Posted by Esther N. Phahla, CPA, A Professional Corporation

Retirement Planning Challenges In Age-gap Relationship

Retirement Planning Challenges In Age-gap Relationship

Couples who earn dual income with the age gap typically face greater challenges. These couples with the age gap got some specific requirements to consider while planning for the retirement.

There are several couples who actually face a specific task to plan for 2 retirement dates which might be several years apart. Instead of planning for twenty-five or thirty years in the retirement, these couples with the age gaps must plan for forty or even more years.

This could be scary but this kind of advance planning could assist such couples in stretching the retirement income in order to accommodate extra years. 

Couples face retirement planning challenges in age-gap relationships. Following are some of the retirement planning suggestions for couples having age gap:

  • Select the Retirement Ages

Such couples should carefully think in case they must stagger the retirements or retire together. Retiring together typically permits much time to spend together, and could avoid different ill feelings as well as jealousies. On the other hand, by retiring soon, the young spouse would miss out the future earnings.

  • Boost the Retirement Income

These couples with large age-gap might think to work for even more years hence they are not dipping into the retirement savings a bit early. In case the young spouse is still working then he (or she) might have to remain employed for the few years of his or her partner’s retirement – especially in case that both spouses company gives the benefits of medical aid. 

  • Consider the Retirement Investments

The couples must also think how the retirement savings can be invested. Before the lower rates of interest of last ten years, general agreement was to allocate the retirement funds again in order to the low-volatility portfolio (that comprises a large percentage of the bonds) when you get old. Now, these in the 50s as well as 60s need to remain invested in the large proportion of their equities for attaining high returns. Those couples who have a large age gap should not take more risk in the portfolio, for the long time period, to permit for much growth for covering extended income requirements of the young spouse.

  • Ensure Sufficient Health Care Cover

The medical costs of post-retirement are a large element while planning for the retirement years. You need to make it sure that you’ve already made a provision for it in case you would no more be just covered by the medical scheme of a company. You would have to pay the medical premium from retirement savings.

  • An Up-Dated Life Insurance and Will

Every couple has to ensure that they already have some estate plan which includes the up-dated Will. Where this’s a 2nd marriage, you need to make it sure that your new spouse is also included in the documents of estate planning and also you’ve made a provision for the commitments in case of a divorce.

  • Begin Planning Sooner than Later

In case you are quite away from your retirement then it would be good that you can prepare yourself for what is ahead.

If you are a couple along with the large age-gap then there is one way for anyone in order to know about how much money that couple would need in their retirement is just to prepare some analysis that how much you’ve actually saved. It is basically your life expectancy, spending rate, and investment returns. There are some other factors that might also influence just like whether your spouse or you would need living help or just become incapacitated with growing old.

  • Consider the Retirement Purpose

The couples who face age gap actually face several challenges.

This is important that the couple has such significant conversation. How couples envisage the retirement, how this would be actually funded and its effect on them. If you do not talk about these problems before your retirement then it might be calamitous for their relationship as well as marriage.

Couples need to talk to a professional tax preparer for evaluating their savings, spending needs, projected retirement income, and some other targets for the future. In case both of you need to retire at the same time, despite the age gap, you need to make it sure that your planning gives enough income for supporting what might be a long retirement for your young spouse.

Esther N. Phahla, CPA, A Professional Corporation
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