5 Biggest Mistakes You and Your Spouse Make Preparing for Retirement

 In Retirement

preparing for retirement

Preparing for retirement needs to be an ongoing task that every couple undertakes throughout their marriage.

When a couple doesn’t communicate with each other about finances, it’s usually only a matter of time before one of them receives a very rude shock. Unfortunately, this can sometimes happen when it’s far too late to do anything.

That being said, preparing for retirement isn’t necessarily done better when done together. Though they have the best intentions, couples can often make matters much worse.

This is why you must be cognizant of the following common mistakes before you and your significant other make plans for your golden years.
retirement accounts 401K IRA

Planning on Retiring Too Early

Most people simply assume that they’ll retire at 65. This has long been understood as the correct age to call it quits and begin relaxing.

As such, those couples preparing for retirement aim for this age, no matter when they start saving, how much they’re making, what their goals are, etc. This arbitrary number has become the North Star every couple blindly follows.

A few years back, the iconic actress Suzanne Somers was interview by the Wall Street Journal about preparing for retirement. She responded, “First, don’t retire.”

While that may not be the advice everyone wants to hear, it rings true in light of what we just talked about. 65 is not going to be the age of retirement for everyone, and some may actually not want to end up retiring.

She continued: “I was speaking with my age management doctor recently who said most of his executive patients die within five years of retirement. The lack of stimulation is deadly.”

Somers isn’t the first person to suggest the fatal flaw of retiring too early either. Check out the following articles on the very same topic:

These are just a few of many articles that suggest you and your spouse might want to put off retirement for reasons other than financial ones. In fact, that last piece carries the subheader: Researchers find those who work past 65 live longer.

When you begin preparing for retirement, speak with your spouse about what your goals are – individually and as a couple. Don’t simply aim for 65 because everyone else is.

Couples Misjudge How Much They Need to Retire

Most people don’t understand how much money they need to retire. Unfortunately, this doesn’t seem to be a situation where two heads are better than one.

In my experience, couples who prepare for retirement together are just as clueless about how much they must save in order to live comfortably.

Another version of this problem is that couples often overestimate how much they’ve saved. They think their 401(k) is some kind of guarantee of returns when, in reality, it took quite the beating during the financial crisis.

Whether you decide to retire at 65 or choose another age, just make sure you have done the math – over and over again – to ensure you know how much you actually need to save and what you’ll need to do to hit that goal.

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They Don’t Actually Prepare at All

It may sound crazy, but preparing for retirement is something many people simply don’t do. Much like in the last section, many couples only assume they’re on track because everyone works at 65 and then throws in the towel. Why should it be any different for them?

We talked about 401(k)s a moment ago. IRAs are fantastic investment tools too, but they’re also susceptible to the same kind of apathy by couples.

They don’t understand that you need to be thoughtful about how you manage your IRA so, at the very least, they end up with lackluster returns.

Preparing for retirement is not something to take lightly. It must be something you make a priority and then you absolutely must check in on your progress toward that goal several times a year.

They Try to Do It on Their Own

Another way couples underestimate the importance of preparing for retirement is by trying to do it on their own. Again, it’s just far too important to leave it to chance like this.

Unless you or your spouse are a retirement planner by trade, this is something you should get professional help with.Otherwise, you leave yourself vulnerable to any number of problems that go unnoticed until it’s too late.

Something like asset dedication is proven to work, yet most couples preparing for retirement have no idea about what it is or how it can help them.

Without a professional to walk them through this important investment tool, they will continue being misinformed and hurting themselves in the process.

They Have No Plan for Their Actual Retirement

One thing we definitely stressed at the beginning of this piece was that preparing for retirement means lots and lots of planning. Don’t think that means only planning for funding that retirement, though. This would be a big mistake.

Instead, you must come up with a plan for what you’re going to do after retirement as well. Otherwise, no matter how much money you have saved up, what is supposed to be an amazing time in your life will quickly have you wishing to have your 9-to-5 days back.

Retirees need routines. That’s not to say you have to inflict a rigorous work schedule on yourself, but some plan for how you’ll spend your days is absolutely better than none.

This is especially important for couples to do because, once you retire, you’re about to spend a lot more time together than you most likely ever have.

If you know any couples who have already made the leap, you might be well aware of the fact that retirement puts a strain on relationships. You can avoid this by planning for retirement with an eye for how you’ll spend your time, together and as individuals.

These five big mistakes we just covered shouldn’t scare you off retirement. It’s still very possible to retire when you want, do what you want and live happily ever after. You just have to keep these pitfalls in mind so you can avoid them at all costs.
retirement accounts 401K IRA

Sergey Sanko
Sergey had started an IncomeClub after years of being an investment advisor for high affluent investors and managing fixed income securities. He is the lead investment advisor representative and holds a Series 65 license. Sergey earned his Executive MBA degree from Antwerp Management School.
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