5 Tips That Will Help Couples Make a Perfect Retirement Plan

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retirement plan

Are you dreaming of the perfect retirement?

Then it’s going to take a solid plan.

If you’re part of a relationship, this means going after this goal together. The following five tips will help with this.

Be Open and Honest with One Another

Ideally, you should be honest with your loved one about your financial situation long before you ever get engaged. That will make life so much easier.

If you haven’t done that yet, it’s never too soon. Stop reading and go do that right now if you haven’t already.

Still, even if you did go through that process, that doesn’t necessarily mean you both understand what you want from retirement.

Too many people take retirement for granted insofar as they assume everyone wants the same thing. They all want to retire at 65. They all want an easy life. They all want to take up a hobby or two.

This isn’t always the case, though.

Even if you’re positive you know your spouse, it’s important that you’re honest about your retirement goals.

Unfortunately, a lot of people aren’t and that results is missing major milestones on the way to retirement. This can mean they don’t retire on time or retire the way they wanted to. What’s worse, they might meet their retirement deadline only to find out they’re not really happy.

Here’s a chilling look at what happens when spouses aren’t on the same page about retirement from the Telegraph:

“The findings emerged in a study of 660 retired people still in relationships, which also showed many find their old spark has gone after giving up work.

“Instead of celebrating their new found freedom together, eight in 10 discover they don’t share any of the same hobbies and interests while one in five bickers about a lack of money.

“Four in 10 pensioners polled also admitted they needed to learn how to live with each other again now that the children have left home and they are no longer committed to work.

“The study also indicated one-third of retirees spend much of their time arguing about silly things with the other half, and 13 percent admit they “irritate each other beyond belief.”

“And a further 29 per cent were surprised to find they didn’t have the same expectations for their ‘golden years.’”

As soon as you can, sit down with your husband or wife and be completely honest about what your goals are for retirement. Accept the fact that you might disagree and may need to modify yours. That will be a lot better than pursuing a retirement plan you think you’re both in favor of only to find out the hard way that your loved one isn’t happy.

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Trying to Come Up with a Retirement Plan on Your Own

This is one of the easiest retirement plan mistakes to avoid, yet it happens all the time.

When it comes to most major decisions, you and your spouse probably seek professional help. If it came to your health, you’d talk to a professional. If you needed major landscaping done, it is the same thing. You probably even seek the advice of a professional before taking a major trip; you want to make sure your plans will lead to a good time.

Yet, when it comes to retirement, far too many couples think that’s something they’ll be able to figure out all by themselves.

Now, if you’re a financial professional, fine. Maybe you have experience and know how to come up with a retirement plan from scratch. If that’s the case, do it. Go right ahead.

However, if you don’t have years of experience, why would you take on such an important obligation? The decisions you make regarding your retirement plan will absolutely affect you for the rest of your life.

The good news is that you don’t necessarily need to go the old-fashioned route and pay a lot of money to meet a professional in person.

Donna Rosato at Money advises:

“Taking advantage of that advice can pay off. In a recent Voya Financial survey of full-time workers, people who saved the most for retirement used online financial advice tools and educational materials provided by their employers at more than double the rate of the lowest-scoring savers.”

Nonetheless, the important thing is that you don’t take your retirement plan into your own hands.

This goes back to our first point about honesty, too. In many couples, there is an individual who is in charge of the money. On a day-to-day basis, this may make perfect sense. You don’t need a professional to tell you it’s time to pay the electric bill or that you need to put a certain amount in the 401(k).

Unfortunately, this often leads to that person thinking they can also figure out their retirement plan. Maybe this is you, or maybe you’re the one who is worried about your spouse taking the reins of something so important.

As a result, in an attempt to protect their ego, you don’t say anything as they bump around in the dark trying to come up with a coherent retirement plan.

Again, being honest with one another also means being honest about the challenges that stand between you and an ideal retirement. If you can do that, it should become obvious that a professional touch is needed – even if it happens over the computer.

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Make Your Retirement Plan a Group Effort

The last point provides a nice segue to this one because your retirement plan can’t be something only one of you goes at alone.

Let’s say you nailed the last two steps. You sat down with each other and were honest about what you both wanted from retirement.

Then, you both sought the guidance of a seasoned professional on putting your retirement plan together.

So far, so good.

How could anything go wrong?

Well, let’s say that now you fall back into your old habits and only one of you is dedicated to seeing that retirement plan through.

The other person might be in the loop, but they might also get distracted and go make purchases that don’t align with that all-important retirement plan. Even if it’s just small things – a latte here, a round of golf there – the entire thing can fall apart.

Again, it’s okay to divvy up responsibilities in a marriage. Many would argue it’s necessary for the sake of efficiency.

Your retirement plan should not be one of these areas, though. Both members of marriage must be equally dedicated to seeing it through.

One easy way to do this is by having weekly or bi-weekly meetings to make sure both sides are on the same page. Thanks to modern day technology, it should be easy to sit down and go over the bank and credit card statements to ensure things are on the right track.

At first, this may cause some friction. After all, you could find out that one or both of you was veering off the decided path. Over time, though, you’ll be much better off by making retirement a group effort.

Getting Specific About Spending Habits

As we just mentioned, it can be very easy to stray from your retirement plan when it comes to the day-to-day efforts required. The easiest way to combat this is by drilling down to spending habits.

Just like with so many other things, it’s your habits that determine your results. In other words, it’s the things you do every day that will decide whether or not your retirement plan is successful.

It’s still important to hold regular reviews, but you don’t want to merely be reactive about this. Being proactive will yield much better results.

Building off of earlier steps, when you and your spouse talk about your retirement plan, talk about what it will take every single day to reach it. What will you spend your money on? What will you forego? What kinds of indulgences will you allow yourselves?

These don’t have to be set in stone, either. It’s perfectly all right to revisit them whenever you feel like it. If you think it’s time to change things up, then – again – just be honest! It’s better than letting your thoughts boil over.

The other great thing about focusing on habits is that most people find out how flexible they are. At first, saving on groceries might seem like a chore, but after a while, it could become alarmingly clear that it’s actually easy and even something you could do more of – meaning more money toward your retirement plan.

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Putting Your Retirement Plan Above Everything Else

If you and your spouse are to have a happy marriage, you’re going to have to spend a lot of time doing enjoyable things. This doesn’t have to mean a vacation to the Bahamas. It might just mean spending the night together watching TV or going out to a movie.

Whatever the case, despite all we’ve said here, don’t become so obsessed with your retirement plan that you forget to live. If you do that, your marriage probably won’t make it to retirement in the first place. You might even find that you don’t really feel like spending retirement with the person you married.

If you did the other four steps well, then you don’t need to feel bad about spending some money on having fun. That’s because you’ll be taking the necessary measures to ensure this kind of fun is affordable.

This is where, once again, hiring a financial professional to help you will come in handy. By putting together a budget that fits your goal for retirement, they’ll be able to allow for a certain amount of money to do whatever you want.

The key is to strike a balance. “All things in moderation” as they say. If you become too strict about following an impossible financial plan, it’s only a matter of time before one or both of you breaks. That’s only human nature.

It’s like an unrealistic diet. Your dedication and ambition are admirable, but they may also be your worst enemies. Instead of trying to lose 100 pounds in a month, give yourself some leeway and aim to do it in 2 years. Every now and then, it’s okay to splurge and have a piece of cake or even a whole pizza.

Likewise, it’s just fine if you want to go on vacation or buy that new TV you don’t absolutely need. If you work hard for your money, it’s only right that you spend it. As long as you’re not doing it compulsively, behind the back of your spouse or in a way that hurts your retirement plan, who cares?

Bonus Tip: Keeping Up with the Joneses

Finally, one last thing worth mentioning is that no two couples are the same. Don’t assume that a path toward retirement that fits your friends is the one that will work best for you. That’s a recipe for disaster.

When couples try to match each other in material matters, we call that “keeping up with the Joneses.” Nothing good ever comes from it. People overspend on stuff they don’t need just to maintain appearances.

This can quickly destroy a plan for retirement that was otherwise masterfully crafted by a professional. In an effort to stay in pace with your friends, you make a comfortable retirement a near impossibility.

Understand that you have no idea what other people’s financial situations are. They might appear like they’re doing really well on the outside when, in truth, they’re actually drowning in debt or otherwise miserable.

Your plan is your plan. Your goal is your goal. Your financial resources are what they are. Play your game and ignore what your friends and neighbors are doing in terms of theirs. It’s none of your business anyway.

The best laid financial retirement plans are no good if you and your spouse can’t come together and work toward them as a team. It starts by being honest with one another, but, so long as you follow the other four steps after that, a happy, comfortable retirement is an easy goal to hit.

 

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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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