In recent years, more attention has been given to the complexity of the process of retiring. Economics has of course influenced how people think and act upon the idea. Inflation and other economic realities are forcing couples to rethink the traditional route of retiring together.
We are fairly certain that you have seen or heard individuals who are supporting the idea of retiring together. From an emotional point of view, the idea is appealing – retiring together will definitely give couples more time to simply be together and enjoy more activities and celebrations with the family.
But what happens when the seemingly idyllic joint retirement begins chipping away at a couple’s financial stability? What happens then? Before retiring together, we would like you to consider the following points and then decide if it’s still a good decision.
Financial Benefits & Future Burdens
Retirement is not a one-sided affair. It’s not all happiness and Thanksgiving dinners with the family. Retirement can become a source of financial burden and if a couple retires together, even the expected yearly cash flow from Social Security will be reduced.
Let us explain: if one half of a couple decides to work five more years after the common retirement age of 60 years old, they can definitely expect a percentile increase in their combined retirement assets on a yearly basis.
Retiring together on the other hand, will logically cause a drop in retirement assets compared to a couple’s combined pre-retirement cash flow. The concepts of combined assets and calculation of asset depletion are both important when deciding to retire together.
Potential Emotional Problems
Having a full time career means being away from home most of the day. This temporary separation actually allows couples to create clear personal boundaries which in time become part of what makes a couple’s union work more efficiently.
When a couple retires together, two individuals who are used to be away most of the day suddenly realize that they will be staying at home together most of the time. Where there used to be ‘me time’, there will be one’s husband or wife.
This sudden change in a couple’s dynamic can cause emotional issues rooted in the fact that before retirement, both individuals have already created a system that works.
If you want to avoid this scenario and instead, ease into retirement, then delaying the retirement of one half of the couple is the answer. If only one half of a couple is retired then the other half will be able to examine the gradual changes brought about by retirement and he or she will be able to create a new system of living together.
Another emotional issue that comes with retirement is the loss of one’s identity. It is very common for people in general to deeply associate oneself to one’s chosen line of work. If you are having doubts about retirement, then don’t retire yet. If you can, continue working for a few more years and use the extra time to figure out how you can remain productive and satisfied with life after retirement.
Differences Between Expectations and Reality
We all have retirement dreams. Who doesn’t? Every person has a vision of how his/her retirement should look and feel. Many retirees, pre-retirement, envision enjoyment, relaxation and performing activities that they didn’t have the time for when they were still working full time.
However, there are always stumbling blocks to creating the perfect conditions for these retirement dreams to take place. What usually happens is that couples who retire at the same time suddenly find themselves at odds with each other.
With so much time on their hands, even the smallest things at home reconfigure significantly. Tiny details like who cooks breakfast or who brings out the garbage become inflated issues and gasoline for heated arguments. When husband and wife begin to argue about petty things, it is possible that one or more of the following are taking place:
- One or both parties are unhappy with the sudden change in daily activities.
- One or both parties are dissatisfied with the reality of retirement.
- One or both parties are expecting more of their retirement dreams to manifest more quickly.
The truth of the matter is that having all day to oneself can cause problems, especially if a person is used to working on deadlines and socializing with others in a workplace environment. One possible solution to this problem is not retiring together.
Again, not retiring together increases the probability of quickly finding and creating new ways of living together with one’s partner or spouse after retirement. The deep, personal issues brought about by retirement will not pop up in both parties and this can reduce the overall strain that retirement can place on a marriage.
The Necessity of Identity Reinvention
This particular issue is tied closely with the previous section. As we have mentioned earlier, retirement can affect (to a lesser or greater degree) a person’s self-identity.
Retirement can actually force a person to reinvent himself to fit into the mold that is required by retirement. When a couple retires at the same time, the necessity to reinvent oneself affects both people at once.
The necessity itself is a natural outcome of shifting to another phase in life; however, it doesn’t mean that it will not cause conflicts. When the retirement of a couple is ‘un-synced’, then it is possible for one party to reinvent himself/herself in solitude.
There will be more personal time to figure out what to do next.
However, this particular formula requires effective communication in order to work. Otherwise, the problem will persist. Because in addition to identity reinvention, couples would still have to deal with the day-to-day challenges that face us all.
Genuine communication will almost always improve a situation.
However, if only one part is interested in a fair compromise, then expect the current situation to remain unchanged. Genuine communication also has to take place regularly to reinforce new boundaries and agreements with one’s spouse or partner.
In any situation, finding the balance is the key. When it comes to retiring early, you have more options than you’d think. Try reading through our IRA Early Retirement Guide on how you can use IRS-approved exceptions to avoid the 10% penalty.