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Retirement Planning for Couples

As a couple, a key part of being together is sharing every aspect of your life, including talking about your future plans. So we've created this handy guide all about retirement planning for couples

Speak to a retirement planning specialist

With most people spending at least two decades in retirement, how you will fund your lives once you are no longer working needs to be discussed and planned together.

Holborn Assets is an award-winning global financial advisory firm. We help individuals and couples plan for their retirement so that their ideal life visions can best be realised.

Here are some of the things to consider for retirement planning as a couple. Plus the types of scenarios which may impact your individual or joint retirement strategies.

Couples Retirement Planning: Why it makes sense to plan together

It’s a simple fact that couples who make big financial decisions together will have a much better retirement than those who don’t plan. It’s important to plan alongside your partner, taking into consideration any children, healthcare and general wishes for your retirement.

In contrast, leaving major financial decisions to one partner often means the other partner is left in the dark. A lack of collaboration also runs the real risk that when couples get close to retirement, their finances will fall short with little time to plug the gap.

Partners may also be at a disadvantage if the relationship breaks down or if their spouse dies unexpectedly.

As the saying goes, ‘two heads are better than one’. So let’s use this ethos to create a stronger retirement plan that both of you are on board with. Plus one which supports both of your financial needs for retirement.

Did you know?💡: Research from LV found that 78% of couples have no idea what their spouse’s pensions are worth. Furthermore, 85% of the people asked weren’t aware of the benefits of planning retirement together.

Retirement Planning Checklist for Couples

When you meet with one of our retirement experts, we’ll run you through some of the aspects which will affect your retirement fund.

For instance:

  • Level of income required
  • Level of the desired lifestyle
  • Managing healthcare costs as you age
  • How will your retirement be funded?
  • When will each of you retire?

Beyond covering the basics, you might also want to take the opportunity to put your finances under the microscope. For instance, naming your beneficiaries and taking out life insurance. Plus, look at whether you are financially liquid and flexible.

At the very least, your retirement plan as a couple should allow you both to create a shared vision of the rest of your lives together.

A retirement plan will give you the chance to review your investment choices and decide how much each person will contribute. Plus you can plan for what happens if someone leaves work or retires at different times.

How much cash should a retired couple have?

Hargreaves Lansdown states that a ‘comfortable’ retirement income is £37,300 for one person and £54,500 for couples in the UK.

In reality, the amount that a retired couple should have in their retirement fund should be enough to cover all of their expenses. Plus, to be able to maintain the level of lifestyle they are currently accustomed to.

For high-net-worth couples, the yearly figure you will require for retirement could be about the same or higher than the ‘comfortable’ estimate.

It’s our place as retirement experts to help you work this out. Plus to put you on a plan to get you there.

Learn more: How Much Money Do You Need to Retire?

Does retirement affect marriage?

Retirement is a huge life adjustment, especially if you have worked all of your life. Or, if you are used to your partner working all of the time.

Spending lots of time together as a couple without the separation of work can disrupt a couple’s established relationship.

Many people associate their sense of identity and purpose with working, making it a difficult transition once they retire. On the other hand, others find relief in having to no longer work, especially those with stressful careers in the medical industry as just one common example.

Whether you’re looking forward to retiring as a couple, or if you have any concerns – the goal of retirement planning is to limit any negative outcomes. These often arise due to a lack of thorough discussion or planning for your future.

Why shouldn’t couples retire together?

The classic vision of a couple retiring is that both of you leave work forever on the same day. However, the reality is almost always vastly different.

Namely, can you both afford to retire at the same time? Also, is it something you both want?

Unless the answer to both of these questions is ‘yes’, your joint retirement plan will need to account for one person leaving the workforce before the other. This is in terms of the financial, practical and emotional impact.

Furthermore, there can be many financial benefits if one of you continues working for longer. Therefore, in the majority of cases, it doesn’t make financial sense to retire at the same time.

Though, as timeframes will be clarified within your retirement plan, as a couple, you can settle on what works for you both as individuals.

Navigating different circumstances as a couple

Traditionally, retirement planning for couples has always been geared towards married couples with children. While this is also still very much the case, it’s also true that not every couple who may need retirement planning will fit this demographic.

These are just some of the scenarios which as a couple, may affect your individual or joint finances when you retire.

Retirement Planning options for unmarried couples

Retirement planning is usually geared towards single professionals or married couples.

Though the latest statistics show that 3.4 million couples in the UK alone are cohabiting rather than married.

The UK Government also reports that the number of cohabiting couples has increased by 144% between 1996 and 2021.

As an unmarried couple, there will be limitations and benefits to your situation that will affect all aspects of your finances including your retirement. Ultimately, the goal is to secure your financial future together, but also create individual stability to achieve the best of both worlds.

Retirement Planning for childless couples

With the average cost of raising a child until the age of 18 coming in at £202,660, the number of childless couples is expected to rise.

Whatever your reasons for not having children, what you do need to consider is how a lack of dependents affects your retirement plan.

A financial term for childless couples is DINKS (Double Income No Kids). A major advantage of not having children is the ability to contribute more towards pension funds, savings and other investments.

However, many high-net-worth childless couples often have higher lifestyle costs (i.e. luxury purchases and travel). Therefore, their retirement fund needs to be able to maintain the lifestyle they are accustomed to once they are no longer working.

Plus, without any dependents, there could be potentially higher care costs to consider. So it’s important to cover all bases, even if being childless has positive financial connotations overall.

Retirement Planning for couples with age difference

In any division of assets following a separation or divorce, assets such as property are normally the main focus. However, the potential loss of your partner’s pension also requires careful consideration.

In some instances, one partner could be required to pay the other a portion of their pension when they retire. For the party who pays out, this would reduce their pension amount and could affect their financial stability during retirement.

While there may be no such thing as a ‘joint pension’, there may also be other investments which were originally purchased to fund both parties’ retirement.

As with any status which may apply to you as a couple or individual, getting financial advice is how to mitigate any future issues with your retirement. Complex cases such as separation or divorce are no exception.

Retirement Planning for couples – top tips & mistakes to avoid

  • Do have the conversation about what your retirement will actually look like – Arguably, knowing each other’s aims for retirement and how you’ll navigate the changes in your relationship is one of the most important parts of the process.

  • Don’t take unsolicited advice – Holborn Assets is a fully regulated and award-winning financial advisory firm. Ensure that whoever you approach for retirement planning or advice can offer you the same. This includes being regulated to give financial advice within your specific country.

  • Do review your retirement plan regularly – Global financial markets and products are subject to frequent changes, as are your personal circumstances. Not leaving your retirement plan to gather dust will ensure you’re both still on track financially. Likewise, if you ever decide to separate or divorce you will need to update your retirement plan without delay. Plus, any other estate or similar legal aspects may apply.

  • Don’t put off retirement planning even if you’re still young – Retirement may seem like it’s tomorrow’s problem, but it’s easy to get caught out by a lack of planning. You are far more likely to have a comfortable retirement, or even be able to retire early if you start today.

Retirement planning for couples

Couples Retirement Advice FAQs

Have any questions about retiring as a couple? We’ve answered some of the most common queries below.

For any further advice as high-net-worth couples planning for retirement, please contact us so that our retirement specialists can assist you further.

How much does a married couple need to retire?

The latest figures show that the minimum a married couple needs in retirement is £19,000 per year. This is a 19% YoY rise from the previous year, according to the Pensions and Lifetime Savings Association (PLSA) at Loughborough University.

However, these are the lowest possible figures. As a couple, particularly as high-net-worth individuals looking to maintain your current lifestyle once you retire, you will both require significantly more money than this per year.

When you work with our retirement experts at Holborn Assets, we can help you work out a figure tailored to your needs as a couple.

How much can a retired couple earn before paying tax?

At the time of writing, the individual personal allowance before you pay tax in the UK is £12,570. However, some couples may qualify for the Marriage Tax Allowance, which allows couples who are married or in a civil partnership to transfer up to £1,260 of their personal allowance to their spouse – this will vary depending on your jurisdiction at retirement.

How to avoid paying tax on my pension

It’s possible to reduce the amount of tax you pay on your pension by only taking the amount of money you need each tax year. Depending on your financial circumstances, our financial advisers may be able to suggest a number of other ways you can become more tax efficient.

A good retirement for any couple is one where the ambitions you discussed during retirement planning come to fruition. So for instance, the level of income you need, the ability to spend your retirement as you wish, healthcare provisions and at least some financial flexibility.

Various high-interest savings accounts and investment strategies exist to fund your retirement. The trick as a couple is to work together, so that both of you fully understand your retirement options along with how much you’ll need to achieve a comfortable retirement.

Not necessarily. Whether you’re married in a civil partnership or cohabiting partners, the answer to this question is the same across the board. That is, you need to consider whether you’re both financially and mentally prepared for retirement.

Unless you are at the same life stage and can afford it, simultaneous retirement may not make sense. However, if retiring at the same time is a priority, then it’s important to discuss this with your retirement planner to look at the available options.

Yes. Regardless of your relationship status, everyone needs a financial plan in place for when they retire. Furthermore, as an unmarried couple, you may require additional financial or estate planning to secure your individual finances without the legal protection that marriage can give.

Do consult our financial experts if this scenario applies to you and your partner so that we can point you in the right direction.

Holborn Assets – Start your retirement plan as a couple today

Retirement planning can be a complex matter at the best of times. But add in your needs as a couple, and things can be tricky to navigate.

Whether you’ve made existing plans for retirement, or are starting from scratch, our retirement experts are here to help you make informed decisions as a couple.

Holborn Assets specialises in retirement planning, with an excellent reputation for quality assurance. With a global presence in 18 locations, we offer retirement planning for expats in many jurisdictions.

For any help or advice with all things retirement planning send us a message and our team will be in touch.

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