The decision to retire is one to think about very carefully before moving forward. And if you're married, it's an important one to discuss thoroughly with your spouse.
Data from Ameriprise Financial finds that 26% of pre-retirees intend to retire together. However, 39% are expecting to retire more than a year apart.
And that begs the question: Is it better for you and your partner to retire at the same time? Or should you stagger your respective workforce exits?
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The upside of retiring together
One major benefit of retiring at the same time as your spouse is that you'll be navigating a potentially tough transition together. It can be difficult mentally and emotionally to go from full-time work to retirement, as the loss of a job, even when voluntary, can result in a loss of identity.
Having your partner in the same exact boat could be preferable to having only one of you experience those feelings. That way, you can support one another fully since you'll really know where the other is coming from.
Also, you may be more motivated to cut spending as needed if you and your spouse retire together and see your joint income decline substantially as a result. If only one of you retires, you might attempt to uphold the same lifestyle you always did, which could result in you tapping your savings sooner than you ideally should.
The advantages of staggering your retirement
On the other hand, there's something to be said for not losing all of your household's job-related income at once. When you stagger your retirements, you minimize the initial financial hit.
Furthermore, you may be eligible for company health benefits if one of you remains employed, easing the cost of health coverage initially. This is particularly important if you're retiring prior to age 65, because that's when Medicare eligibility begins.
Let's say you and your spouse are looking to retire at age 62, which is the earliest age to collect Social Security. At that point, you may be looking at having to pay to secure health coverage for three full years before Medicare kicks in. On the other hand, if one of you retires at 62 and the other works a couple more years, you'll potentially have health coverage that much longer.
And speaking of Social Security, staggering your retirement could make it possible to get more benefits. It's not a given that you and your partner will claim Social Security the moment you retire. But if that is your plan, then having one of you work longer could mean getting to grow that person's benefit or avoid a reduction.
What's the right call?
It can be hard to know whether retiring together with your spouse versus separately is the best move. So sit down and talk through what your lives might be like if you retire simultaneously versus take a staggered approach, and discuss pros and cons including the ones mentioned above. With any luck, you'll arrive at a decision that works well for both of you.
