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Home > Blog > Pensions > Retirement Planning For Couples And Strategies For A Happy Retirement
The essence of retirement planning is to determine realistic income goals and implement strategies that enable you to achieve those ambitions. It is never too late to begin retirement planning, although starting sooner will likely make your journey smoother. After all, it is much easier to reach a destination if you have a clear road map of how to get there.
The same applies to financial planning for couples – the sooner you discuss your retirement goals with your spouse or partner, the easier it will be to work towards your individual and shared goals together. In fact, studies have shown that couples that develop retirement income strategies in tandem tend to be better off in retirement than those that rely on one partner to make important financial decisions.
When it comes to effective retirement planning for couples, it pays to talk to each other – and a financial adviser. In doing so, you can increase your chances of enjoying your retirement that little bit more, safe in the knowledge that you can support each other financially (even in the unfortunate event that one of you dies or you separate).
Keep reading this couples retirement planning guide for couples retirement strategies and happy retirement tips from our expert advisers here at Hilltop Financial Planning.
There is no denying that retirement planning is significantly different for couples than it is for individuals.
On the plus side, there is the obvious benefit of the combined saving power couples command. On the downside, comes greater complexity. Both in the sense of navigating often disparate pensions, investments and other assets of not one but two people and in terms of retirement goals; whether individual or shared, spoken or unspoken.
All of which makes retirement planning for couples a more nuanced, intricate and involved process. Just as with any relationship in general, financial planning for couples requires open, frequent, two-way dialogue to succeed.
Planning for retirement together enables couples to reap several benefits. First and foremost, planning in partnership allows you to gain a clearer picture of your potential combined retirement income and develop strategies to optimise it. The sooner you start this process, the more time you will have to make any necessary adjustments to ensure you remain on track for the type of retirement lifestyle you envisage.
Another key benefit of retirement planning for couples is that it enables you to put plans in place to protect each other should one of you die or become ill, or you part ways. Many couples still experience a gender disparity in pension savings, with women disproportionately likely to be more disadvantaged. As such, having fully formed retirement income strategies and succession plans in place can be hugely reassuring for all parties.
One useful but little-known strategy is to pay money directly into your spouse or civil partner’s personal pension.
If your significant other has a stakeholder or self-invested personal pension (SIPP), you can top up their annual pension savings up to the current £60,000 personal allowance or £3,600 if they have no earnings. Plus, the pension holder can claim tax relief at their tax rate. This is a handy option if one of you is not working or has reached your annual allowance limit.
However, there are tax implications to consider with this approach. Therefore, it is important to discuss your options with a financial adviser to ensure you use your allowances and tax relief correctly.
Couples should consider several factors when coordinating their retirement timelines. These include the age gap between you, your respective health and well-being, job security and other financial commitments. It is important to step away from work at the right time, which may not necessarily be at the same time. Tempting as it might be to retire at the same time, it can be beneficial to stagger your retirements to improve your financial outlook.
If either of you were to delay your retirement date, the working party will accrue more pension benefits and require fewer years of pension income in the long run. Plus, if the working partner’s income can support you both, that enables the retired person to delay taking their pension as well. As such, you can quickly see how beneficial it can be to forego that romantic ideal of retiring together to maximise your potential retirement income.
Couples should discuss their retirement goals and aspirations with each other as early as possible to ensure they are on the same page. It is important to identify any potential conflicts of interest and develop strategies to overcome these. Couples should also take time to assess their individual retirement goals regularly to ensure they are still in line with each other.
The bottom line is that it is good to talk; and never more so than when it comes to retirement planning for couples.
As you can see, there is a great deal of value in partaking in retirement planning for couples. Couples who plan together have a far better chance of achieving their individual and shared goals for retirement. However, far too many couples never speak about finances, let alone their retirement aspirations. This head-in-the-sand approach can leave you with a shortfall in finances and a nasty shock if your savings do not match your lifestyle goals.
Therefore, we highly recommend seeking out financial planning for couples at Hilltop Financial Planning. Our financial advisers have many years of experience in providing retirement income strategies that help to facilitate shared and individual retirement goals for couples. Check out our retirement planning page and contact us at 0161 413 7051 to arrange retirement planning for couples with one of our advisers.
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