If you're single, your retirement goals are your own – you don’t really have to consult with anybody, and you can change your plans whenever you like. However, if you are married or in a committed relationship and approaching retirement, planning is a joint effort. You and your partner should develop a joint “vision” encompassing all the key areas of your retirement lifestyle. Setting expectations and planning for changes ahead of time can help you create your ideal retirement.Here are five questions that can help you and your partner create a retirement lifestyle that you can both enjoy:
It's a complicated question and there is no easy answer. It really depends on what type of lifestyle you hope to enjoy after you retire. Do you plan to work part time, volunteer, travel, spend more time with the grandkids or simply take it easy? Just as money matters are an essential discussion topic during your working years, how much money you'll need for your future is equally important to discuss. No matter what your plans are it's a good idea to discuss your retirement plans with your partner.
Have the retirement discussion early to determine if you are both going to retire at the same time. Single people have to think only about themselves when making plans. Couples, however, have to make this decision together. Are you both ready for retirement? You may each approach the transition differently. Some people have no difficulty with transitions, but for people that do, they may have more trouble with handling the unknowns or new beginnings. Determine how you will spend your time together and apart, as well as changing expectation about roles and responsibilities at home.
Once you retire, you may need to consider two key aspects of your living situation: the size and location of your home. Regarding size, you may look around one day and realize you have more living space than you actually need. This is especially true, of course, if you have children who have set out on their own. If you have a large single-family house, you may want to consider whether you should move into a condominium or even an apartment, either of which might be more cost-effective for you.
As for location, you may decide that retirement is the perfect time to move, either to seek a more favorable climate or to be near grown children and grandchildren. In any case, moving to a different area is a major financial decision, so you and your spouse will certainly want to discuss all the aspects of relocation.
Are you ready to retire? Retirement no longer means the cessation of all work. You or your spouse – or perhaps you and your spouse – may want to use your skills and experience to do some consulting or even open your own business. Adding a source of earned income will almost certainly help your financial picture during retirement, but if either you or your spouse is planning to do some work, you will want to be sure this activity doesn’t disrupt other plans that may be important to you, such as traveling. Also, any source of earned income during your retirement years may well affect important financial decisions, such as when to take your CPP benefits and how much to withdraw each year from your retirement accounts such as RRSPs. Again, it’s essential that you and your spouse be on the same page about any type of employment during retirement.
Aside from possibly doing some type of work during your retirement years, how else might you spend your time? Would you like to travel extensively? Or would you rather stick close to home and pursue your hobbies or volunteer? These don’t have to be either-or decisions – hopefully, you’ll be able to explore many pursuits during your retirement. Keep in mind, though, that there will be different costs for these various activities. You and your spouse may need to prioritize your choices to ensure they fit in to your overall financial strategies.
As you can see, you and your spouse will have some key decisions about the financial aspects of your retirement. However, with some careful planning, you can make the moves that can help you work toward your common retirement vision.
At Edward Jones, we can help you achieve your financial goals. Contact your local Edward Jones advisor about a financial strategy that makes sense for you.