Should spouses retire at the same time?. How do you manage retirement when one spouse is still working? But here are several points to consider: • Retiring at the same time tends to work better. Most couples, by definition, navigate big changes in their lives together: relocating, starting a family, choosing (and changing) career paths. Retirement, of course, is a very big change. When one spouse continues to work while the other retires, the working spouse may expect the latter to take on more responsibility for cleaning, running errands and cooking. A husband expects the wife to leave work because he is doing so, or a family member (usually an aging parent) requires care. Of course, many spouses can’t, or don’t want to, retire at the same time. Ideally, a situation where one spouse continues to work will yield some benefits: a steady paycheck; medical care (if health insurance remains in effect); increased Social Security payments (at some point in the future); and lessons from the retired spouse about how to navigate the transition from work to life after the office. Projects include backcountry trail construction, archaeological surveys, invasive-species eradication and habitat restoration.
If you’re like many people, saving for retirement is a high priority for you. You may be participating in your employer’s retirement plan or contributing to an IRA (or both). But how much do you need to save in order to retire comfortably? The answer to this question will depend upon several factors and will be different for each person.
Estimate your expenses
The first step in determining how much money you will need to retire is to create a cash-flow projection of your income and expenses after you stop working. Get an estimate of your Social Security benefits from the Social Security website or use their calculator to estimate how much you will receive. Then add in any pension income that you may be getting to determine your annual gross income at retirement. Then project what your monthly expenses will be when you retire. Most financial professionals tell their clients that their monthly expenses during retirement will likely be about 80% of their current expenses. Of course, if your house will be paid off by the time you retire, then your expenses may decrease more than that. But think realistically about how much you will spend during retirement and include the costs of any hobbies or other activities that you will pursue.
Next, compare those expenses to your total projected income to determine where you stand. In most cases, your Social Security benefits alone will not cover your expenses. If you’re lucky, a pension might make up the difference, but you will most likely need to rely heavily on your own retirement savings.
Estimate your savings
The next step is to determine how much you’ll need in savings to generate the income you expect to need in retirement. You will need to use a financial calculator in order to do this. Several excellent calculators are available online; a quick Google search should get you a list of them to choose from. Enter the amount of savings you have now for your starting balance and then estimate a rate of growth for your savings. Be realistic with this; a 12% rate of growth is probably a bit optimistic. Also enter in all…