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.
Though retirement should, in theory, be a milestone to look forward to, many Americans are overwhelmingly worried about their golden years. In a 2016 Transamerica survey, half of baby boomers said they’re concerned that their savings won’t cover their retirement costs. Meanwhile, a recent survey by the Employee Benefit Research Institute found that 30% of current workers overall feel stressed about retirement.
Given the unknowns of retirement, it’s natural to be apprehensive about leaving that steady paycheck behind. But if you want to retire with more confidence, here’s what you need to do.
1. Know your costs
One reason so many workers worry about retirement is that it can be tricky to predict how much money you’ll need in the future. But if you prepare for a number of key expenses — those that are likely to eat up the largest chunks of your budget — you’ll be in a better position to cover your remaining costs as they fluctuate.
One such major expense is healthcare, and the numbers, unfortunately, aren’t pretty. According to recent projections, the average healthy 65-year-old couple today will spend $400,000, if not slightly more, on healthcare costs throughout retirement. And that’s just an average, so if your health is poor, you might spend more. But daunting as that number may be, it at least gives you a figure to work with. So if you’re a couple who’s anticipating a 25-year retirement, you can plan on spending roughly $16,000 on annual medical costs. If you have a known health issue, you’ll want to adjust that number upward. Either way, the key is get a handle on what could be your greatest expense down the line.
Then there’s housing to think about. While you can’t predict exactly how much it’ll cost to maintain your home over time, you should know that most homeowners spend anywhere from 1% to 4% of their properties’ value on annual upkeep. If you have an older home, which tends to be the case for retirees, and it’s worth $300,000, you can plan on needing $12,000 a year to keep it standing to be on the safe side. Factor in what you’re paying in property taxes, homeowner’s insurance, and a mortgage (assuming you’re carrying one into retirement), and from there, you can nail down your long-term housing costs.
While healthcare and housing are only two of the expenses you’ll face as a senior, because they tend to be the most sizable, knowing what to expect can help you map out the rest of your budget accordingly. That way, you’ll get a sense of how much savings…