Many couples approach retirement on different timelines. One spouse may retire years before the other, or they may have different ages, health conditions, or career plans that shape their decisions. Developing retirement income strategies for couples with different retirement dates requires careful coordination and flexible planning.
By evaluating income sources, expenses, healthcare coverage, and tax considerations as a team, couples can build a retirement income plan that supports both partners’ goals—no matter when they decide to retire.
Understanding Why Timelines Often Differ
There are many reasons couples retire at different times. Sometimes it’s due to an age gap, differing pension eligibility dates, career satisfaction, or health needs. In other cases, one spouse may want to take a break from work earlier while the other chooses to continue working for a few more years.
Whatever the reason, staggered retirements can impact income needs, household budgeting, and long-term planning. It’s important to approach the transition as a shared journey, even if the timing looks different for each person.
Identifying Income Sources During Partial Retirement
When one spouse retires and the other continues to work, the household often operates with a blend of earned income and retirement income. This can include:
- Continued salary or wages from the working spouse
- Social Security benefits, if the retired spouse claims early
- Withdrawals from retirement accounts, if needed
- Investment income from taxable or non-qualified accounts
Retirement income strategies for couples must reflect this unique mix. The key is determining how much income is needed during the overlap period, and how to structure withdrawals or benefit elections accordingly. In many cases, delaying withdrawals from retirement accounts or Social Security may be advantageous if the working spouse’s income is sufficient.
Managing Taxes Across Different Retirement Stages
Having one spouse working while the other is retired can place the couple in a higher tax bracket than they may be in later years. This dynamic creates opportunities—and considerations—for tax planning. Some strategies may include:
- Adjusting retirement account withdrawals to manage taxable income
- Timing Roth conversions strategically while in a higher bracket
- Delaying Social Security to reduce overall taxable income
Coordinated tax planning can help smooth the transition and avoid unintended consequences, such as triggering higher Medicare premiums or additional taxes on Social Security benefits.
Addressing Healthcare Coverage Gaps
Healthcare is often a primary concern for couples on different retirement timelines. If the retiring spouse is not yet eligible for Medicare, they may need alternative coverage. Options might include:
- Remaining on the working spouse’s employer-provided health plan
- Exploring COBRA coverage through a former employer
- Purchasing individual insurance through the marketplace
It’s important to assess how premiums, deductibles, and out-of-pocket costs will affect the household budget. Couples should also consider how their needs may change when both spouses are eventually on Medicare or other retiree health plans.
Aligning Long-Term Spending Goals
Retirement for one partner doesn’t always mean an immediate reduction in household expenses. In fact, some costs may increase—particularly if the newly retired spouse begins traveling, pursuing hobbies, or engaging in activities that were previously limited by work schedules.
Discussing long-term lifestyle goals can help couples align their expectations and spending. Questions to consider include:
- Will you travel more now or later?
- Should you plan for larger expenses early in retirement?
- Do you anticipate changes in housing or caregiving needs?
By discussing these factors openly, couples can create a spending plan that supports shared priorities.
Reviewing Investment Allocation as a Household
When only one spouse is retired, it’s tempting to structure that individual’s investment accounts for income while keeping the working spouse’s portfolio more growth-oriented. However, treating investments as part of one unified strategy may be more effective.
Considerations include:
- Reviewing overall asset allocation and risk tolerance as a couple
- Coordinating withdrawals to manage market exposure
- Maintaining enough liquidity to meet short-term needs without interrupting long-term growth strategies
A unified investment plan can provide clarity and support for income decisions, especially when retirement dates are staggered.
Revisiting the Plan as Retirement Dates Shift
Just as life can bring surprises, retirement timelines can change. One spouse may retire earlier—or later—than originally expected due to job changes, health concerns, or evolving goals. Revisiting your income strategy periodically allows you to adapt as needed.
Staying in touch with your financial advisor during these transitions can help identify new opportunities and address potential gaps before they become problems.
Building Retirement Income Strategies for Couples
Retirement income strategies for couples aren’t one-size-fits-all—especially when the timing of retirement differs. With thoughtful coordination, open communication, and a shared understanding of each partner’s goals, couples can build an income plan that supports both individual needs and joint priorities.
Plan as a Team with SageGuard Financial Group
At SageGuard Financial Group, we help couples create retirement income strategies that reflect both shared goals and individual timelines. Whether one of you is ready to retire now or both are still planning ahead, we’re here to guide the conversation and develop a plan tailored to your unique journey. Are you interested in learning more? Contact us to get started.
