Plan to retire before your partner? Start the conversation early

When you retire from working, and couple that with spending more time together, it can make for a difficult new phase of life to get used to. Many retirees have built their identity on work, and are now struggling to build new routines and find meaningful activities all while getting used to a new budget.  

Amidst this turbulence, it’s natural for couples to have tough conversations about what their future in retirement holds.  

 

What’s there to discuss?

Simple: space, time and money. More specifically, how to spend and share them.  

It’s important to negotiate expectations, household roles, and boundaries so you each get the right balance of personal fulfillment and togetherness. Given the tangible nature of money, a review of finances or retirement readiness can be a constructive starting point for conversations about how you envision life after work.  

Should couples retire together? 

After a lifetime of hard work, many couples want to retire at the same time so they can enjoy each other's company. While the majority of Canadian couples stagger retirement, there are definitely benefits to retiring together.  

Retiring together can eliminate any potential resentment from one partner feeling burdened by work while the other relaxes. You can use your shared retirement to pursue joint interests and hobbies, travel the world or tackle that big project.  

Consider if it makes sense financially. Retirement eliminates work-related expenses like commuting for both partners at once. Retirees can access tax benefits to decrease overall tax bills—retiring together increases the impact of those benefits.  

Delaying retirement and working longer to match a spouse’s retirement date can also increase your overall retirement income. Luke (64) enjoys work, though he does love to golf. His spouse, Rita (60), wonders if Luke should retire soon—she has a flexible job and wants to travel.  

To help make the choice easier, they calculate their retirement income. If Luke delays collecting his pension and works until Rita turns 65, they could increase their retirement salary by 36%!  

 

Age	CPP	RRSP	OAS	Luke's Income
65	$8,604	$13,231	$8,492	$30,377
69	$11,495	$19,009	$10,937	$41,441

Thanks to the boost, they can afford to travel more for Rita, and get a fancy golf membership for Luke—a win-win!

Are there benefits to staggering retirement dates? 

Retiring together may be easier if you’re planning a significant lifestyle change, but some couples prefer to retire one at a time. Staggered retirement can be a sensible choice when you have differences in age, health, retirement income and expectations.  

There can be tax benefits to this option. For example, a retiree over 71 can’t continue to contribute to their own RRSP, but can still contribute to their spouse’s until they turn 71; this can help lower a couple’s overall tax bill. Pension splitting can also help reduce taxes if you’re earning more in retirement than your spouse.  

Retiring separately can also ensure continuation of employer-provided health insurance or other perks, reducing expenses in retirement.

One risk of this option is the non-retiring spouse may feel complicated emotions about continuing to work. Consider if changing roles or transitioning to a more flexible work arrangement might be a good compromise.  

 

Talk it out with your partner

Don’t let mismatched retirement expectations become a sitcom-worthy argument! Discuss shared space, time and money before you retire. The sooner couples examine potential gaps in their retirement plans, the better. 

Not sure what the best plan for you is? Our team can work with you to save for a harmonious retirement lifestyle that meets your needs, book an appointment today.