There are many things to take into consideration when both spouses are nearing the time at which they can retire. Furthermore, unlike our parents' generation, it's no longer just the man who is the largest breadwinner. Today, many women earn far more than their spouses.
Working out all of your income and expenditure whilst you are both still in employment and then predicting how that will all be affected when either of you retire, will play a significant part, on how you reach a decision on who should retire first.
If, for example, you earn a significantly greater amount than your spouse, then it would make sense for them to retire first as it's you who will be able to build up your savings for retirement at a faster rate.
However it's not just about actual earnings. If one of you has a pension and the other doesn't, it may make more sense for the person who has the pension to keep working in order to increase the pension pay out further as you accrue more contributions into it.
One of you may have health insurance coverage as well, which might cover both of you. It can sometimes be worth the person who has the health insurance continuing to work a little longer, especially if the other person suffers from a number of chronic health problems.
Both spouses will have often looked forward to their retirement together and planned this time accordingly. In theory, retirement should be about enjoying your free time but it can often be slightly different in reality.
Many retired couples will often point to the fact their 'other half gets under their feet' when they both retire at the same time. It's often better for one of them to get used to retirement first before the other. Both spouses retiring at once might have a big impact upon the household finances, so retiring one at a time make the transition a lot smoother.
If one spouse particularly enjoys their job, whilst the other positively loathes theirs, it makes far more sense for the person who loves their job to keep working for a bit longer and to allow the other person to retire and take the time to do something they enjoy doing.
While it is likely as a couple you will have common goals for your retirement, there may be things that you want to pursue separately. For example, perhaps one of you is a great inventor and needs time to follow through on some ambitious project whilst the other is simply content to potter about in the garden each day.
If one of you does have retirement projects in mind it may be more realistic for this spouse to retire first in order to work on their project.
This article was written by the career coaching experts at Renovo.