When One Spouse Retires First

It’s easy to think of retirement and dream of a relaxed stroll into the sunset with your significant other by your side. After all, many advertisements repeat this theme with salt-and-pepper-haired couples strolling hand in hand across a beachfront.

Yet, this is not always the case. Anymore, we often see couples retire at different times – perhaps one spouse actually enjoys going to work every day while the other can’t wait to retire. Different retirement times, however, can open financial and emotional rifts for couples. What if the retired spouse enjoys travel, or wants to spend long stretches with family? Did the couple consider the financial impact of one spouse retiring versus both spouses? What if the working spouse is resentful of the time or money the retired spouse spends on activities?1

At our firm, we help with issues related to couples’ financial preparedness for retirement. If you and your spouse are looking toward retirement–either at the same time or years apart – give us a call.

With the proper planning, the financial piece of retirement doesn’t have to play into your marital dynamic. Based on your circumstances, a wide variety of solutions can help provide one or more retirement income streams while allowing an investment portfolio the opportunity to grow—possibly even throughout retirement. Many of today’s retirees hope to benefit from ongoing growth opportunities to help offset the potential long-term impact of inflation, rising health care and long-term care costs, and increasing longevity.

Now, couples with a big age gap may need a totally different set of strategies from other couples. For instance, if you have a significantly younger spouse, it may be more appropriate to invest a higher percentage of an investment portfolio in stocks than it would be for couples closer in age.2

One way the IRS helps out couples with a large age gap is with an opportunity to reduce the size of required minimum distributions (RMDs) from tax-deferred retirement plans, which are generally required to start at age 70 ½. When the account owner is at least 10 years older than their spouse, and the spouse is the named beneficiary, the older spouse can use a different factor for their RMD calculation, which can result in a lower payout. The benefit to this rule is that it gives more of the older spouse’s funds the opportunity to keep growing while the younger spouse continues to work.3 This information is not intended to provide tax advice. Be sure to speak with a qualified professional about your unique situation.

Another retirement income option to consider for age-gap couples is a joint-and-survivor annuity. There are many different types of annuities to choose from, but joint-and-survivor actually refers to the type of distribution option that most annuities offer. If you purchase an annuity and choose this payout option, the annuity will continue to make payments to the surviving spouse, regardless of which spouse dies first.

A 50 percent option will continue to pay out half of the original amount to the survivor once the first annuitant dies, and a 100 percent option, while offering a lower original payout, guarantees the same amount for the life of both spouses.4 This can be a suitable component of a retirement income plan for couples with a significant age gap.


Whether you and your spouse are similar ages or decades apart, and whether you plan to retire on the same day or years apart, you should be planning for the financial – and emotional – components ahead. If you’re ready to plan, we can help.

Content prepared by Kara Stefan Communications.

1 Karen DeMasters. FA Magazine. May 12, 2017. “Who’s Retiring First?” https://www.fa-mag.com/news/couples-retirement-gap-32725.html?section=3. Accessed Sept. 11, 2017.

2 Kerri Anne Renzulli. Time. June 14, 2017. “Money, Marriage and a Big Age Gap: 6 Ways to Make Sure Your Retirement is Safe.” http://time.com/money/4810932/age-difference-relationship-couples-retirement-advice/. Accessed Sept. 11, 2017.

3 IRS. 2017. “IRA Required Minimum Distribution Worksheet.” https://www.irs.gov/pub/irs-tege/jlls_rmd_worksheet.pdf. Accessed Sept. 11, 2017.

4 Zacks. 2017. “How Does a Joint and Survivor Annuity Work?” http://finance.zacks.com/joint-survivor-annuity-work-2270.html. Accessed Sept. 11, 2017.


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