Going on a trip with another person can reveal differences that don’t come up in everyday life. You might agree on where you want to go and how long you want to stay, then spend an entire evening discussing whether to book a guided tour or explore on your own. One likes knowing where they’ll be each day, with reservations made and transportation arranged. The other finds that much planning restrictive. They want time to explore a neighborhood that catches their interest or try a recommended restaurant that wasn’t on the itinerary.
Both people are looking forward to the same vacation. They just have different ideas about what will allow them to enjoy it. Knowing that beforehand can save a considerable amount of frustration.
Couples can agree on what they want from retirement without realizing how differently they feel about paying for it. You may both want to retire in a few years, travel more, and spend time with your grandchildren, but you may not have discussed how you’ll feel about drawing from savings once your paychecks stop.
Understanding What Makes Each of You Feel Secure
While you’re working, a regular paycheck can keep differences over investing from affecting everyday spending. You may disagree about how much to hold in stocks, but your earnings still cover the bills. When you begin drawing from investments to pay those expenses, a market decline can bring those differences into focus, especially if one of you becomes reluctant to spend.
One spouse may see those withdrawals as the purpose of having saved. They expect the balance to fluctuate and accept that they’ll sometimes need to draw from investments during a down market. The other may find it difficult to spend while the balance is falling, even when the withdrawals are consistent with their financial plan.
Labeling one person aggressive and the other conservative doesn’t tell you much about how to address the disagreement. The person who favors a large allocation to stocks may be concerned about inflation and the possibility of living another 30 years. The one who prefers more dependable income may worry about having to cut spending at an age when returning to work would be difficult. Each may be trying to protect against a different financial problem.
Discuss what those concerns would mean for your daily life. After several poor market years, one of you might be willing to reduce travel, while the other would be reluctant to give up trips you had looked forward to taking. Even if you could afford to go, selling investments after a decline might make the vacation difficult to enjoy. You might also discover that keeping savings available for unexpected expenses matters more to one spouse, while knowing the monthly bills are covered matters more to the other.
Talking through these possibilities helps you identify the spending you want to preserve and the adjustments you would both accept, rather than assuming you’ll respond the same way when circumstances change.
Making Room for Both Preferences
When one person handles most of the finances, it can be easy to let that person’s approach drive the retirement plan. The other spouse may go along with it because they trust their partner, even if they don’t understand how the plan will work or have reservations about the decisions being made.
There is no single right way to put together a retirement income plan, and most households will draw on several sources to fund their lifestyle. Social Security provides ongoing income, perhaps alongside a pension, while investments can help savings grow and provide money for expenses that change from year to year. How much you rely on each will depend partly on what’s available and partly on how much uncertainty you’re willing and able to accept.
Begin with the bills you want covered even when the economy or investment markets are struggling. Housing, food, utilities, and insurance are likely to appear on that list, but the conversation shouldn’t stop with necessities. Visiting family may matter enough to both of you that you want to protect that spending as well.
Identify expenses you could reduce or postpone, such as a major purchase or a more expensive vacation. Be specific about what you would be willing to change. One spouse’s idea of spending less might mean skipping a few dinners out, while the other assumes you would be willing to cancel an annual trip.
Dependable income becomes especially important when you have little room to cut expenses or would find those cuts difficult to accept. Sorting your spending this way also gives you a clearer sense of how much your savings and other income will need to support, which is the question our workshop on How Much Do I Need to Retire helps you work through using your own numbers.
How Social Security Fits Into the Conversation
Delaying Social Security can increase your monthly retirement benefit up to age 70; waiting beyond that age provides no additional increase for delaying. A bigger payment can help cover more of your future expenses and reduce the amount you need to withdraw from investments once benefits begin. Waiting also means giving up payments in the meantime, so a larger monthly benefit does not necessarily produce more total benefits over your lifetime.
If you retire before drawing benefits, you’ll need another way to cover your expenses in the meantime. Using savings may make sense financially while still being difficult for one spouse to accept. Someone who values a higher monthly benefit may also worry about the withdrawals needed to get there.
If you are considering whether the spouse with the larger benefit should wait until 70, compare an earlier claiming date with a later one, including the portfolio withdrawals each would require over time. Consider how both options would hold up if investment returns were poor early in retirement or either of you lived well into old age. This gives you a fuller picture than comparing monthly benefit amounts alone.
You may find that waiting fits your needs, or that claiming earlier would be more practical. Your health, savings, other income, and immediate spending needs all affect the decision. Both spouses should understand the tradeoff before committing to it.
Planning for the Surviving Spouse
Your claiming decision may also affect the income available to your partner after you die. If you are the higher earner, consider how the person who may eventually manage the investments alone would feel about relying on them for income.
When the higher earner delays claiming, the resulting increase in their benefit can also increase the benefit available to their surviving spouse. The amount received also depends on the survivor’s claiming age and eligibility for benefits on their own work record; the two benefits are not simply added together. A larger survivor benefit could cover more of that person’s expenses with less dependence on portfolio withdrawals. Even if you would be comfortable claiming earlier, delaying may help provide the dependable income your partner would prefer.
Make the Waiting Years Part of the Plan
If you decide to delay claiming, work out how you’ll cover expenses until benefits begin. Estimate how much you’ll need from savings and identify the accounts or assets you expect to use. Review the projected balances together so you both understand how the planned withdrawals would affect your savings. Once the larger benefit begins, you may need less from the portfolio to support the same spending.
A lower balance during the waiting years may partly reflect the withdrawals you intended to make. Without that context, one person may see the decline as evidence that the strategy is failing, while the other views it as expected. Comparing actual spending and investment results with the projections can help you determine whether adjustments are needed.
Agree on how you would respond if conditions were worse than anticipated, including which expenses you could adjust and which assets would remain available for upcoming withdrawals. Working through those choices in advance can reduce the pressure to make hurried decisions during a market decline.
Keeping the Conversation Going
Living on your retirement income will give you a better sense of how comfortable you are with the arrangement. A spouse who expected withdrawals to be stressful may settle into the routine, while someone who had always tolerated market declines may feel differently without a paycheck. Include those reactions in your financial reviews, especially when they begin affecting everyday decisions.
Set aside time to talk about whether you’re enjoying the retirement you planned. Discuss purchases you’ve postponed out of worry and expenses that left either of you uneasy afterward. Persistent reluctance to use savings deserves attention, even when the numbers suggest you can afford it. Reviewing how the withdrawals fit into the plan may help, but the concern could also reveal that the strategy calls for spending cuts one of you would find difficult to make.
Your priorities may shift as well. Travel might become less appealing, helping family may become more important, or a change in health could alter your expenses. Review those changes together and update your spending plan. Both spouses should understand any resulting adjustments, even if one handles most of the financial administration.
You don’t have to feel the same way about investment risk to enjoy retirement together. Taking each other’s concerns seriously, and revisiting them as circumstances evolve, can make it easier to use the money you’ve saved for the things you both want to do. That includes booking the trip you’ve talked about for years and having both of you feel comfortable going.
Want to learn more? Listen to Episode 254 of the Retire With Style Podcast.
