Retirement? What do you mean, Retirement?! That is in the waaay distant future, you may say.
Well the lock down, shelter in place, husbands and wives/girlfriends and boyfriends/parents and kids working from home TOGETHER is just that: a warm-up for retirement. Or a forced “retirement together” for those already retired.
Think about it: we work our whole lives and hopefully save a bunch of money along the way, for what? At the simplest, to be able to enjoy the people and homes in our lives someday. (Travel and other things are part of it, but the family and people will always be there. Ask anyone who is retired or ask a family member of someone who is retired.)
So how do the current stay-at-home orders relate to a “warm up” for retirement? Retirement – or being one-on-one 24/7 with the same person or people – is not as easy as it looks! Here are a few reasons I have heard and seen from clients and friends who have attempted or achieved retirement:
- Husband and wife retiring at the same time = not always a great idea. There is evidence that one spouse retiring before the other, or “staggering” retirement by several years for a husband and wife, can make a lot of sense. As a number of people have experienced recently, suddenly being together 24/7 is not always a “picnic”. Emotionally or activity-wise. Bottom line, it takes an actual plan for “getting adjusted” to being with a person or people 24/7!
- Financially, when both members of a couple retire at the same time, unforeseen financial challenges can develop. These events can come entirely out of the blue – health issue, expensive and unanticipated medical procedure, a family member in need – and BAMM! With both people retired and most likely no guaranteed pension income, the financial side becomes strained. By staggering retirement, there is at least the opportunity for a family to adjust to losing the income of the retired person and managing spending from a portfolio according to a plan.
- Social Security claiming for a couple needs to be planned out well in advance. Rarely is simultaneous claiming of Social Security a good idea. One spouse claiming… and then the other spouse holding off for beyond “full retirement age” can boost overall social security income over the long-term. Even the best laid social security plans will change but this item is worth a discussion with an expert (hint: I know a few of these subject matter experts).
- Insurance policies can play a role in a successful “staggered” retirement plan. The insurance discussion is beyond the scope of this edition of TGIF 2 Minutes.
- Health. If we have learned anything from the Coronavirus “shelter in place” orders it is that health and working out from home can be the cure for not getting along with your spouse or housemates! Zoom workouts, the Peloton (pre-recorded and live bike spinning workouts done from home) or anything where you can crank up the music with headphones (!) can be a temporary escape from other people. Even simple and regular walks outside can produce amazing health benefits.
A popular saying amidst this Coronavirus experience has been, “we are all in this together”. Indeed, we are. But togetherness, just like managing our financial lives, needs a plan too.