Retirement is a big deal. You spend your entire career, often decades, working toward it. Enjoying retirement takes planning, and a spouse can be an invaluable asset and teammate that makes your golden years truly special.
But it takes work. Relationships thrive on teamwork and shared understanding, so you must be on the same page as your spouse to avoid stressful roadblocks to a happy retirement.
So sit down with your spouse and have these five critical conversations before clocking out of work for the last time.
Topic #1: Can we afford our retirement lifestyle?
Planning your retirement ultimately depends on determining what lifestyle you can financially support once you stop working. Whether you use the four percent rule or something else, ensuring your nest egg lasts the rest of your life depends on having the right expectations for how you'll spend that money over the years.
If you or your spouse overestimates how much you can afford to spend, you'll find yourself in trouble if your nest egg dries up too soon. Talk about what you can and cannot afford, including budgeting out your living costs to prevent this nightmare from becoming a reality.
Topic #2: What can we pay off before retiring?
Lifestyle inflation is an easy habit as your income grows throughout your career. The bigger house, the car with all the bells and whistles, the newest electronic gadgets. It's understandably tempting when you're bludgeoned with ads throughout your daily life. That's partly why it's common to have debt as you approach your 50s and 60s.
Consider discussing with your spouse what debt you can pay down before retiring. Retiring with that credit card balance or colossal car payment is money out of your retirement budget. Can you pay off your mortgage? Great! It's not necessary, of course, but the goal is to retire with as little debt as possible. Less debt means you keep more of your nest egg for what you want to spend it on.
Paying off debt isn't fun, but it's even worse in retirement. That might mean cutting back some while you still work -- something your spouse needs to work with you on.
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Topic #3: Social Security and healthcare
Government programs are in place to help elderly Americans transition to retirement. Social Security will be available to you, provided you meet the basic qualifications, such as accumulating enough credits acquired by earning employment income throughout your life. Social Security requires some thought and planning (including planning when to start taking it), and it's important to plan with a spouse, which can include planning spousal benefits. Be sure to educate yourself and discuss all options with your loved one.
Healthcare is expensive, and costs generally go up, not down over time. You don't want to pay medical bills out of pocket because that can quickly deplete your nest egg. Getting healthcare via a Medicare plan will likely be an option for you. Most people are eligible when they turn 65, and you'll automatically enroll in Plan A if you're taking Social Security by then. Still, multiple plans and rules exist -- so as with Social Security, explore all your options.
Topic #4: Are our affairs in order?
Nobody lives forever, and planning for your inevitable end of life is part of retirement planning. Dealing with loss is stressful and emotional, especially for a spouse, so having your legal affairs in order will help your spouse or loved ones cope with your passing.
Make sure you have a living will (prepared in writing by a lawyer) that stipulates your wishes, including how your assets will be dispersed after your death. According to a CNBC survey, approximately 67% of Americans have no set estate plan. Without one, your assets could be tied up in probate, a lengthy and frustrating legal process. Don't risk putting loved ones through unnecessary hardship.
Topic #5: Let's start crossing off that bucket list
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Hopefully, approaching retirement is something you're looking forward to rather than stressing over. Your retirement is called your golden years for a reason. You'll have more time to pursue goals, new hobbies, and the things you've always wanted to do. Having a spouse means you get to do these things with your partner, your ride-or-die, a person with whom you might have spent decades building a life.
You and your spouse have worked hard for a long time to set yourselves up for retirement. So make sure you both have fun and discuss what you want to do when you retire -- that vacation you've always wanted, or experiences your spouse dreamed about for years. You can do it together.
Life is all about these highlights, and having these conversations with your spouse before it's too late will make these dreams a reality.
