You've hopefully now been able to address any inequalities, but if you want to live harmoniously with your partner in retirement, you need to work together, co-ordinate your plans and discuss things as they arise.
Two Become One (Timelines, That is)
You definitely need to co-ordinate your timelines. We’ve already looked at the importance of building a timeline so you know what is coming in and when in terms of your pension provision.
We’re talking about occupational plans, any annuities you might have, when you might start thinking about taking an income from personal pensions, state pensions, rental properties and any other different income streams.
This is secured income. If there are two of you this will include two lots of income coming in and building over time to a maximum level of secured income when both of your state pensions have kicked in.
Find out what DB pensions you both have, if any. Find out what your respective state pensions are and when they will pay. Then identify what your gaps might be and how much you need to have in capital to address that.
This will inform your plans for when you might like to retire. Note the word ‘inform’ as in not ‘dictate’, at least hopefully not! By knowing what is coming in and when, you can at least see if your ideal retirement dates are realistic and if not, work from there to either fill the gap or reassess.
I think that’s the ideal order of doing things. Come up with an ideal goal or outcome, dream a little bit without being constrained by your finances, see if the finances match up to it, and if not, make a plan.
If there’s a large gap between your ages, like ten years or more, then one retiring at 60 might mean the other one retiring at 50, IF you decide you want to finish work together. Getting the timeline thrashed out helps focus the mind on what you really want out of the whole retirement deal. You don’t have to synchronise them; just know how they play together.
Prepare for Life Together
Financially speaking, all you have to do is co-ordinate. That’s straightforward enough if you’re broadly on the same page. Keep the dialogue open and you’ll be fine. But in the 20-odd years I’ve been doing my job, I’ve noticed a marked uptick in the number of relationship breakdowns in retirement.
A quick check of the ONS site shows that this is indeed the case, a trend they put down to increasing life expectancy as well as increased technological proficiency leading to trying out online dating! Another factor is likely to be that folks will be working longer and hence be potentially more financially independent of their partner for longer.
Again, I’m in danger of stepping outside my lane here, but it seems obvious to me that if you’ve had a long time where you’ve been separate for a good part of the day at work, only coming together in the evenings at home, then suddenly to be together all day every day is going to be a shock! I’ve had conversations where clients have articulated exactly that concern, most often with the woman expressing concern about having him ‘under her feet’ all the time!
This too needs addressing ahead of time. It needs to be talked about and steps taken to find a way to make it work, perhaps by identifying hobbies or activities that you can start to do together and spend more time together.
A quick personal example. Jo was a stay-at-home mum for 15 years, only returning to work four years ago – this has been great for her. That coincided with our girls being much less dependent on us in the evenings.
We found that we were spending much more time together, but reverting to our phones and laptops, watching some TV but certainly not ‘relating’ as we should. We took up dancing two years ago and it has been transformative for our relationship.
Your situation is different to mine, but you definitely need to address it. If you have even a nagging concern about what life might be like when you have more time together, then address it ahead of time! And do it with care, respect and consideration for the other person. Don’t impose things on them; be collaborative.
Keep the Dialogue Open
I think the lesson here is to address things head on, perhaps more than you have in the past. You’re heading for a major transition and you need to be prepared for all aspects of this. You know your situation better than anyone and can identify how you are doing as a couple and what the possible issues might be going forward, and particularly as you look to retire.
It’s crucial that you don’t let this process be a one-off. Keep the dialogue open and keep coming back to it. As life and your plans change, so might your thoughts on all this stuff, so keep talking.
Finally, a quick note about what I’ll call financially dysfunctional relationships. If one partner is dominant to the detriment of the other, that’s not good. Financial abuse is a thing, and if you feel you’re on the receiving end of that, then you need to seek help. Please, don’t settle for this kind of repression. It’s complex, I know, which is why you need to seek help from specialists.
OK, let's move on.
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