Retirement is rarely a topic that comes up in conversation – especially when you’re younger. Only 38% of married couples plan for retirement together. So, it wouldn’t be particularly surprising if you and your partner were one of the many couples who haven’t had this chat over a cup of tea!
One reason why couples often don’t discuss this important life topic is because they don’t know how to go about it. If you yourself aren’t sure, here is what you need to know.
Figure out your ideal retirement
Procrastination is the demon of the mundane world, and the best way to tackle it is to start with something easy and enjoyable. Retirement is no exception.
Instead of uncomfortably rolling down the rabbit hole of money and retirement needs, start with the good stuff – what is an ideal retirement for you and your partner? What does it look like? Do you want to travel? Move to Paris? Finally get that little cottage with the white picket fence?
If you start your retirement conversation by talking about where you want your life to take you together, then it will be much easier to get excited for the less enjoyable aspects. There’s nothing more encouraging than a fun goal, and you can help motivate each other to keep going because you’ll be doing it together. Cute, right?
Starting with this conversation can also help you to discover if you and your spouse have differing expectations. There’s no better time to discover that than now. It’s better to learn early on that he wants to sell the house and downsize and that she wants to keep the house and turn it into a B&B. It also gives you plenty of time to figure out a compromise if your aspirations are on opposite sides of the spectrum.
What is the minimum you’ll need in retirement?
Once you’ve indulged in your starry-eyed dreams together, you can move on to the next phase. This will always be easier to understand and figure out, if you actually go through step one.
What is the minimum you will each need to feel comfortable in retirement?
Unfortunately, this is often a time when spouses might disagree and argue over what is appropriate. So remember, be understanding of each other, try and look at it from the other’s perspective, and keep the talking from getting too loud otherwise you’ll never get anywhere.
When you talk about money, you really need to understand what type of financial life will bring you both happiness and safety. If you can clearly define what this means for your partner, then you can begin to have a healthy conversation about money.
This will also give you a baseline for your retirement income – while your fun retirement dreams will give you something to aim for. And there you go, that’s all it needs to be, nothing too painful.
Where are you now?
Now let’s look at those dreams with less stars in your eyes and a bit more realism. Ask yourself, how much have you already saved, and how much do you still need to put aside?
Generally speaking, for this exercise all you need to calculate is how much you have saved in your retirement pot. But this can also be hard because it’s scary to look, and you don’t want to discover that you’re already too far behind to make a difference. Probably not surprising, but this part is often why people stumble into retirement blindfolded, instead of actually dealing with the real numbers.
Getting an idea of where you are currently will help you to figure out where you need to get to. Meeting with a financial adviser can certainly help you figure out your retirement goals and how to achieve these goals.
Create a savings plan
You have your goals, and you know where you are now which is great. You will now need to consider how much you will both contribute into your retirement pots, as well as how you might increase your contributions over time. Again, a financial adviser could be a real big help here.
Not only will having regular appointments with your adviser prompt you to make decisions you might otherwise put off, but your adviser will also help you to understand the complexities of retirement planning.
Have consistently planned retirement ‘dates’ with your spouse
If having this little chat makes you uncomfortable, you’ll need to take a deep breath and plough through, because you’re probably going to have to do this more than once. Specifically, you and your spouse should talk at least once a year about your retirement plans. This is mostly to keep track of your finances, and to make sure you both still want the same thing as last year.
One way that you could make this a little more manageable and enjoyable is to turn your annual retirement talk into a date. By doing this you are far less likely to argue over the minor stuff and more likely to have an open mind. It should also be a good reminder of why you’re having this talk in the first place, you’re planning the rest of your life out with the person you’re crazy about.
Whether or not you and your spouse are in complete agreement, communication and regularly revisiting those plans will ensure that your retirement will happen.
If you are looking for more help and guidance, get in touch with us on 01609 760960. Or arrange a call back and one of our financial advisers will be happy to help.
Reference – BL083 – Nov – 2019