March 20, 2018

Retirement planning for couples

A couple review their finances prior to retirement while walking on a beach. A couple review their finances prior to retirement while walking on a beach.

Entering retirement is cause for celebration – it can mean having more time with the grandkids, traveling and doing other things you love. But if you’re in a marriage or a serious relationship, it’s important that the two of you are on the same page as you determine how you’ll finance your retirement.

Working closely with your partner when you enter retirement can help you get ready for major life events – like weddings, trips abroad or exciting purchases. It can also help you prepare for emergencies, like fixing a leaky roof or traveling abroad to visit a sick family member. If you and your partner aren’t on the same page, it may be more challenging to manage these financial issues.

Here are some questions to help jump-start the conversation and begin building a retirement plan that meets both your needs:

1.    When do you want to retire?

You and your partner will need to figure out when you both want to retire. Without knowing that for certain, it could be difficult to determine how much income you’ll need to fund the entirety of your retirement.

2.    How much money will you need in retirement?

It’s important for you to work together in figuring out how much money you’ll need to have the retirement lifestyle you both want. Will the two of you be happy if you have less income than you do now? If that sounds like it could affect your big plans, such as traveling the world or buying a cottage by the lake, then you may need to figure out how you can secure additional income.

3.    What do you really want to do after retiring?

It’s important you work together to figure out what each of you really wants to do after you’ve retired. If your partner is excited about seeing the world but you’re more interested in trips closer to home, then you need to have a chat about those plans.

4.    Do you want to work in retirement?

Entering retirement doesn’t have to mean you’ve left work behind. You and your partner may have personal passion projects – such as writing a novel, starting your own business or simply scaling back what you did before – that could help generate income in retirement. If that’s the case, then it’s worth talking about your plans with your partner.

5.    What are your guaranteed sources of income?

You should have at least a couple guaranteed sources of retirement income, though this will depend on where you live and your work prior to retiring. Most Canadians should have access to funding through Old Age Security and the Canada Pension Plan (or, in Quebec, the Quebec Pension Plan). You may also be receiving income through a workplace pension.

You may be able to supplement that income with income annuities, which can help you cover basic living expenses, like utilities and car payments. In any case, it’s important you know your guaranteed sources of income and how this will help the two of you cover both basic and unexpected costs.

6.    Factor in your health and wellness

It’s a good idea to talk to your spouse about health matters involving the two of you or anyone else in your immediate circle, such as close friends or family members, and determine how that may affect your financial situation in retirement. Think about how investing in measures that could improve your health and wellness in retirement – like spending more time in a warmer climate – could impact your finances, and work on accommodating those plans.

7.    Keeping your money growing

A lot of couples gearing up for retirement focus on the question “will we have enough to last throughout our retirement?” But it’s also important to consider how you can take the money you already have and make it grow, giving you more opportunities to do the things you enjoy.

For Canadians who feel passionate about seeing their savings grow in retirement, there are some options. For example, you could explore investing in a segregated fund policy that offers guaranteed protection in addition to the potential for investment growth. Or, you could put your money in a retirement program that blends segregated funds with income annuities, which can provide you with a regular source of revenue in retirement. If that’s the case, Great-West Life’s HelloLife program Opens a new website in a new window may be worth investigating further.

8.    Estate planning

Entering retirement is a good time for you and your partner to revisit plans for your estate. Consider who should receive your assets should you and your partner pass away. If you haven’t explored these issues recently, then it may be a good time to return to them to ensure they meet your needs.


A financial security advisor Opens a new website in a new window with Great-West Life can help you and your partner explore these matters and create a financial security plan that meets your needs and your goals for the future.

 

Talk to an expert

Not feeling confident in your finances? You can talk to one of our financial security advisors who will work with you to craft a financial plan tailored to your needs.

Contact an advisor