When you ask your significant other to marry you, or if you say yes to a marriage proposal, you do so because of the love and companionship you hope to share for the rest of your lives. The rest of your lives includes after you leave the workforce so it’s important you and your spouse are both prepared so you can enjoy retirement together. Fortunately, you have a partner to support you along the way.
The most important thing to remember when you and your spouse are starting to save for retirement is that you are both on the same team. While you are individually responsible for your own retirement, it’s wise to contribute to a collective effort so that no one gets left behind. This means you should make sure you both are building toward retirement, even if one of you doesn’t have the same financial ability to do so.
One such option is the spousal IRA. A spousal IRA is a retirement account in which a working spouse is able to contribute to a nonworking spouse’s retirement savings. This is an exception to the rule that you must have earned income to contribute to an IRA. To qualify for this account, the couple must file joint income tax returns. These can be either traditional or Roth IRAs and follow the same rules and limits as regular traditional IRAs and Roth IRAs.
Obviously, it’s important to that you talk to your spouse about your retirement goals – the plan is to do it together, right? Whatever your goals are will also affect your lifestyle before retirement. The earlier you wish to retire, the less you should spend on various expenses before retirement. Your spouse may want to trade off earlier retirement with more lavish spending in the present. It’s important you discuss these things so everyone is on the same page.
Another thing to consider is differences in age. If one of you are significantly older than the other, you should be sure not to neglect their future retirement. Even if one of you plans on retiring five years before the other, this will mean a significant change to income and the other spouse’s retirement preparations could be affected.
However, staggering when the two of you retire may also be a good idea. If you both retire at the same time, the complete halt to your income can be quite a shock. Allowing some time between your retirements can ease you in and give you a chance to see what the other spouse will need to do to better prepare for the big step.
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https://www.investopedia.com/retirement/retirement-strategies-and-your-marriage/
https://www.investopedia.com/terms/s/spousal-ira.asp
Neither NEXT Financial Group, Inc. nor its Representatives give tax or legal advice.
