Retirement Planning for Couples Over 50: 7 Steps to Align Your Financial Goals

Are you and your spouse on the same page regarding retirement? If you’re in your 50s, retirement is just around the corner, so it’s time to get serious about retirement planning for couples. Take seven steps to make sure your financial goals are aligned and on track.

1. Estimate Your Savings and Its Future Potential

If you’re in your 50s, you’re probably still saving for retirement, and you may be focused on catching up on your retirement savings. You may not know exactly how much you’ll have set aside when it finally comes time to retire. However, you can make a pretty good prediction of how much you’ll have saved based on your current savings and how much you’re putting aside each month, as well as a conservative estimate of gains you’re likely to make.

This is also a good opportunity to check whether you’re saving enough. One way to do this is to compare your savings to the average retirement savings for married couples by age. According to the Federal Reserve Board, adults between the ages of 45 and 59 who say their retirement savings are on track usually have a minimum of $250,000 saved.

2. Calculate Your Retirement Income

Before you can solidify your retirement goals, you need to figure out where you currently stand. Calculate your expected retirement income. This may include:

• Social Security retirement benefits. A retirement calculator including Social Security can help you with this. You can use the Social Security benefits calculator to estimate how much you will receive.
• Pensions or 401ks. If you are set to receive an employee benefit retirement plan that pays a monthly income, include that in your calculations.
• Annuities. If you own any annuities that will pay a monthly income in retirement, include that in your retirement calculations.
• Any other income sources. This could include income from real estate investments or royalties that you are due.

Add everything together to see how much you can expect to earn. If some amounts are uncertain, it’s smart to be conservative in your estimates. Ending up with more income than you expected is a welcome surprise, but having less than you were counting on can be disastrous.

3. Decide on a Retirement Spending Plan

Monthly retirement income is easy to budget. Budgeting your retirement savings can be trickier. You don’t want to blow through it too fast. At the same time, you don’t want to be overly frugal and not enjoy your retirement. To find a balance, you need to figure out a retirement spending plan.

There are some guidelines you can use. A popular one is the 4% rule. If you follow this rule, you withdraw 4% of your retirement funds in your first year of retirement. In every year after the first year, you adjust this amount for inflation.

The 3% follows the same basic principle, but you start by withdrawing 3% in your first year and adjust that amount for inflation in each subsequent year.

If you follow these guidelines, your retirement savings should last for the duration of your retirement, but it is still possible to run out of money. This might happen if your retirement is especially long because you retired early or lived a long life. Economic conditions, such as poor market performance or high inflation, could also deplete your retirement funds sooner than expected.

4. Determine How You Want to Spend Retirement

Your retirement shouldn’t just be a source of financial anxiety. It should be something you enjoy. Think about how you want to spend your retirement, and make sure you and your spouse are on the same page.

• Where will you live? Do you want to stay where you are, or move to another location that better suited for retirees? Do you want to keep your house, or do you want to downsize or move into a senior community?
• How much will you travel? Many retirees use their freedom from work as an opportunity to travel the globe. Where do you want to visit, and how often do you hope to go on vacation?
• How will you spend your time? Retirement hobbies can help keep you active and healthy. Do you want to spend your time golfing, gardening or going out to eat?

5. Calculate Your Retirement Expenses

Now that you have an idea of how you want to spend your retirement, you can start to calculate your retirement expenses. It’s important to be thorough and realistic. Otherwise, you might find yourself without enough money in retirement.

Make sure you include these expenses:

• Housing (including mortgage or rent, insurance, property tax and maintenance)
• Utilities (including water, energy, internet, and phones)
• Taxes (including income tax)
• Health (including Medicare premiums and out-of-pocket expenses)
• Insurance (other insurance premiums, such as life, long-term care, or car)
• Groceries
• Personal care
• Entertainment
• Travel
• Dining out
• Hobbies
• Family (including gifts and any support you plan to provide)
• Other (any other expenses you expect to have)

Don’t forget about inflation! Prices typically increase at a rate of around 2% to 3% each year. Consider using a retirement calculator for couples that includes inflation.

6. Compare Your Retirement Costs to Your Retirement Funds

If you’ve made it this far, you have a good idea of your retirement income, savings and expenses. Now it’s time to see how these figures compare. Do you have enough income and savings to cover your expenses, or are you falling short? A retirement calculator with Social Security included may help.

7. Create a Gameplan to Make Up the Difference

If you have enough retirement funds for your anticipated expenses, that’s great. Take a moment to celebrate and then make sure you stay on track between now and your retirement.

If you DON’T have enough retirement funds to cover your anticipated expenses, you need to figure out how to bridge the gap. This could involve reducing your expenses. Maybe you’re fine with downsizing to a smaller home or moving to a less expensive region.

If you’re not willing to sacrifice the retirement you’ve envisioned, you need to find a way to increase your funding. You still have some time, so you could focus on increasing your income by working more hours, securing a better paying job, or taking on a side gig.

You can also explore different financial strategies for retirement. Instead of just keeping your funds in stocks, bonds, and cash, you may also use some of your funds to buy an annuity that will provide retirement income. There are different types of annuities to consider, including fixed annuity options that let your grow your retirement savings with a guaranteed interest rate and tax-deferred status.

Consider these helpful retirement planning resources:

• In our Learning Center, you’ll find a free retirement planning guide that walks you through every step of envisioning your ideal retirement.
• Use the annuity calculator to estimate how much your annuity could be worth.
•  Are you interested in an annuity? Ask us about our all-new annuity option, Forever Fund, designed to deliver guaranteed retirement income you can’t outlive. Launching in late August, this powerful new solution helps you plan with confidence for every chapter of retirement.