With couples of similar ages, planning for the future is quite naturally a joint effort. However, if you’re married to somebody who is considerably older or younger than you, the future will look different and mean various things to each of you. You wish to possess comprehensive money and estate plans to shield yourself, your relation or partner, and other loved ones. For these plans to figure out as intended, it’s vital that you just have an open and honest language along with your spouse or partner regarding financial and estate planning matters.
Marie and Tony have recently celebrated their 35th wedding anniversary. The couple married when Marie was 21 and Tony was 32. The age gap has never been a problem in their relationship, but it has triggered several, sometimes heated, conversations as Tony prepares to retire.
Tony retired from the military after 20 years of service. He has worked as a security consultant for the past 25 years and is thinking about retiring at the end of the year. Marie is a physician who works in academic medicine at her local medical school. She has worked hard to climb the ladder to associate dean and has no intention of retiring for the next decade or so.
Tony would like Marie to retire so the couple can travel and enjoy a relaxing retirement. However, Marie is not onboard with this plan. Marie likes to keep busy and sees herself becoming bored with an extended retirement.
It is not unusual for couples like Tony and Marie to disagree about retirement and unemployment, especially when there is a significant age gap between the two partners.
Here are some questions to get this conversation started in your relationship:
- How do each of you define a perfect retirement?
- What is the ideal age for retirement?
- How will retirement affect cash flow in your household?
- What lifestyle changes will you need to make if one or both of you retire?
- Is there a way to accommodate the retirement plans of one person with the employment plans of the other?
- How will health insurance be handled if you retire?
Marie and Tony have financially planned for their retirement, but that does not mean that there won’t be some speed bumps in their financial future.
Here are some points Marie and Tony plan to discuss with their financial planner:
- They plan to discuss several scenarios for retirement plans. Plans change over time. Marie may plan to continue working, but once Tony retires, she may regret that decision and want to retire as well.
- Can the couple afford for both of them to stop working? A financial planner can help answer this question and bring up other points to consider, such as how long-term illness or disability may affect Marie and Tony’s plans.
- Will Tony and Marie need to change their lifestyle if they both retire? Are they willing to make these changes? A financial planner can help them evaluate their potential options.
- Tony will need to withdraw the required minimum distributions from his retirement accounts before Marie. A financial planner can help him determine a schedule for these distributions and how this money will be used.
- Will Marie anticipate using Tony’s retirement funds for her lifetime as well? Is there enough money to support this plan?
Tony and Marie have also scheduled a consultation with their estate planner. Recent discussions between the couple have opened their eyes to the many unanswered questions they have about their retirement plans. Tony wants to ensure that Marie has enough money to support her current lifestyle throughout her retirement since she is 11 years younger than him. He knows that they must balance spending now so the couple can enjoy retirement together with ensuring Marie has enough money to support her expected longer lifespan. The couple would also like to leave an inheritance for their two children.
Here are some topics they plan to address:
- Trusted decision makers: Marie and Tony have a Last Will and Testament and living trust. They will update these documents and the people they have chosen to serve as executors, successor trustee, agent under a financial power of attorney, and agent under a medical power of attorney. Because of their age difference, they have also named alternates to each of these positions. The couple does not have any children from a previous relationship, but if they did, this would be another consideration they would need to address.
- Beneficiaries: The couple wants to revisit their plans for beneficiaries and address how they should transfer their real property to their children, either as an outright inheritance or in their trust. They also want to ensure that the surviving spouse has access to all their accounts and property until their death.
There are many questions to consider about employment, finances, and estate planning when a couple has an age gap. Your estate planning attorney can help you consider these questions and help clarify each partner’s retirement goals.