Golden Love, Golden Years: Smart Retirement Planning for Older Newlyweds

by Tamila McDonald
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Golden Years

For newlyweds approaching their golden years, planning strategically for retirement is essential. Getting married usually means that your financial picture – as well as how you envision living your life – differs from what you may have predicted some years ago. Usually, that means adjustments are necessary to ensure your golden love also gets its dream life. Fortunately, a few simple steps make it easier to head in the right direction. Here are some tips for smart retirement planning for older newlyweds.

Assess Your Current Financial Picture

The first step you and your spouse need to take is to find out where you stand. Examine the value of any existing retirement accounts and estimate how much you’ll potentially receive through Social Security based on your current course. Additionally, consider what your spending will potentially be like once you retire, accounting for the type of life you’d both like to lead.

Ultimately, the goal here is to see whether your current retirement savings aligns with your prospective financial needs. That way, you can determine if you’re essentially on target or need to make changes to bring your dreams to life.

As part of this exercise, newlyweds should discuss when they envision retiring. Each spouse may have a different timeline in mind. Since when a person starts taking distributions or ends up applying for Social Security benefits alters the picture, it’s wise to spend time getting on the same page. By doing so, it’s easier to get accurate estimates of how much income will be available and how much time it needs to cover.

Leverage Catch-Up Contributions

Once you reach age 50, you’re able to set more money aside for retirement through what’s known as a catch-up contribution. It essentially gives you a way to boost your retirement savings in the years immediately preceding your exit from the workforce, and taking advantage of the option can make a significant difference if you’re short of your retirement savings goals.

Catch-up contributions are an option for 401(k)s, 403(b)s, and various types of IRAs. Exactly how much extra you can set aside does depend on the type of account you have, and the amount may change from one year to the next. As a result, you’ll want to see what options are available based on your unique situation.

For 2024, individuals age 50 and older can contribute an additional $7,500 during the year as a catch-up contribution if they’re using a 401(k), 403(b), or 457 plan. For SIMPLE plans, the catch-up contribution is limited to $3,500, while traditional and Roth IRAs are restricted to an extra $1,000 as a catch-up.

Examine Your Allocations

Most retirement accounts involve investments, and it’s common to have a mix of assets. Some assets are inherently riskier than others, so you may want to examine your current allocations to see if an adjustment is necessary if you’re in your golden years.

How much risk is suitable can depend on several factors. Generally, experts recommend skewing more conservatively as you get older. However, each person has a unique risk tolerance, too, and it’s wise to factor that into the equation.

When assessing the amount of risk in a portfolio, older newlyweds shouldn’t just consider their risk tolerance but also their spouse’s. The goal is to ensure that the allocations don’t cause any unnecessary anxiety but are still appropriate to ensure you can reach your savings targets.

Update Beneficiaries

Beneficiaries on retirement accounts are usually people designated to receive all or a portion of an account’s value should the account holder pass away. Since getting married is a major life change that introduces new people into each spouse’s life, beneficiary updates may be in order. Spouses may want to add each other as beneficiaries of their accounts. Other changes may also make sense, though that varies depending on the broader picture.

Similarly, it’s wise to update any wills or estate plans to reflect beneficiary changes. That reduces any confusion if someone passes, which can make settling out a person’s affairs easier.

Do you have any tips that could help older newlyweds plan wisely for spending their golden years with ample retirement savings? Did you get married later in life and want to tell others how you and your spouse prepared for retirement? Share your thoughts in the comments below.

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