Why couples should consider staggering their retirements

Having one spouse stay in the workforce even just a few months longer can offer financial advantages

Why couples should consider staggering their retirements

It’s natural for couples to want to enjoy as much time together as possible, so retiring simultaneously would make a lot of sense. But according to new research, having one spouse work even a little longer has financial upsides.

One reason cited by Nicole Maestas, an economist and associate professor of health-care policy at Harvard Medical School, is that people are living longer, reported The Wall Street Journal. By having one spouse maintain their employment income, one or both spouses may put off claiming their government-provided pensions, thereby boosting their benefits. Aside from that, they could avoid touching their nest egg for a little longer, and they might also get much-needed support if the working spouse has access to employer-sponsored health insurance.

A study by Maestas also concludes that women stand to gain more from extending their stay in the workforce compared to their husbands. Because of the career interruptions they face, women tend to see their earnings peak in their mid-50s, while men’s earning power tended to slide throughout their 50s. The fact that women are often younger and have longer life expectancies than their husbands also indicates that they “should optimally retire at older ages than men.”

“There’s no question that if one of you can work a little longer, it can make a huge difference in your financial security,” Jason Scott, co-author of another recent study on retirement, told the Journal. His research suggests that extending your working years by just two to five months more, depending on your income, could be the equivalent of saving an extra 1% over three decades.

But even with the financial benefits, couples need to consider other factors before jumping into a staggered-retirement arrangement. For instance, the retiring spouse may end up adrift on their own: without the intangible benefits of work and the support of their partner, navigating the change could be difficult for them.

Division of responsibilities could also be a source of friction. Chores should be divided so that the working spouse isn’t overloaded. And if one spouse stays in the workforce primarily for the sake of the couple’s finances, it may be worth thinking about ways for the non-working spouse to contribute financially.

According to Dorian Mintzer, a psychologist, author, and retirement coach, it’s important for the working spouse to “feel appreciated” and “feel they are getting something in terms of recognition or compromises that are important to them,” such as the ultimate decision on dinner or vacation plans.