“Saving for retirement is daunting. We know we should do it, we want to do it, but it can feel overwhelming figuring out where to start—especially if you’re a struggling millennial.”
When couples start planning a future together, that’s when it’s time to think about long-term plans, long after the wedding, honeymoon and even early years with children. Retirement planning as a team is the best way to get on track quickly and efficiently. Couples benefit from a team mindset because, like marriage, each person brings different strengths (and weaknesses) to retirement planning.
brides.com’s recent article, “How to Plan for Retirement as a Couple,” says that if you’re realistic about how much you need and you spend the time to see what options are available, you’ll be in a better place to move forward. Let’s look at what you need to know about saving for retirement as a couple.
Examine the situation for both of you. You may not have the same savings options available to both of you. One of your employers may have a great match and the other doesn’t, one of you is an entrepreneur and has access to a SEP IRA, which allows you to save for retirement while sheltering up to 25% of your income (up to $53,000 in 2018) from taxes. When you’re a couple, you want to look at all of your options to get a broader picture.
Consider how you want to retire. Be realistic about what you want from your retirement, and what kind of retirement lifestyle you expect to have. It seems so far off, but the sooner you can start saving and investing, the better off you’ll be.
Calculate the amount of money you’ll need. Knowing how much money you’ll need to live comfortably in retirement and how much to save now, depends on your current age, current savings, expected retirement lifestyle and life expectancy. Most of these variables are hard to predict. You can use an online calculator to determine roughly how much you need to save today to replace your income, when you’re in retirement.
The very idea of retirement can seem overwhelming, when it is so far away and the amount of money you’ll need seems like so much. By starting early and planning together, even making small sacrifices together, you’ll have more time for your retirement nest egg to grow.
Reference: brides.com (June 1, 2018) “How to Plan for Retirement as a Couple”