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He’s 60. She’s 48. What Does Their Retirement Plan Look Like?

The Pew Research Center looked at the age gap in couples. For the most part, people marry someone close in age. However, one stereotype proved to be true: Men who are remarrying tend to wed younger women.

When couples are about the same age, working the retirement numbers is complicated enough.  However, what about when there’s a big age gap. In fact, an article from The Washington Post asks “How will a couple’s retirement look when there’s a big age gap?” Apparently, a big age gap can lead to some special challenges.

Not only are men who have recently remarried more likely to have a spouse who is younger, said one researcher, in many cases they are marrying women who are much younger. Twenty percent of newly married men wed women who are at least 10 years younger than themselves and another 18% marry women who are six to nine years younger.

By comparison, just 5% of men in their first marriage marry women who are 10 years younger.

For women, the likelihood of having a far younger spouse is very low.

That big age gap can be a big factor in decisions about when you retire, when spouses take Social Security and in planning how much money the couple needs to save and how to invest their savings.  Since women tend to outlive men, it’s especially important for retirement savings to last longer, when the wife is much younger than her husband.

When to retire is one of the big questions. Long-term care considerations, health insurance and other health costs become more significant, when there’s a younger spouse.

Couples with big age gaps need to have a plan that accommodates the partner with the longest life expectancy. Therefore, a 70-year-old husband and a 56-year-old wife need to plan for their portfolio to last over the wife’s longer life span. That could be 30 years, especially if she has good health and a family history of longevity.

If the older partner had a higher income level over his working career, delaying Social Security filing past full retirement age to age 70 could be extremely important. It will enlarge the higher-earning spouse’s benefit and it will also enhance the lifetime benefits for the surviving spouse.

If there is a big age gap between you and your partner, you’ll need to have a lot of discussions about the issues that retirement and retirement planning brings.

Couples should sit down with an estate planning attorney and discuss the challenges they may face because of a large age difference. The attorney will be able to provide guidance, including exploring the use of many kinds of trusts or other estate planning tools that will protect the younger spouse.

Reference: The Washington Post (Oct. 22, 2018) “How will a couple’s retirement look when there’s a big age gap?”

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