Gord Schakelaar EPC

Branch Manager, Senior Financial Planning Advisor

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Retirement planning for couples

September 24, 2014 • Retirement Planning

According to a Statistics Canada report,1 about half of Canadian couples nearing retirement expect to retire at the same time. But when the time comes, only about 30% of them actually do.

That’s a pretty significant disconnect, and it would seem to indicate that a lot of Canadian couples may be overlooking an important decision: is it better to synchronize retirement dates or take a “relay” approach?

The synchronized approach

Synchronizing retirement dates brings the obvious benefits of enjoying time together from the outset as this new chapter of life begins. Retiring early or at the “traditional” age of 65 may help to maximize the number of years you and your spouse enjoy together.

However, if retiring together means one or either of you has to delay retirement until later in life, it may mean you no longer have the energy, good health and fitness level to pursue an active lifestyle.

The relay approach

Sometimes, the retirement decision is made for you. For example, one spouse may need to retire early because of health concerns or be given an attractive termination package ahead of schedule. Where the relay approach is a conscious decision, however, it may be due to one or more of the following factors.

Age. Where there is a significant age difference between spouses, it is quite natural for the older spouse to retire first.

Attachment to work. Each spouse may have a different philosophy about the work-retirement transition. One spouse may be quite ready to leave the workaday world behind. The other may still feel the need to fulfill career aspirations, view
their career as a calling, or see their work as an expression of their identity. For example, about one in eight physicians in Canada are 65 or older.2

Finances. Taking the relay approach could also be part of a financial plan. With one spouse working longer, a couple can increase their nest egg and delay the drawing down of retirement savings. Also, they can continue receiving group life and health insurance benefits from the working spouses’s employer and delay the start of Canada or Quebec Pension Plan payments for a higher pension.

Plan ahead, but be flexible

Each couple will have their own reasons why it may be better to retire together or at different times. The important thing is to start communicating well in advance and then come speak to us.

We can help you put the financial plans in place to retire when and how you want. We’ll also make sure that your plan is flexible enough to accommodate any changes in your circumstances. Sometimes, what seems ideal in the planning stage may be less than perfect in reality. For example a still-working spouse may envy the life of leisure her or his partner enjoys. Whatever happens, you can count on us for support at every stage of your life.

1 Statistics Canada, “Retiring Together, or Not,” Perspectives on Labour and Income, 2008.
2 Canadian Institute for Health Information, “Putting Away the Stethoscope for Good?” 2011.

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