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Tips For Talking About Retirement Plans With Your Significant Other Thumbnail

Tips For Talking About Retirement Plans With Your Significant Other

If I asked you what you wanted your retirement to look like, what would you say?  Do you have a specific image that comes to mind?  Maybe it involves travel or maybe it is more volunteering.  However, if you are like many people, you don’t really have a vision of retirement.   Often this comes from simply not knowing how to create that vision.  Here’s a few pointers to use with your significant other to help craft that vision.

Before we dig into the heart of the conversation, let’s understand how to have the conversation.   First things first, don’t just randomly bring it up.  This is an important conversation that deserves to be done within minimal interruption.  I recommend setting aside time to talk about it.  Better yet, do it over a nice date night!  As you go into this conversation, also remember this is meant to be an evolving conversation.  Your goals may change over time so embrace that.  You may think at age 40 that traveling the world sounds amazing, but as your children grow you may find yourself wanting to be closer to home for them and their family.  Don’t worry about how you might feel in 5-10-20 years...focus on how you feel now.  Lastly, focus on the big picture items for now.  These are the ones that will impact your planning and strategy the most so don’t get bogged down in details.

As you have the conversation, consider using what I like to call the “needs-wants-wishes" method.   I use this with clients because I want them to tell me what they need to be happy in retirement.  Then we move onto what would they really want to have and finally we conclude with the ‘i wish we could …" which is the proverbial ‘BHAG’ - the Big Hairy Audacious Goal (if you aren’t familiar with this concept, do yourself a favor and look it up!)  

As I mentioned earlier, work on the big picture for now.  One of the easiest starting points is where to live.  Do you see yourself staying in the home you are currently in or would you be more likely to downsize to a smaller home or even the condo lifestyle?  Do you see yourself staying in the area you currently live or do you see yourself relocating or splitting time between places?  Using the “needs-wants-wishes” approach from above, yours might sound something like:

“I need to have my house paid for to feel comfortable.  What I really want though is to have the house paid for and enough extra to rent a condo in Arizona for a month or two.  But my wish, if I could have it my way, would be to have the house paid for and own the condo in Arizona so we could use it whenever we want and rent it out for income when we aren’t using it.”  

The next thing I’d consider is the timeframe.  Some people work in jobs where they will walk away from it at a certain age and never look back.  Others may choose to slow down or even move into a consulting role.  Take some time to consider your career and what that might look like down the road.  Do you want to just ‘walk-away’ and do something else?  Or maybe you want to spend more time doing what you want and less time doing what you don’t (working!).  Are you open to part-time employment?  Perhaps a career change would be in store.  The current trend is showing that more and more people retire from their careers early to pursue a new, less stressful career.  Is there something that you would like to pursue as a ‘second career’ in the future?  

The last idea I have for your ‘future-plans date-night' conversation is to make a list of the 5 most important things to each of you.  Each of you should create your own list and then talk about your answers.   You may want to list them in order of importance or you may just brainstorm them onto the paper - either way, make sure you talk about them.  The goal is to understand not only the ‘what’ on the list, but the ‘why.’ Spend some time thinking about how this list of important items may play a role in retirement.

The conversation about your retirement together doesn’t have to be a rigid, formal dialog in the presence of a financial planner.  In fact, it’s probably better off if it isn’t!  Do yourself a favor – call up your favorite restaurant and get a reservation.   Hire a babysitter if needed and escape for a few hours to 10-20-30 years from now and start painting a picture of your life.  It will probably be one of the best date nights you’ve had in a while 😊

Mike Pruitt, CFP®,RICP®