How to Talk to Your Partner About Retirement

Few topics are more likely to cause conflict in a relationship than the discussion of money. It’s difficult enough to agree on everyday bills and spending priorities, before you even start to think about future planning. Many couples become so entrenched in the challenges of daily life that planning for retirement falls down the priority list.

But if you are committed to a future together, you need to start thinking about what that future will look like.

Align Your Goals
What does retirement mean to you? Would you like to finish work at age 60 and never look back? Do you see yourself running the company into your 70s and beyond? Or would a more gradual path to retirement suit you, perhaps supplemented with part-time work, or that creative hobby that you have always wanted to devote more time to?

Consider how you would like to spend your spare time. Do you envisage an active retirement, with travel, socialising, and new interests? Maybe you have family nearby and would like to be around more to help out. Or perhaps after decades of work, you are looking forward to a quiet life of puzzles, pets, and pottering in the garden.

You might be very clear on your own retirement vision, but does your partner feel the same? It’s important to talk through your goals, plans, and aspirations to make sure you are both on the same page.

Respect Different Priorities
When you approach this conversation, you might find that your partner has a completely different idea of retirement. If you want to retire early and travel, while they plan to be scaling new heights in the corporate world, the discussion might be a difficult one. We often think of the future as being someone else’s problem, and it’s easy to postpone these awkward conversations indefinitely.

The following tips might help you reach a compromise:

• Explain why your goals are important to you. We don’t make plans out of thin air, so understanding your thought process can help your partner empathise.
• Try to do the same for your partner when they explain their own goals and aspirations.
• Consider how your plans affect each other. You don’t have to retire at the same time, but if one partner is working and the other is living a life of leisure, this can lead to resentment.
• Think about ways to compromise. Retirement doesn’t have to be all or nothing, and you can ease into it gradually.
• Remember, you can both still live your own lives. If your partner doesn’t share your interests, why not find a group of friends who do? If you have parts of your lives which are separate, you will have more interesting things to talk about when you are together.

Focus on the Future
Once you have decided how you want to approach retirement, it’s time to start planning. You will need to think about:

• The timeline of your retirement.
• How much your desired lifestyle is likely to cost. You probably won’t have a mortgage and can save on work-related costs. However, you might want to spend more on leisure.
• Don’t forget to account for ad hoc expenditure such as repairs, replacing the car, and any gifts you want to make.
• The income you will have coming in. This could include the State Pension, occupational and private pensions, property rental, or investment income. If you have savings and investments, you might be able to supplement your income with capital withdrawals.
• How you both feel about risk. You may want to invest speculatively to try and boost growth with the aim of retiring early. On the other hand, your partner might feel more comfortable if they have a defined benefit pension to rely on. A mix and match approach can work well.

Work Out Your Starting Point
The next step is to work out where you are now, and how to get where you want to be.

Gather the statements from your existing pensions and investments. If you have multiple different plans, it can be worth seeking advice to simplify your situation. If you hold all of your investments on one platform, you can easily log in and keep track of your financial situation.

You should also check you are on track to receive a full State Pension. You can check this online here. You build up a State Pension either by paying National Insurance contributions, or by accumulating credits if you are in receipt of certain benefits. If neither of these apply in a given tax year, you can make voluntary contributions to maintain your State Pension record.

Once you know your current situation, there are any number of online calculators that can help you decide how much you need to contribute, and for how long, to achieve your retirement goals. You can create a simple cashflow model in a spreadsheet or you can work with a financial planner to build a more sophisticated projection.

It’s not unusual for one partner to be more interested in financial matters than the other. But it’s important for you both to be involved and understand the situation.

Get an Objective View
Between differing goals and priorities, and the complexity of pensions and investing, it can sometimes be a good idea to get a second opinion. A financial planner can help by:

• Helping you clarify your goals, taking into account different priorities.
• Contacting your pension and investment providers to gather all the necessary information.
• Creating a cashflow plan which lays out a roadmap to your retirement.
• Recommending ways to improve your financial situation, for example by optimising pension contributions, consolidating your plans, or reducing charges on your investments.
• Explaining the complexities around tax and investment planning.
• Arranging regular meetings, coaching you, and holding you accountable for achieving your goals.

While you might face some challenges in the early stages, your financial plan will be stronger if you tackle it together.

Please don’t hesitate to contact a member of the team to find out more about retirement planning.