For most couples, retirement is a bright spot gleaming on the horizon. Perhaps you have visions of jet-setting together around the globe, starting a passion project you’ve been planning, or just enjoying a chance to reconnect with loved ones. Whatever your dreams for retirement, you should give some strategic thought to what happens when you and/or your partner reach that milestone as you come closer to that point.
Unfortunately, many misconceptions about retirement exist, from how you will spend your time to how long this phase of your life will last. In this article, I will tackle three of the biggest retirement myths that women often face – and offer some practical planning advice along the way.
Myth #1: The Spouse Safety Net
The male to female population breakdown in the United States remains pretty even… until you hit age 65. In the age range of 65-84, the number of men compared to women takes a sharp downward turn, and the ratio of men continues to decrease from there.
But what does that have to do with your retirement? Quite a bit, actually. If your retirement plans involve the benefits from your spouse’s pension or other retirement assets, those resources may change if your partner passes before you. If you have no retirement savings of your own, it is imperative that you pay close attention to your spouse’s policies for survivors. Some policies may decrease benefits by as much as 50 percent upon the death of the primary policyholder. Other plans – such as the Survivor Benefit Plan (SBP), Reserve Component Survivor Benefit Plan (RC-SBP), and Retired Serviceman’s Family Protection Plan (RSFPP) – require special enrollment from widows and beneficiaries if they intend to continue to receive benefits.
Even if you worked as many years as your husband, your retirement benefits and pension are likely to be less than his. Since women earn an average of $0.82 for every $1 earned by a man, women are already at a major disadvantage in earnings. The gap can be even more significant for women of color. That kind of discrepancy in earnings can build up to a major difference in savings between women and men, and it’s another reason to familiarize yourself with your spouse’s policies and proactively manage any potential gaps in retirement income.
SEE ALSO: Lifestyle and Retirement: Lifestyle Impact on Your Finances
Myth #2: The 20-Year Rule
As I mentioned earlier, the data shows that women tend to outlive men. For that reason, their retirement planning should also take a longer lifespan into account. According to a report released by the U.S. Census Bureau, women who reach age 65 are likely to live another 21.2 years on average – and plenty of women will live longer than that. When considering retirement savings, you also need to plan for the possibility that some of those years may likely not be your healthiest.
Did you know women make up approximately 70 percent of nursing home residents and more than 75 percent of assisted living community residents? Women also tend to need long-term care for an average of 3.7 years, which is longer than the average 2.2 years men require it. Long-term care is typically focused on activities of daily living (ADL), such as bathing, dressing, eating, and other basic needs – and Medicare does not cover ADL services. Since the chances are greater that women will need this kind of custodial care and use it longer, they need to budget for it in their retirement planning.
MYTH #3: Reconnecting During Retirement
If you are married, you may have been looking forward to retirement as an opportunity to spend more time with your spouse. While retirement will offer plenty of time together, it can end up being too much for some couples. It’s especially difficult for those who haven’t communicated with each other about what they want to do, accomplish, and focus on during this phase of their lives.
Just as you and your spouse had different roles and responsibilities before retirement, you may find yourselves pursuing your interests individually rather than as a team. For instance, if you are dedicated to volunteering at community organizations but your husband would rather spend most days golfing, it may prove challenging to find the meaningful together time you envisioned.
Fortunately, a key skill you likely developed over time as a couple remains critical during retirement: strong communication. Sitting down with your spouse and sharing your hopes for the future is vital to the retirement planning process because this phase of your life is about so much more than just the financial aspect.
Final Thoughts
Don’t let your retirement dreams become derailed by myths that continue to persist. When you have a strong understanding of both the financial and emotional realities of this phase of life, you are far more likely to enjoy it. Don’t wait to discuss what you want for your retirement until it arrives. Plan ahead, and you and your spouse will be better prepared for a successful transition as retirees.
