The Age Gap Retirement

More people are marrying partners far younger than them. That makes for more complicated financial planning.


It was once a given that spouses would retire at around the same time. Couples would then set off for months of travel or could at least spend more time together. Having two people retire at the same time also simplified financial planning – advisors could factor in two pensions, tax plan around the withdrawals of two RRSPs and more.

Now, though, many people are marrying spouses who are much younger than them. One might be nearly ready for retirement while the other still has two decades to go. That can complicate a couple’s financial picture, says Jane Olshewski, Manager of Financial Planning Programs for Investors Group. “There are so many more things to consider,” she says.

For instance, they’ll need help figuring out how much to save for their respective retirements. If they choose to stop working at the same time, they will need a considerable nest egg to fund the younger spouses’ golden years. If one spouse keeps working, the one who retires may not need to withdraw as much from their RRSP or RRIF, she says.

Children from previous marriages can also add complications to one’s retirement. If you don’t use all your savings and want your children to have the rest, then you may need to do some more intensive estate planning to ensure you’re not disinheriting your children by leaving your assets to your younger spouse, she says.

Those are just a couple of retirement planning dilemmas facing couples with significant age gaps, but there are others. Calgary’s Rachel Johnson, 45 and James Matias, 66 have six children between them – three from Matias’ first marriage and three of their own. They’re also providing support and caregiving for his elderly parents and the couple will likely need to do the same for her parents in the years to come.

Coming up with a plan involves being honest with your partner. That’s always true, but it’s especially important when couples are different ages.

As well, because Matias is so much older, Johnson may be required to provide support and care for an aging husband down the road. “I’ll do whatever is necessary to keep us together,” says Johnson.

In addition to financial issues, age diverse couples have decisions to make about life planning issues, too. “Should couples in this situation retire at the same time?” asks Olshewski. “A younger spouse may want to retire and spend some time with the older spouse and do all the things that couples enjoy in retirement – like travelling, doing hobbies together and so on – while both are still healthy.  But the younger spouse may feel they have more to accomplish in their career and aren’t ready for retirement at an earlier age.”

Coming up with a plan involves being honest with your partner. That’s always true, but it’s especially important when couples are different ages. Talk about how one will spend retirement while the other works, if the younger spouse would consider cutting back – or maybe the older one works a little longer so they can enjoy retirement together.

“Each couple must look at their specific situation and decide on a life plan that works for them,” says Olshewski. “And be supported by a financial plan that will get them where they want to go – together.”

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