These days, marriage and other committed relationships come in all flavors — traditional man and woman of similar ages, people of widely differing ages, same-sex couples.
Emmanuel Macron the new president of France, has a wife 24 years his senior, reversing the usual May-December pattern.
Regardless of whether it’s an older man and younger woman or the reverse — or partners of the same sex but far different ages — a big age gap requires special attention when planning for retirement.
“Retirement planning for spouses at different ages can be a tricky transition with momentous financial and emotional implications,” says Dan Keady, senior director in the Advice and Planning Strategy group at TIAA, the financial services organization known for serving academics.
The basic tips for May-December relationships are the same as for everyone: trim expenses to save as much as possible, have a healthy investment in stocks for long-term growth, try to retire free of debt, delay retirement as long as possible to allow investments to grow and reduce the number of retirement years to fund, start planning well before retirement arrives.
But people of widely differing ages have some extra considerations as well. If one partner is 20 or more years younger, retirement funding may have to last 20 years longer than if the two were the same age. There’s a bigger chance the couple will face a long period of ill health.
Then there are lifestyle issues: Will the older partner keep working until the younger one retires? If not, how will the older one fill the days?
“One spouse may be retired and ready to travel while the other is still bound to his or her career,” Keady says. “On the other hand, there are potential benefits that couples might experience when retiring at different ages, with one spouse continuing to earn income at the peak of his or her earning years, for example.”
“In terms of if one spouse keeps working or not, I’ve seen it both ways,” says Grant W. Moore, an advisor with Savant Capital Management of Rockford, Illinois. “Often, the younger spouse decides to stop working so that they can enjoy time together, travel, and pursue hobbies.” But that requires a solid financial foundation, as it may be hard to get back into the workforce if money becomes tight, he says.
“With my clients that are couples of widely varying ages, one of the biggest challenges is when the older spouse should retire,” says Garrett Ball, president of Secure Medicare Solutions, a Medicare and insurance advisor in Clemmons, North Carolina. “One of the biggest drivers for this is that retirement often means that both spouses will lose health insurance coverage. In many instances, I’ve found that the older spouse has to work longer, sometimes significantly so, in order for the younger spouse to have decent and reasonably priced health insurance coverage through an employer.”
It’s important to have a financial discussion about your future.
“Most of the time both spouses will retire together,” says Shane Eighme partner at Shane & Shane Financial in Dublin, Ohio. “This makes it really expensive when one spouse is significantly younger, especially if that younger spouse is a woman. Women have a longer lifespan and because she will be retiring at a young age, she will need a lot more money.”
Often, the older partner has children from a previous relationship, requiring careful estate planning to assure assets go to the desired recipients, planners say.
“Estate planning can become complicated if one spouse is close in age to the other spouse’s children from a previous marriage,” Eighme says. “If the husband is 65 years old, his wife is 52 and his kids are in their 40s, issues may arise because the kids are now second chair to the wife. It is important to bring everyone together for estate planning to dictate who gets what when that older spouse passes away.”
It can also be tricky for a May-December couple to decide when to start drawing Social Security, since the couple may not know how much money will be needed years down the road, Ball says.
Many experts suggest such a couple follow the same advice given couples of similar ages: postpone the start of Social Security for as long as possible, as the benefit can be substantially larger if you start at 70 rather than 62 or 66. With the younger person still earning income, delaying Social Security might be easier.
“This could have a big impact since the higher Social Security benefit would ultimately transfer to the younger spouse at the older spouse’s death,” Moore says.
If the older partner has a traditional pension, it may be wise to select the payout option that provides 100 percent of the benefit to the surviving spouse, Moore adds, even though the monthly income would be smaller for both partners than if the income ended at the first spouse’s death.
Another issue: the younger spouse may have to take over if the older one starts losing the ability to handle finances.
“Even if partners are the same age, cognitive decline doesn’t discriminate by age, so it’s really something every aging couple should be aware of,” says Liz Loewy former chief of the Elder Abuse Unit in the Manhattan District attorney’s office, and now general counsel at EverSafe, a financial technology company that helps safeguard seniors and their finances from fraud. “Being diligent about monitoring finances, and enlisting the help of technology and trusted advocates, is one way seniors can keep their retirement nest egg intact.”
Rather than leave finances to one partner, it’s important, experts say, for both partners to keep on top of the finances in case one falters.
Obviously, many financial and lifestyle decisions are different if two partners are widely different in age, and the best strategy can vary depending not only on the couple’s ages but their finances, family situations and priorities.
The most important move, planners say: start thinking about it early, enlisting professionals if you’re not confident you can plan on your own.
Jeff Brown spent nearly 40 years as a newspaper reporter, columnist and editor, including 20 years writing about investing, personal finance, the economy and financial markets. He spent 20 years at The Philadelphia Inquirer and has been freelancing since 2007.