Marriage is the onset of a beautiful journey of togetherness and new experiences. However, it also brings in several new responsibilities, most requiring ample finances to fulfil. In the initial years of marriage, indulging in trips and luxuries might not put a strain on your finances. But as the family unit grows and couples near their middle age, the question about retirement planning arises.
 

Retirement is a stage of life where couples aim to lead a peaceful and stress-free retired life. But to do that, one needs to have a clear financial plan. Read on to know more about how married couples can plan their retirement together.
 

How can couples plan for retirement?

Retirement planning for married couples is an integral part of a happy and stable life in the future. Instead of leaving it up to the last few years before your retirement, you should plan early on to reap maximum benefits. Before executing any financial strategies such as savings or investing, it is crucial to have the retirement talk. Discussing your individual goals for the future will give you a clear idea of how much finances you both need.
 

Factor in the differences between your present and future needs such as:
 

• Day-to-day expenses, utility costs, bills
• The presence of any health conditions
• The age difference between each other (as the older spouse might need to dip into the retirement funds earlier)
• The aims, goals, and plans
• Any hobbies or passions you both might want to pursue
• Any trips or family vacations
• Any debts or liabilities that either of you needs to pay off
• Healthcare expenses, health insurance, life insurance
• Any dependents and their financial responsibilities

When you arrive at an approximate figure, multiply it with the inflation rate at your supposed year of retirement. This is the closest amount you will need to lead a comfortable retired life. After you factor in your requirements and get a rough number, you can decide how much both of you can set aside for a retirement plan from your incomes and side earnings.
 

Based on the figure you can set aside, you can then move on to decide what way of wealth creation you would like to adopt – either savings or investing.
 

Should married couples have joint retirement accounts?

Having a joint retirement account can be very convenient for couples. It can also inculcate the habit of disciplined savings and motivate you to find ways to save. However, only having a joint retirement account might not suffice in the long run.

As savings are a way to park your money and not multiply it (unless you open a joint retirement fixed deposit or recurring deposit), they are not ideal for carrying you through your golden years with ease. Moreover, even if any bank accounts, single or joint, have the potential to multiply your money, the interest rates (that are around 6% to 7%) at which they do so are not enough.

Instead of having joint retirement accounts, you can consider investing in a joint (or single) annuity pension plan or any other retirement plan.  An immediate or deferred annuity plan is one of the apt ways to secure your golden years. Such a retirement plan provides a fixed stream of income right from the day of commencement of the annuity plan up to your or your spouse’s lifetime. 

This income is an annuity is regular and paid every month, quarter, half-year, or year to the buyer or the nominated individual under the annuity plan (also known as an annuitant.) You can choose from an Immediate and Deferred Annuity Plan.
 

Tata AIA Life Insurance offers multiple annuity annuioptions:
 

• Immediate Life Annuity:
  
  Under this, the annuitant receives payments up to his/ her lifetime as soon as the annuity plan commences. In case of his/ her demise, the spouse receives the annuity payments.
  
  
• Immediate Life Annuity with Return of Purchase¹ Price:
  
  Under this, the annuitant receives payments up to his/ her lifetime as soon as the annuity plan begins. In case of his/ her demise, the spouse receives the annuity payments. On the death of both annuitants, an appointed nominee gets the total purchase price paid by the annuitant while buying the annuity plan as a death benefit.
  
  
• Deferred Life Annuity with Return of Purchase¹ Price:
  
  Under this, the annuitant receives payments up to his/ her lifetime after a delayed period (anywhere between 1 and 10 years as per his/ her preference).  In case of his/ her demise, the spouse receives the annuity payments. Upon the death of both annuitants, their nominee gets the total purchase price paid by the annuitant while availing of the plan as a death benefit.

 

How much should a married couple put away for retirement?
 

Financial experts advise that a married couple should at least put away 20% of their income into savings or investments. However, as you know, savings are not enough to support you in the long run. If you even put 20% of your income in a retirement plan or an annuity pension plan, you will get more profitable returns.
 

To get an accurate idea of much regular post-retirement income you will need, you can use a retirement calculator for married couples.
 

To conclude:
 

The early bird catches the worm – in the same way, early retirement planning will help you secure a corpus sufficient for you and your spouse’s future. And no better than an annuity plan to maintain stability in the later stages of your life.

L&C/Advt/2023/Feb/0324