Will your retirement dreams conflict?

FCW's Friday Financials column looks at how couples can clarify their vision of retirement and consider the financial needs

Take a husband and wife who each have had highly successful careers, mix them together in a joint retirement stretching out for many years, and you have...trouble?

Highly successful career people have enough individual challenges when facing retirement. For many, the problem often is not whether they have enough money for retirement. Rather, they struggle with the loss of identity associated with work, the slower pace of retirement, and the challenge of filling retirement hours with something that provides the emotional rewards they received at work.

Multiply those challenges by two, and conflicts can arise.

One of the first steps is for each of you to clarify your vision of retirement. Separately, write them down on paper and compare notes.

When does each of you want to retire? It's common among career-oriented people for one to want to work longer than the other one. Does one want to travel a lot while the other wants to stay home? Do both of you need a home office? How do you envision spending a typical day in retirement? Does that day include working part time or doing volunteer work? Do you each have different visions of where you want to retire?

When visions clearly conflict, discuss compromises and ways each may accommodate the other. For couples used to holding positions of command at work, clashes over how to spend their retirement years together can result in unpleasant turf wars. Be prepared to seek outside help, perhaps with a financial planner or even a family therapist.

Once you thoroughly explore your visions of retirement and come to some consensus about what will work and what won't — only then do you look at the financial implications. Financial restraints may require you to modify your visions of retirement. A great deal of travel may strain even a comfortable retirement budget. Or, for example, if each of you wants a home office, it may require building an addition, renting an outside office or even moving to a new home.

Another key to a successful transition into retirement is to be attuned to the stress your partner may be feeling from retirement. For couples who can't wait to get to retirement, this may seem like a silly issue: What stress in retirement? Yet for people used to working in high-powered, emotionally and intellectually stimulating jobs, retirement can be stressful because of the lack of those psychological rewards. Even people who haven't led stimulating careers may find that they miss work more than they realized they would. Boredom can be stressful.

For high-powered career people, it is especially important to consider a transition into retirement. Several options are available here. Your current employer may allow a phased retirement involving decreasing work hours (though this might reduce benefits in a defined-benefit plan), or you can find new part-time work. Consider consulting or teaching. Retired small-business owners often find it rewarding to advise new business owners. You might even run your own business as long as it remains only a part-time commitment. Such transitions enable you and your partner to "practice" various retirement scenarios in preparation for the time you both leave the workforce permanently.

Another way to smooth out retirement is for each of you to maintain separate accounts, or retirement "slush" funds. This is especially important if both of you have different interests and pursuits during retirement. You'll need to carefully budget those slush funds. Start with a household budget that meets your basic living expenses along with an emergency cushion. Determine if your retirement accounts and other sources of retirement income will meet those basic needs, and pinpoint potential problem areas, such as lack of long-term care insurance. Then calculate whether you can withdraw additional funds from your nest egg for your separate retirement accounts without jeopardizing your core budget.

As these ideas suggest, the key to a successful, compatible retirement is planning — preferably well before retirement begins. Working these issues out in advance with a certified financial planner will go a long way to ensuring that both of you will find retirement as rewarding as your working years.

Zall, Bureaucratus columnist and a retired federal employee, is a freelance writer based in Silver Spring, Md. He specializes in taxes, investing, business and government workplace issues. He is a certified internal auditor and a registered investment adviser. He can be reached at miltzall@starpower.net.

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