Retirement planning for couples

Why ‘ours’ still needs two plans

 

Each partner requires a separate plan to protect against risks that could quietly undermine their shared retirement dreams.  This is about ensuring that both partners are secure, together and individually, no matter what the future holds.

 

By Wouter Fourie (CFP®)
Director of Ascor® Independent Wealth Management.
Wouter Fourie is Past winner of the FPI Financial Planner of the Year competition and the co-author of The Ultimate Guide to Retirement in South Africa

 

Many couples think of retirement planning as a joint effort, and rightly so. After all, you share a home, a lifestyle, and often your financial goals. But here’s the catch: even when you’re planning together, each partner still needs a separate retirement plan.

This isn’t about financial independence in marriage; it’s about protecting both partners from risks that can quietly undermine a shared retirement dream.

 

Why one plan isn’t enough

Couples often make retirement assumptions based on averages: same retirement age, same life expectancy, same investment needs. In reality, differences in age, health, earnings, and work history mean your needs can vary dramatically.

 

Some of the key differences include:

Retirement age: One partner may retire earlier (by choice or necessity).

Longevity: Women often live longer than men, which means one spouse may spend many years in retirement alone.

Income sources: Pensions, investments, or business assets may be in one partner’s name.

Healthcare: Medical needs and costs may be significantly higher for one partner.

If your plan doesn’t take these into account, you risk shortfalls for the surviving partner, even if the combined household plan looks solid today.

 

Common risks for couples

The survivor’s income gap

If one partner passes away, certain income streams (like some pensions or annuities) may reduce or stop altogether. This can create a sudden income gap for the surviving spouse.

Unbalanced asset ownership

If most investments are in one partner’s name, accessing them could be delayed due to estate processes.

Different risk tolerances

One partner might prefer a more conservative investment approach, while the other is comfortable with more growth exposure. Without alignment, this can cause stress and suboptimal returns.

Healthcare and long-term care costs

If one spouse develops chronic health issues, costs can escalate, affecting the retirement lifestyle of both.

 

How to plan effectively as a couple

Model separate and joint scenarios: Run retirement income projections for each partner individually as well as jointly. This helps identify where risks may arise if one partner lives significantly longer.

Diversify income sources: Ensure both partners have access to independent income streams where possible, whether from living annuities, discretionary investments, or rental income.

Align on lifestyle goals: Discuss how you both envision retirement. One may want to travel extensively, while the other may prefer a quieter lifestyle. Your plan needs to accommodate both.

Plan for the surviving spouse: Review beneficiary nominations, joint accounts, and estate structures to ensure access to funds without unnecessary delays.

 

The role of independent advice

This type of planning requires more than simple projections, it calls for nuanced, scenario-based modelling and the ability to balance joint priorities with individual needs.

At Ascor®, for instance, we are fully independent, meaning we are not tied to any product provider. Our sole focus is on creating a plan that works for both of you, across different possible futures.

 

Key questions for couples to discuss

What happens if one of us retires earlier?

How will we manage a significant healthcare cost for one partner?

Will the surviving spouse’s income be enough if one of us passes away?

Do we each have access to liquid assets in our own name?

Are our wills, trusts, and beneficiary nominations up to date?

 

In closing

Retirement planning for couples is about more than pooling resources; it’s about ensuring that both partners are secure, together and individually, no matter what the future holds.

The Ultimate Guide to Retirement in South Africa offers more on how couples can align their plans while protecting their individual needs.

 

This article first appeared on moneyweb.co.za at https://www.moneyweb.co.za/financial-advisor-views/retirement-planning-for-couples-why-ours-still-needs-two-plans/

 

Read more about Ascor® Retirement Planning Services

 

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