When the husband of a friend recently announced his plan to take early retirement, he'd just turned 60 and been offered a good package, his wife told me she was worried. Anna was still working hard and planned to put in several more years before leaving the work force.
"Here's my fear," she told me. "I'm going to be immersed in my usual 9-to-5 crush, trying to fit everything in, and Max will be operating at a completely different pace, with lots of leisure time as well as time to explore new interests. To be completely honest, I'm a bit jealous; however, I'm just not ready to give up my career. I'm concerned that this new difference in our lifestyles will spill over into other aspects of our lives and affect how we relate to each other."
I found Anna's concern extremely compelling for two reasons. First because retirement is a huge life transition - with financial implications obviously - but with all kinds of interpersonal ones as well. I knew enough about Max and Anna to know that running out of money wasn't the issue. But when one spouse retires and the other continues to work, other interesting issues that connect the personal and the financial can arise. For example, how do the financial dynamics of the partnership change when one person works and the other doesn't? How should the division of labor around the household change? In other words, how should a couple renegotiate these and other terms of their day-to-day lives? It's clear that Max and Anna aren't alone. The baby boomer generation started turning 60 last year, which means that millions of boomers are retiring every year. So what should Max and Anna do? What would you do if you're in a similar situation? My advice is to talk through several issues before either partner makes this life-changing decision:
- Income: For Max and Anna, income won't change dramatically, given his ample pension and the retirement assets he's amassed over his career. They'll continue to fund their life together as they've done before.
If the retiring spouse will experience a significant drop in income, the couple might want to rethink how they bear this shared financial burden. The key in that case is to avoid a feeling of resentment by the working spouse, who might feel bitter about having to work while his or her partner enjoys a life of leisure.
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