Retirement is something I’ve increasingly been thinking about. My husband and I have set a goal of retiring once our youngest child finishes college in about eight years.
We’ve talked about whether we might move. We know we eventually want to live close to our children when they start their own families. We want to do full-time ministry work helping people with their financial problems.
If you’re married, I believe you should adopt the “two ‘yeses’ and one ‘no’ ” rule, which means you both have to agree to whatever major decisions you make, from buying a dining-room table to your retirement choices.
Without a mechanism to negotiate and come to a compromise, you’ll end up in the situation in which one wife has found herself.
“My husband is facing a medical issue that will probably mean the loss of his current job,” the woman wrote. “He just told me that he’s planning to retire after his surgery. He has $30,000 in savings, and he’s 56. I’m 43 and had worked out a financial plan based on both of us working until our full retirement ages. Now, I’m stuck trying to pay off a mortgage and make necessary home improvements on one income. Our budget works out on one income as long as we don’t have to fix the roof. Rent would cost more than our mortgage. This is an awfully long time for me to be footing all the bills. I’m already working a side job. Any suggestions?”
The woman said she feels she’s being held hostage to her husband’s retirement plans.
I received the question during a recent online discussion in which my guest was Carrie Schwab-Pomerantz, author of “The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions.” We didn’t get to the question during the chat, but here’s our take on the situation.
Before even addressing the retirement issue, Schwab-Pomerantz recommends that the husband check whether he has any legal protections against losing his job because of the surgery. He should find out if he’s covered by the Family and Medical Leave Act. The federal law entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons. Eligible employees may take up to 12 weeks of leave in a 12-month period.
If the husband can’t work because of a health issue, however, he needs to determine whether he’s eligible for Social Security disability insurance. If he has a private disability insurance policy, he needs to see if he can file a claim, Schwab-Pomerantz said.
“While your husband sounds like he has a serious health issue now, he should think about his recovery and whether he’ll eventually be healthy enough to find another line of work — perhaps something part time or less physically demanding,” Schwab-Pomerantz said. “Having him bring in some amount of income would be tremendously helpful to your situation.”
If your spouse can’t work and isn’t eligible for financial assistance, you’ll need to look carefully at your new cash-flow situation, Schwab-Pomerantz points out.
“You’re probably going to have to make some significant changes to your lifestyle,” she said.
Ask yourself some tough questions: Which nonessentials can you cut back? Are you sure it is more expensive to rent when you factor in property taxes and maintenance? Can you consider minimizing your housing costs by moving to a less-expensive neighborhood or taking in a renter?
Next, look at the income side of your balance sheet. At age 56, the husband is six years away from being able to collect Social Security. If he elects to take the benefit early, his retirement payments will be reduced by 28 percent compared with waiting until his full retirement age, according to a Social Security table, which you can find at www.ssa.gov by searching for “Benefit Reduction for Early Retirement.”
These are just some of the important issues to factor into the decision to retire. “Unfortunately, there are no magic answers,” Schwab-Pomerantz said.
I recommend that couples read “The Couple’s Retirement Puzzle: 10 Must-Have Conversations for Transitioning to the Second Half of Life” by Roberta K. Taylor and Dorian Mintzer.
If you’re married, you can’t unilaterally decide to retire if you have a choice. It’s unfair to your spouse.
“It is naïve to think that decision-making can be based solely on what you want,” Taylor and Mintzer write. “The realities of living need to be taken into consideration, particularly in an economy where people often have not been able to save adequately for retirement. . . . Ultimately, your goal is to come up with a plan you both can agree to.”
Write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or email@example.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.