Understanding 401K: How it works and why it matters
What is the 401K Plan? Key benefits and ways to maximize savings.
In many ways, retiring as a married couple is easier than retiring as a single person. Some people split the costs, spend time, and rely on them for care when needed.
On the other hand, retiring as a couple means that you have to consider each other’s needs. So it’s important to plan that milestone together. Here are some important moves.
1. Decide what lifestyle you want
The lifestyle you want to lead when you retire can help you decide what money you need. It is important to have those conversations before you leave to get on the same page.
While your spouse is hoping to strengthen with travel, you may be happy with a modest lifestyle. Your vision may be much lower than your spouse, so you may need to compromise.
It is also important to talk about how you spend your days. If your spouse assumes you will move into a senior community and participate in group activities, then you are not so social, so that’s a problem you want to move on. And if you think working part-time is a good idea, then your spouse doesn’t want either of you to be connected to work, so that’s something to argue too.
2. Understand when you’re going to assert social security
There is a good chance that Social Security will be an important source of income for you when you retire. Therefore, it is important to work with your spouse to understand your filing strategy.
What you want to do is for your two higher earners to delay Social Security past the full retirement age for greater monthly benefits, while lower workers will seek benefits earlier. This way you’ll get some income, but you’re hooking a great boost with your bigger check.
There are other strategies that you can use. The key is to adjust the numbers and do them.
In doing so, beware of the survivors’ benefits as well. If low earners are expected to live longer than higher earners for years, that is another reason why high earners consider delayed social security claims.
3. Prioritize saving while still working
If you end up getting a large portion of your retirement income from Social Security, you may be most inflexible in what you can use. A better bet is to make sure you retire a nice sized nest egg.
As retirement approaches, we look at your savings and together decide whether you are satisfied with the amount you have accumulated. If the answer is no, you can spend the end of your career prioritizing your 401(k) or IRA contributions.
Resignation is something you and your spouse should approach as a team. Ultimately, tickets to a rewarding retirement could be summed up in good communication and open discussion. Give those talks and calculate all the required numbers together so you can head to your fourth grade with more confidence.
Motley Fools have a disclosure policy.
The Motley Fool is a partner at USA Today, providing financial news, analysis and commentary designed to help people control their financial lives. The content is produced independently of USA Today.
Most retirees with the $23,760 Social Security Bonus are completely overlooked
A miscellaneous fool’s offer: If you’re like most Americans, you’re a few years (or even more) behind your retirement savings. But it’s not well known “The Secret of Social Security”It will help you to ensure a boost in your retirement income.
One easy trick can pay you an additional $23,760…Every year! Once we learn how to maximize Social Security benefits, we can retire with confidence in the peace of mind we want. participateStock AdvisorFor more information about these strategies, see
See “Social Security Secrets”»
