Spouses need to coordinate their retirement decisions

Value Judgments

Your Money

October 10, 2004|By JANET KIDD STEWART

HE'S READY to retire, she's not. The financial adviser is smiling, the marriage counselor is not.

Couples do themselves a big financial favor by keeping different timetables for retirement, financial advisers say. But they face a barrage of relationship obstacles, from painful balance-of-power shifts to starkly different ideas about how lavishly they want to live later in life.

Over 38 years of marriage, Chris and Bob Brown faced plenty of challenges. Still, when Bob, a commercial airline pilot, reached mandatory retirement three years ago at age 60, he turned in a huge piece of his identity with his wings.

"I really missed the airline - the flying, the interactions with the crew, all of it," said the San Diego-area resident. "But when your time comes, there's nothing you can do about it."

Meanwhile, Chris Brown was just hitting her peak earning years as a health care executive. At 59, she's a corporate strategic planner for Scripps Health, a San Diego hospital and health care network recently cited by the AARP as a standout employer for older workers. With plenty of economic incentives and no mandatory retirement age, she had no desire to pack it in and hit the golf course.

"I need to keep my mind going," she said. "That's what concerns me most about retirement, and I don't see the community using volunteers at high levels."

Bob Brown found a second career within two months of retiring. He works full time for the Federal Aviation Administration, testing and evaluating commercial pilots.

"I know where the [procedural] holes are. When pilots find out I used to be one of them, I get their respect," said the former pilot, who retired two months before the 2001 terrorist attacks. With a sense that he is helping to ensure the industry's security measures, he has regained some of the passion he once had for his flying career.

That's also a far better money move, considering today's longer life expectancies, said Larry Ayers, a Greenville, S.C., financial planner who specializes in retirement issues.

If one spouse does retire early, and the other can pick up health insurance and regular expenses until full Social Security payments kick in, the couple will do far better financially over the long haul, Ayers said.

"I worry about people taking early retirement," he said. "I have a client who is retiring at 57 and will start drawing down Social Security at 62, but so much can happen." His client could start a second career, enabling him to delay taking Social Security, for example.

After spending only a brief time with one of them in retirement, the Browns have decided to coordinate their next retirement decision.

About half of retired couples leave the labor force within two years of each other, according to a study by Richard W. Johnson for the Center for Retirement Research at Boston College, published in July. More women working longer today could mitigate the projected Social Security and retirement savings shortfall, Johnson argues.

"It's important for couples to think about joint retirement income and finding the age that maximizes benefits for both husband and wife," he said.

Health issues are another reason for spouses not to quit their jobs too soon, experts said. The median share of before-tax income of couples over age 65 that goes to health care will more than double, to 27 percent, between 2000 and 2030, according to separate research for a forthcoming study by Johnson and Rudolph Penner.

The secret to keeping the Browns' marriage strong through all these issues was not to take on too much change.

"We've always had a rhythm to our marriage," Chris Brown said. "I was used to his being gone two to three nights a week and having my own time. Then when he retired, I put this expectation on myself that I needed to stay home, and I began to resent that.

"Finally, one night I told him I was going out after work, and he said, `Great!'"

E-mail Janet Kidd Stewart at yourmoney@tribune.com.

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