As if navigating retirement weren’t enough of a shock to the system, I want to explore the follies of retiring separately. What happens when two halves of a dual-income couple decide to take their freedom and run with it at different times? It can be messy. We don’t have a lot of financial planning data that considers two equal partners who retire. This generation is experiencing something brand new. But the metrics are real:
According to an Ameriprise Financial 2024 Report:
Only 11% of American couples surveyed actually retired at the same time;
62% Retired more than a year apart;
Among pre-retirees, 26% plan to retire together, while 39% expect to retire more than a year apart.
The traditional concept of retirement involves a series of financial decisions and steps resulting in living on income from savings and investments versus employment. When someone takes those steps, benefits kick in (Medicare/Social Security) and cash flow sources change (distributions, interest/dividends, passive income, partner cash flow). Navigating these changes is difficult, emotionally and practically. You know yourselves best. Have the discussion with your partner, and maybe with a therapist, if necessary.
Time
One of the biggest hurdles to overcome in retirement is the move from a highly scheduled day/week to unscheduled or flexible time. The working partner is still on a structured schedule, while the retired partner is free to explore his/her own routine until a new one is established. Sometimes the assumption is that the retired spouse will become a service provider to the working spouse. But don’t assume, because your partner is retired, that they can (or are willing to) run all your errands for you. Their retirement plans may involve a full schedule of their own … or they may simply choose freedom during their day over service to you. The retiring partner has earned the right to design how they’ll use their 168 hours per week. Bedtime and wake-up times may change. This may require some negotiation. Whether it’s TV watching, writing, or going to the pool when a swim lane is available, everything becomes newly subject to reconsideration, discussion, and compromise.
Sometimes roles become more delineated. Moving from “nobody has time to make dinner” to “someone chooses to make a meal” is a good example. Rather than do one big shopping trip per week, the retired partner may find they have the luxury of attending multiple farmers’ markets or specialty shops. Maybe someone has time to shop for sundries, rather than use Amazon. (This describes me. For the first time in years, my flexible schedule allows me to visit various stores for specific items. In the past, I was never available when the stores were open!)
Takeaway: Discuss how your schedule will change, then agree to support one another in the changes. Be respectful (in both directions) about time commitments. Don’t make assumptions about your partner’s availability.
Location
This one makes me laugh because it has affected me personally. Hybrid work and work-from-anywhere jobs being what they are, when one partner works from home and uses part of the master bedroom as an office, there’s no sleeping in for the newly retired partner who no longer commutes.
That’s right, you think you’ve earned your right to stay in bed, only to discover someone has an 8 a.m. (or earlier) Zoom call. (Sigh.)
When one partner works from home and uses the main living area as an office, woe to the retiree who had planned to take up watching Good Morning America.
Takeaway: When one or both partners work from home, retirement changes the dynamic of room usage and noise levels.
Professional Identity
This is a gnarly issue. And I think I’d be best advised to frame it as one of knowing thyself. There are people who can retire and never look back, whether their formal title was CEO or day laborer. They have prepared for their change of identity, or are so looking forward to the change, that they can put the past in its place.
But most professionals have developed a certain authority and gravitas in their roles. They had networks and, maybe, departments of people to assist them or take instruction from them. What does it look like when one person loses their professional identity, and the other partner continues to maintain it? Does it change the balance of power in the relationship? And is that balance of power identity-based, asset-based, or income-to-the-household based?
The fact is, it does affect the partnership. Some couples are bothered by pay (or responsibility) disparities; some are not. By the way, this is the same challenge that occurs when someone is caught in a corporate resource action. It’s vital to work through this sort of thing, regardless of when or how it has occurred.
Full disclosure: When Col. Mustard and I first got together, I earned more than he did. Then, when he started his own business, it evened out. Later, when I started my own business and his grew, he out-earned me and continues to do so. But that calculation is based on revenue. To make myself feel better, I calculate my income as revenue plus investments. But I also acknowledge that I need to do some mental gymnastics to make myself feel better. Hmm. That’s a “tell” I might want to take to a therapist. See what I mean?
Takeaway: Be aware of your partner’s sensitivity. Everyone has a different reaction to a loss or change of professional identity. Be candid about what validation you need; but be fair to a partner whose needs differ.
Now, on to the financial stuff.
Taxes
Many people retire with the expectation that they will do Roth conversions early in retirement when income is low and their Required Minimum Distributions (RMDs) haven’t kicked in. I’m not a fan of this. But there’s lots of research and plenty of models devoted to the task if the math works for you.
Unfortunately, when only one member of a dual-income couple has retired, the Roth conversion math may not work. So, waiting to do Roth conversions may not give you the necessary slack you seek in “filling up your tax bracket.” (This refers to the method of doing Roth conversions until you hit the top of your Federal tax bracket.)
That doesn’t mean that you should not do Roth conversions; but it requires care, timing, and discussions with your partner to understand what visible income is likely to look like before executing a conversion plan. This is partly because, as of 2018, Roth conversions cannot be reversed via recharacterization. And it requires a conversation to determine if income taxes resulting from the conversion should come from the converted funds or out of cash flow––your partner’s income.
Example: Partners filing jointly earn $200K and $180K, respectively. The first $192K is taxed at 24%. The remaining $188K is taxed at 32%. If the $180K earner retires, $8k plus any Roth conversions are still taxed at 32%.
Takeaway: Don’t assume you’ll be in a lower tax bracket in retirement, whether or not your partner continues to work. Federal tax brackets are large right now, and even a 45% income reduction may not provide significant change. Communicate carefully about how much IRA money you are willing to convert, and from which bucket the taxes on it will be paid. To my mind, don’t wait for retirement to do it, either.
Health Benefits
Then there’s the “gotcha” of means-tested benefits. While many retirees transfer their family medical insurance to their working partner, Medicare eligibility begins at 65 and is a preferred healthcare plan for most people.
Medicare Part B premiums, if you choose that option (versus Medicare Advantage), are means-tested by household. You will pay the base Medicare Part B premium plus a monthly surcharge called IRMAA (Income-Related Monthly Adjustment Amount). The IRMAA amount is based on your household income, NOT your individual income. So, even though you have reduced your income, the brackets are large enough that you may still pay a substantial IRMAA surcharge.
Is there a way to optimize this? Not really. You may grieve the amount of your IRMAA surcharge to Medicare. They may grant you a reduction. But perhaps the only real recourse is to plan carefully by putting aside a bucket of funds to pay for your Medicare Part B Premiums (or use your Health Savings Account). Once you collect your Social Security benefit, your Medicare Part B premiums will be deducted automatically from your monthly check.
I saved the best for last: household cash flow.
Household Cash Flow
Based on how you manage your household finances, up to half of your budgeted expenses are uncovered. It’s certainly a matter of negotiation for how you will make up the difference:
Will the working partner pay the full amount of monthly household expenses?
What about personal expenses?
Will the retiree have a pension or Social Security or take portfolio distributions or dividends?
Will the retiree engage in the retirement spending they’ve been looking forward to?
All of this requires discussion. It also provides an ideal opportunity to see if expenses change significantly for the newly retired partner.
And don’t write this off as silly, especially with shared funds: Think about how you would feel if your partner began to draw down a shared account that you set aside for your collective retirement. Also, would it bother you to pay more than what you have been paying to support the entire household?
Summary
I tried to deliver the above with no judgment. I sense there are people reading this who feel strongly about marital dynamics and joining all funds equally, for better or worse. And that’s fine for families where one partner may have chosen parenting as a career. But having your own professional career changes that dynamic. And the biggest problem is that the financial planning domain literature doesn’t address the complexity of emotions and logistics we need to operate in the modern scenario. In the 20th century, women weren’t yet 51% of the workforce. Nobody (well, almost nobody) worked from home. And divorces and second marriages weren’t as numerous. But this is our new normal. And good partnership means navigating our uncharted retirement territory as a team.
Do you have a story of “retiring separately together”? Please share your thoughts.
Reading: Couples, Money & Retirement
Because You asked…
“How to Use a Self-Directed Roth IRA to Invest in Startups” is our how-to eBook manual, in which I explain the mechanics of setting up a self-directed Roth IRA and its benefits as an effective private investment instrument.
For on-demand CFP® financial and longevity planning or help creating your model, become a Madrina Molly member. Membership includes access to me for Q&A, member Zooms, my office hours to work on your financial and longevity model, and Madrina Molly’s library of articles and mini-courses.
If you found this helpful and have friends or peers who may benefit from it, please share it with them.
Copyright Madrina Molly, LLC 2025
The information contained herein and shared by Madrina Molly™ constitutes financial education and not investment or financial advice.
Sherry Finkel Murphy, CFP®, RICP®, ChFC®, is the Founder and CEO of Madrina Molly, LLC.
I work with several people in this category and there is definitely finagling at multiple levels. Then of course there are those of us who will transition to single AND retired, upending things in a different way.
It is definitely something new. Retirement may not be a hard demarcation. The person who retires from corporate life may pursue a business or passion project with the same vigor (but not the same salary) as a career. As careers shift many people may be navigating changes that resemble this at all stages of life.