When it comes to retirement planning, teamwork makes the dream work. Partnering up allows you to combine your strengths, share ideas, and make smarter financial decisions. Whether it’s aligning on your goals, maximising your savings, or simply ensuring you’re both prepared for the future, working together means you’ll be better equipped to build a retirement that suits you both perfectly.
Planning for retirement together is a smart and important decision, especially if you're part of a couple or family. By working together, you ensure that both partners’ financial goals and needs are united, which can lead to a more secure and comfortable future.
This article will share why it matters.
Joint financial planning
It further revealed that one in four married couples feel awkward talking about their spouse’s pension and savings, with 10% saying they had different views on retirement, leading to the topic being shut down.
However, as with most things in life, being open and honest is key. By planning together as a couple, you unlock great opportunities to maximise your combined retirement income, including taking full advantage of available tax benefits.
The first step is to have sincere conversations about your retirement goals and make sure you’re on the same page. Seeking professional advice from an FCA-registered adviser is crucial - they can guide you through your options and help create a plan that optimises your resources, ensuring you reach your shared retirement goals.
What does planning as a couple entail?
Ultimately, planning for retirement together ensures that you’re on the same page financially and emotionally, making your future more secure and fulfilling.
Firstly, retirement is not just about finances; it’s about the lifestyle you want to enjoy. Planning together allows you to discuss and agree on shared goals, whether it’s travel, relocating, or just relaxing at home.
Combined resources are another key factor. You can optimise both your savings and investments by pooling resources and leveraging each other’s strengths, such as different pensions, tax advantages, or income sources.
Financial protection is a vital consideration. Planning as a team means you’ll both be covered in case of unexpected events. You can plan for healthcare, insurance, and long-term care to ensure both partners are secure, even if circumstances change.
It can even strengthen your relationship as it will lead to better communication: Working on retirement plans together encourages open conversations about money, expectations, and future plans, leading to fewer surprises and peace of mind.
Tax benefits
Pensions operate on an individual basis, with each person having their own personal allowances. However, couples can take advantage of both partners' tax allowances to maximise their retirement benefits.
For instance, one partner may have limited capacity for pension contributions but surplus income that can be used to contribute to the other’s pension, maximising tax relief. Similarly, ISA allowances are individual, meaning a couple can take advantage of two £20,000 allowances, doubling their tax-efficient savings potential.
Taxable income and the sale of assets can be strategically managed between spouses to maximise allowances, exemptions, and lower tax rates. In the UK, each individual has a personal allowance of £12,570, meaning a married couple can earn a combined £25,140 before paying any income tax.
If one partner is in a higher tax bracket, income-generating assets can be transferred to the partner in a lower tax bracket, potentially reducing the couple’s overall tax liability. This allows both individuals to take advantage of their personal tax thresholds and minimise the amount of tax paid.
To find out more about tax planning please take a look at our essential tax planning tips for savers.
Estate/legacy planning
Family and legacy planning is crucial to securing your loved ones' future, as well as your own. Naturally, you'll want to ensure your family is protected and provided for in the years to come. While the desire to be together forever is strong, life can take unexpected turns, so it's important to have a plan in place to safeguard everyone's future, no matter what happens.
Planning your estates and wills together ensures that you not only protect each other, but also maximise the value of your estate. This thoughtful preparation allows your legacy to be passed on to the people who matter most to you, preserving your wishes for the future.
It's essential to plan for all eventualities in retirement and ensure both partners are well-protected and provided for. If one person in the couple earns more than the other, it's important to make provisions so that both can enjoy the retirement they envision. This includes strategies to equalise income or optimise pension savings.
Another key aspect of planning is safeguarding against unforeseen circumstances such as accidents or illness. Having the necessary legal arrangements in place is crucial. Lasting Powers of Attorney (LPAs) allow you to appoint someone to make decisions on your behalf for Finance and Property, as well as Health and Welfare, should the need arise. Setting up LPAs in advance is a smart step toward securing your future.
In addition to LPAs, having updated Wills and pension Nomination/Expression of Wish Forms is equally important. Regularly reviewing these documents, especially after significant life changes, ensures that your wishes are honoured, and your loved ones are taken care of.
To find out more about wills and LPAs please check out our wealth protection zone on our website, which includes a plethora of relevant and informative articles.
When planning your retirement with your spouse, it's essential to map out your preferred timeline. A financial adviser can assess whether your goals are realistic. If your plan falls short, you may need to delay retirement or adjust your expectations for your post-work lifestyle. By reviewing your plans and current arrangements early on, you can avoid any unwelcome surprises down the road.
Thoughtful planning today creates peace of mind for tomorrow.
How Reeves can help with your joint retirement planning
At Reeves, we’re dedicated to helping couples secure their financial future through tailored retirement, tax, and estate planning strategies. Our team will collaborate with you to create a personalised retirement plan that aligns with your goals, optimise your tax strategies to maximise savings, and guide you in establishing a legacy that reflects your values. With a focus on open communication and understanding your unique needs, we’re committed to providing expert guidance every step of the way. Reach out to schedule a consultation and take the first step toward a secure future together!
Join our 'Joint Financial Planning After the Autumn Budget: A Guide for Couples' webinar on the 19th November at 12:30pm to get more expert insights!
