10 conversations to have with your partner before you retire

You may be used to a particular financial set-up, but a new life stage could prove a minefield.

Differing retirement dreams and money issues are likely to be some of the reasons behind the rising number of the UK’s so-called ‘silver splitters’.

According to the Office for National Statistics, 92 out of every 10,000 married women aged 50 to 54 in England and Wales got divorced last year – up from 68 in 1993 – with the number also rising for those in their late 50s and over-60s.

Here, we consider some important questions you might want to discuss with your partner before you embark on this next stage of life.

1. Should we move home?

You may be perfectly happy in your home and plan to stay put for retirement, or you may have a particular change of location and lifestyle in mind.

Plenty of people plan to sell up and downsize in retirement, move to the country or abroad to a sunnier climate. Alternatively, you may simply want to live closer to family.

Whatever your aspirations, you need to be on the same page or at least willing to compromise on something as important as where you live.

2. How much income will we need?

The answer will depend on how and where you plan to spend your retirement and your lifestyle plans.

If you are staying in the same home, your day-to-day spending may not change much. But if you are making a big change, your income requirements could drastically alter.

It is wise to consider professional financial advice to work out if you are on track for a comfortable retirement. As a rule, many advisers work towards establishing a pension income of two-thirds of your annual salary.

3. Where will our income come from?

Once you have worked out how much income you might need in retirement, you will want to consider where this will come
from. As a couple, you are likely to have a range of pensions, investments and savings that may provide an income, alongside the state pension.

Liz Alley, divisional director of financial planning at Brewin Dolphin, says: “It is worth taking stock of what your retirement income looks like with a ‘wealth audit’.

“This should include all financial products you hold, from ISAs to investments. If you have moved around employers during your lifetime, it is worth making a timeline of who you worked for and what pension plans were in place.

“Meanwhile, ensure you consider all the allowances you have available, including ISA allowances and the dividend tax allowance. Bear in mind that one of you may remain a taxpayer in retirement, while the other becomes a non-taxpayer.”

4. When do you want to retire?

The age at which you retire is not set in stone. You might want to take early retirement, and you can access your company pension scheme from age 55 (rising to 57 in 2028). Or you might plan to retire alongside the state pension age, which is currently at age 65 for both men and women – increasing to 66 by October 2020.

A dramatic shift in your working life or different retirement ages can also affect your relationship, so be sure to discuss any concerns with your partner. If one of you is still working full-time while the other has fully retired, you could live very different lives for some time.

Conversations you need to have with your kids

While you are fit and healthy, it is important to consider any conversations you might want to have with your adult offspring.

Talking openly to your family is an important part of setting you up for your retirement years, as at some stage of life, many of us will suffer ill health, dementia or a stroke. There is also the issue of estate planning to avoid an eye-watering inheritance bill and ensure your children know what to expect.

Consider what happens if you are unable to make your own decisions about your health and manage your finances. There is no automatic right for your children or partner to make decisions on your behalf. This is why  it is important to have a Lasting Power of Attorney (LPA) in place, which is a legal document that authorises a third party, such as your child, to act on your behalf. For more details, visit Gov.uk/power-of-attorney.

Also, talking to your children openly about who will inherit what could avoid any confusion or sibling rivalry after you are gone. Sitting down with your wills is one way to go about this important conversation, including clarifying all your wishes for when you pass away.

5. Do you plan to continue working?

You may want to retire gradually, carrying on working part-time past the traditional retirement age – or for as long as you are able to. Or you may want to set up a business in retirement, so you can still earn some income and give yourself a fresh challenge. After all, the traditional path of long-term employment, followed by full retirement is not as common anymore. Talk to your partner about your ideal situation and any plans you might have.

6. How will you spend your leisure time?

You might want to take up new hobbies, do those long delayed home improvements, study, volunteer, or enjoy cruises around the world. Perhaps you have given little thought to how you want to spend your retirement.

These new activities could draw you and your partner closer together, with more time on your hands to enjoy your pastimes – or cause a rift if your interests are dramatically different.

It is worth having a chat with your partner about what may work its way on to your retirement to-do list, so there are likely to
be fewer surprises once your routine changes.

7. What will happen to your assets when one of you dies?

It is not a given that pensions and other assets pass from one partner to another. You should work out what will happen, depending on who will pass away first.

Danny Cox at Hargreaves Lansdown, says: “This will bring out issues such as wills, inheritance tax and nomination of beneficiaries for pensions, as well as where the money will go and will it be enough. These are all important areas to discuss.”

8. Do you have any money secrets?

Some couples keep their finances entirely separate, while others hold joint accounts. Yet whatever financial arrangement you have, you may not be entirely open about money matters. Perhaps you have a hidden account or debt you don’t want your partner to know about, for example.

However, if you are having an open conversation about your finances before retirement, it could be hard to keep any additional funds or debts in the dark. Consider it time to lay everything on the table and consider why you might be choosing to hide assets in the first place.

9. What concerns do you have?

Even if you gradually shift into full retirement, it can be a radical life change for many of us and a difficult transition to make. It is worth discussing any concerns or fears you might have about this life stage.

“One of the biggest fears for retiring couples is that they will run out of money,” says Mr Cox.

“You may also be concerned about the impacts of care costs and of inheritance tax, often mistakenly prioritising reducing tax on death, rather than making the most of lifetime tax savings such as ISAs or making contingency plans for care costs.”

10. Are there any differences we need to tackle?

Once you have talked about these questions, consider whether there are any major issues to address specific to you and your family that will impact on your lifestyle when you retire. This might your health, concerns about elderly parents and any support you may want or need to offer your children or grandchildren.

It is important not to assume that you will have the same priorities but by talking about these matters sooner rather than later, it will be easier to iron out any differences and come up with a plan that works for you both.

How to have a positive conversation

Rachel Davies, counsellor for relationship charity Relate, offers these tips:

• Be clear in advance what you want from the conversation and communicate this to your partner.
• If there is a lot to discuss, a few regular chats are better than one marathon session.
• List what you want to talk about in order of difficulty – start with the easier stuff, and you will be boosted by success and won’t get overwhelmed by the harder subjects straight away.
• Get out of the house – go for a walk if you are talking about general issues or go to a café if you need to look at paperwork or write things down.
• Agree in advance to focus on respectful communication and to stick to the matter in hand – rather than bring up left-field issues.
• Set boundaries in advance – such as what time you will finish.
• Switch off mobile phones to make sure you won’t be interrupted.
• Take a ‘communication check’ – are you talking more than listening or not getting a word in? Adapt accordingly: maybe ask more questions or speak less.
• Both summarise at the end, so you feel confident you are on the same page.  If there are issues that remain unresolved, fix another date to talk.
• If you are still finding it difficult, talk to someone objective, such as a counsellor. Find out more at Relate.org.uk.

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