Preparing For A Dual Retirement

by Redeeming Riches on April 4, 2012

Good Morning Redeeming Riches Readers. My name is Kristina and I am the daily blogger at DINKS Finance.  Today Redeeming Riches and DINKS Finance have decided to exchange blog posts; I hope you enjoy reading as I share my financial expertise with all of you.

DINKS Finance is a personal finance blog for couples by couples.  The term DINK is an acronym for Dual Income No Kids.  I have been in a relationship with my long term boyfriend for over 12 years and although we are not (yet) married we do share the same financial success and the same financial struggles as married couples.

One of our main goals and one of the main reasons why my boyfriend and I try to focus so much on our careers is that we are planning for a financially stable retirement.  I don’t know about you, but I definitely don’t want to be working 9 to 5 for the rest of my life.  I absolutely love working in Personal Finance, but I definitely don’t want to do it forever.

dual retirement

There are several financial advantages when we are planning for dual retirement, but there are also some financial struggles. It is important to actively plan for a successful retirement instead of just saving money with no intended purpose. Saving with a plan ensures that we know exactly how much income we need to maintain our desired lifestyle in retirement, which sources we will use to fund our retirement income, as well as how to plan for the other financial and personal goals that we want to achieve during retirement.

The main advantage of planning for a dual retirement is that we have two people contributing towards our retirement savings. Even though we may not retire at exactly the same time as our spouse at least we can each use our individual incomes and savings to plan for our dual retirement.

It is important to discuss our retirement plans and goals with our spouse so that there are no unpleasant surprises during retirement.  If we both know why we are working and what we are working towards then the reward of retirement will be so much greater.

One of our retirement goals may be to retire in a different country with a warmer climate. The key to retiring abroad is to try and purchase the property while we are still both working.  We can use our dual incomes to support the mortgage payment and then by the time we retire we will be completely mortgage free. We can also sell our primary residence which will provide a nice little nest egg and help us jump start our retirement. Couples can also continuously save throughout their working years and pay for their retirement home in cash, this is alternative option to paying a mortgage.

Another main advantage of planning for a dual retirement is the option of income splitting.  If one spouse earns a higher income than the other we can transfer tax credits and retirement savings plan contributions between spouses.  This provides tax advantages during our working years for the higher earning spouse and it also ensures that both spouses are in the same (and a lower) tax bracket during retirement.  We have paid taxes during our entire working life; we definitely don’t want to do so during our retirement. What are your retirement plans?

photo by martin

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