The transition into retirement creates a narrow window when certain decisions matter more—and are harder to undo. For couples, decisions made now can shape their financial picture for years.
“Couples often get the best outcome when they plan retirement timing, income, and benefits together,” says Brad Koval, a director in Financial Solutions at Fidelity Investments.
Here are 7 decisions couples should consider making together as retirement approaches.
1. Retirement timing
One of the first decisions couples face is whether to retire at the same time or to stagger retirement dates. There’s no universal right answer—but different choices can materially affect income, health coverage, and day-to-day life.
Retiring at the same time may make sense if:
- Your household income can support 2 people without earned wages
- Health insurance is affordable for both of you
- You plan to claim Social Security around the same window
Staggering retirements may work better if:
- One spouse’s income is needed to cover living expenses or benefits
- One employer plan offers strong health coverage
- One spouse wants to delay Social Security to increase future benefits
- The working spouse plans to continue saving and building benefits
For many couples, the decision isn’t always voluntary. Unplanned early retirement due to health or job loss is common, making flexibility and backup plans essential.
The Employee Benefit Research Institute’s annual Retirement Confidence Survey has found that nearly half of retirees left the workforce earlier than expected—on average, by about 3 years sooner than they had planned.1
2. Cash flow and day-to-day money management
When one or both spouses retire, cash flow often changes before anything else does. Earned income may drop quickly, while retirement income typically ramps up in stages—from portfolio withdrawals to pensions to Social Security. Coordinating who pays the bills, where income comes from, and how decisions get made during this transition can help couples avoid stress and costly missteps.
Start by mapping how day-to-day expenses will be covered as earned income declines and retirement income sources become available. When one spouse continues to work, paychecks may continue for a time while withdrawals, pensions, or benefits begin.
One key decision to work through together: Identifying which income sources are intended to reliably cover essential expenses—such as housing, insurance, and utilities—once work income ends or reduces, and which expenses can be supported more flexibly. Fidelity suggests covering essential expenses with guaranteed income sources in retirement, including annuities, pensions, and Social Security.
Discretionary spending may need greater adjustment as income sources shift and priorities change.
Read Viewpoints: 3 keys to your retirement income plan
It can also help to talk through timing mismatches. One spouse may still be working while the other begins drawing from savings, or portfolio withdrawals may need to bridge the gap before pensions or Social Security begin. Understanding how much income is needed—and where it will come from—can clarify how much flexibility you really have.
Read Viewpoints: Want to retire early—and not risk your future?
Just as important is agreeing on roles and access. Retirement often triggers a shift in who manages day-to-day finances, particularly if one spouse handled most financial tasks while the other focused on work.
Both spouses should understand:
- Where accounts are held and how to access them
- Which accounts fund monthly spending—and why
- How income changes if one spouse stops working unexpectedly
- What steps to take if one partner can’t manage finances due to illness or injury
- Which accounts are intended for short-term spending versus long-term income later in retirement
Retirement is also an important moment to stress-test your cash flow plans against real-world scenarios—such as your spouse’s job ending earlier than planned, higher health expenses, or market volatility affecting withdrawals. Walking through these scenarios together and with a financial professional can help strengthen your financial plan.
Coordinating cash flow and responsibilities early may not feel urgent, but it can be one of the most practical ways couples can protect each other during the transition into retirement.
Read Viewpoints: Ready to retire? You still need a budget
3. Health care coverage and costs
When one spouse retires before the other, health coverage often becomes the most time-sensitive coordination decision. Common options include joining the working spouse’s employer plan, continuing coverage through COBRA, or purchasing an Affordable Care Act (ACA) marketplace plan until Medicare begins.
If you find yourself changing insurance, pay close attention to the enrollment windows for each option. For public marketplace plans and COBRA, you typically have 60 days to enroll from the time you lose coverage. Employer plans typically have 30-day special enrollment periods, but some employers may extend this. These periods are important to keep in mind, as the further you get from the date you lose coverage, the fewer options you may have available to you.
Which option works best depends on how long coverage is needed, total household income, and how premiums and out of pocket costs compare. If a retired spouse is covered by the other spouse’s active employer plan, Medicare Part B can usually be delayed without penalty, depending on employer size.2
Health coverage choices can have ripple effects across cash flow and taxes—especially when one spouse is still working—making this an important decision for couples to evaluate together.
4. Lifetime tax management
When wages stop or drop, couples may move through a brief period when total income is lower than it has been for years, often called the retirement income valley. This creates a window of opportunity that could be used to significantly lower lifetime taxes.
The period of lower earned income may offer the opportunity for strategies that can help smooth income over time—keeping it low enough to avoid certain thresholds while, in some cases, increasing it strategically to reduce future tax spikes.
Because Medicare premiums, investment surtaxes, and some tax credits are based on total income, tax planning tends to be most effective when couples look at the household picture rather than individual accounts. Decisions about when one spouse retires, when Social Security begins, or which accounts to draw from first can all be critical in the success of your retirement plan.
Couples should also consider how taxes may change over time—including after the death of a spouse. For example, a surviving spouse may move from married filing jointly to single tax brackets, which can increase taxes on the same level of income, a situation often called “the widow’s penalty.”
Planning ahead may help soften that potential impact. In particular, the years around retirement can offer an opportunity to manage income to potentially reduce exposure to higher taxes in the years ahead.
For example, a couple might choose to meet retirement expenses with money from a checking or brokerage account for a few years rather than starting Social Security early. This approach may help keep taxable income lower for a longer period of time—potentially reducing or avoiding Medicare premium surcharges during those years, assuming the investments in the brokerage account don’t generate large taxable gains.
Read Viewpoints: Will your retirement income impact Medicare surcharges?
At the same time, there may be situations when increasing income strategically during low-tax years can support longer-term tax planning.
For example, converting money to a Roth IRA during lower-income years can help reduce future taxes or required minimum distributions (RMDs). But because the converted amount is treated as income, it can also raise your taxable income in the short term—potentially affecting Medicare premiums, health insurance subsidies, or other income-based thresholds.
Read Viewpoints: Taxes and the transition to retirement
Reviewing these tradeoffs with a financial professional can help couples decide which goals matter most, and when.
Because these decisions are complex—and often time sensitive—it can make good sense to review a few different scenarios before locking in a decision.
Read Viewpoints: Get the most out of your pension
5. Social Security benefits
For couples, the decision around Social Security is an opportunity to coordinate 2 claiming decisions to support household income over time—and to protect the surviving spouse.
Benefits can begin as early as age 62, but claiming before full retirement age results in a permanently reduced payment. For anyone born in 1960 or later, full retirement age is 67. Delaying benefits beyond full retirement age increases payments through delayed retirement credits—roughly an 8% increase per year—until age 70, when those credits stop accruing.
Choosing when each spouse claims affects not only monthly income, but also potential spouse and survivor benefits and how long portfolio withdrawals may need to bridge income gaps. Age differences, health, life expectancy, and cash flow needs can be important considerations.
Spousal benefits can be especially important for couples with uneven earnings histories or where one spouse has worked fewer years. In some cases, a lower-earning spouse may be eligible to receive a benefit based on the higher-earning spouse’s record—up to 50% of that benefit at full retirement age—which can help increase total household income over time.
Because survivor benefits are based on the higher earner’s benefit, many couples consider delaying benefits for the higher-earning spouse to increase both their own payment and the income that may later support the surviving spouse. If one spouse dies, the surviving spouse may be eligible to receive up to 100% of the deceased spouse’s benefit, provided they have reached full retirement age.
Couples with similar ages, incomes, and longevity expectations may instead focus on coordinating claims to maximize combined lifetime benefits, rather than prioritizing one spouse’s benefit over the other.
Read Viewpoints: Social Security tips for couples and 6 ways to help maximize Social Security
If either spouse has a pension, those decisions deserve the same joint review. Pension payout choices can permanently affect income for a surviving partner, and options that pay more upfront may end at death, while joint and survivor payments trade higher early income for longer-term security. Because many elections can’t be changed later, couples should review pension and Social Security decisions together in the context of household income and longevity risk.
Read Viewpoints: Get the most out of your pension
6. Potential long-term care needs
Long-term care is one of the largest—and least predictable—expenses many couples face later in life. Traditional Medicare and Medicare Advantage plans generally don’t cover extended stays in nursing homes or assisted living facilities, which means these costs often fall directly on the household.
Planning ahead can help clarify how care would be paid for, how responsibilities might shift if one partner needs support, and how long-term care could affect the surviving spouse’s financial security.
If you are considering purchasing long-term care insurance, the earlier you can do so, the better. This is because long-term care premiums tend to increase as you age and because the likelihood of being denied as a result of medical underwriting only increases as time goes on. Some products even lock in your premiums at the age you purchase them, so your premiums may remain level as of the age you purchase the insurance for the remainder of the time you pay for coverage.
Talking through scenarios early—such as whether care would be provided at home or in a facility, and how costs would be handled—can help avoid rushed decisions during a health crisis. Even if plans change later, having a plan and setting expectations can reduce stress and protect both partners over the long run.
Read Viewpoints: 6 ways to pay for long-term care
7. Estate planning
Retirement is often the last major checkpoint before estate and health documents matter most. As income sources change and responsibilities shift, having the right documents in place can help ensure each spouse can act quickly—and according to shared wishes—if something unexpected happens.
At a minimum, both partners should review and update:
- Wills and beneficiary designations on all accounts
- Powers of attorney for finances and health care
- Health care proxies and HIPAA release forms
“Make sure you both have up-to-date wills, powers of attorney, and beneficiary designations so assets transfer smoothly and according to joint wishes if one of you has a health crisis or dies,” says Koval.
It’s also important to review how major assets—such as your home, bank accounts, and investment accounts—are titled. Proper titling and beneficiary designations can help avoid delays, unintended tax consequences, or probate complications, particularly for a surviving spouse.
Retirement is a perfect time to revisit these documents and confirm that both partners know where they’re stored and how to access them.
For more, read Viewpoints: 5 steps to create an estate plan
Parting thought
Retirement isn’t a one-time decision—it’s an ongoing adjustment. Spending patterns change, priorities evolve, and unexpected events can reshape even the best plans. Holding regular money conversations can help couples stay aligned as circumstances shift.
Sometimes these discussions are about logistics or problem solving. Other times, they’re about future dreams. Either way, keeping communication open can help both partners stay engaged in the plan—and better prepared for whatever comes next.