When Boomers Face Separate Retirements: Dos and Don’ts

Susan Gordon was in her mid-50s when she lost her high-powered job at an investment bank in New York City. She went on several interviews at other banks but received no offers, explaining that she felt her age worked against her.

Gordon’s husband John is COO of an asset management company based in Jersey City, New Jersey, where the couple has an apartment.

Eventually, she decided to retire and spend more time at their condominium in Newport, Rhode Island, where she had grown up and still had family, and volunteer in the community.

The Gordons now spend most weekends in Newport while Susan travels back and forth between their two homes. 

With more and more baby boomers retiring each year, either by choice or because they lost their jobs in the economic downturn, many couples like the Gordons have to coexist while living different lives, at least temporarily, and face changes in their financial, social and emotional circumstances.

“The first thing is, it’s a good idea to revisit how to handle their cash flow and spending. It depends on the dynamics of the couple, and if they didn’t make the decision in haste or were not forced into it, it is easier,” Susan Zimmerman, a consultant at Mindful Asset Planning in Apple Vally, Minn., told BenefitsPro.  “Since the picture has changed, they made need to adjust their spending or shift it around a bit.”

Zimmerman’s new book, Mindful Money for Wealth and Well-Being: Help Clients Strike a Balance in Financial Planning, was published earlier this year.

She said most couples will have to deal with what she calls the “fear factor.” There is a big mental shift when there are not two paychecks coming in from the work you’re both doing,” Zimmerman explained. “Don’t go in guessing. Have some analysis of how quickly the money will be depleted and whether it will last long enough to can help you with adjustment to spending. What are the compromises we need so we don’t have to literally fear running out of money. “

Money was indeed a fear at first, Gordon said.  “We had to adjust to not having a second income.  We asked ourselves questions about what things we will do differently, what things will we not do at all, and what things will remain the same,” she said.

One thing high up on the checklist was deciding what to do about a condominium on Siesta Key, Fla.  Although they were able to rent it out during the peak season, there were taxes and other associated costs. In the end, they decided to sell it.

Gordon said she also had to get used to thinking more about “our money” and “his money.”  “When I stopped working but still spent at times I felt guilty about it. That’s been a tough one to get over.”

James Bungee, a financial planner in New York, said he helps couples visualize retirement by using an income timeline. It shows exactly when certain sources of income, such as one spouse’s salary, will stop and when others, like Social Security or a pension, will start.

The couple then needs to figure out a map for their living expenses. They need to go through the exercise of estimating “absolutely necessary” expenses, those where there is “some leeway,” such as eating out or eating at home, and “completely discretionary” ones like travel, Bungee said.