Retirement Planning For A Newly Married Couple
While retirement may be many years away, it is always a good idea to have retirement planning in the back of your mind. Maybe you want to retire early. Maybe you like the job you have & want to keep working. How much are you going to spend each month? What do you want to do in retirement? Retirement planning is an important piece of financial planning, no matter your age. When you get married, your retirement planning may change. Maybe there are two incomes, two sets of financial goals, two different perspectives on retirement. This blog goes over some things to think about with retirement planning for newly married couples.
Establishing Financial Goals
Discuss Retirement Dreams: Talk about when you want to retire and the lifestyle you envision. Do you want to travel, buy a vacation home, or live modestly? Identifying these goals will help you determine how much you need to save.
Read this blog about setting financial goals as a couple:
Estimate Retirement Expenses: Think about your future lifestyle and estimate the expenses you’ll incur. Consider costs like healthcare, housing, food, entertainment, and travel.
A quick estimate on retirement expense funding needed is to take your yearly spending and multiply it by 25. For example, if you plan to spend $100,000 a year in retirement, then you would take $100,000 * 25 = $2,500,000 needed to fund your retirement. Keep in mind this does not account for other income, such as a part time job, Social Security, pensions or other income sources in retirement.
Maximize Employer-Sponsored Retirement Plans
If either spouse has access to an employer-sponsored retirement plan, like a 401(k) or 403(b), contributing to it is a good idea. These plans are a great way to save, and many employers offer a matching contribution, essentially giving you free money for your retirement.
Try to contribute at least enough to get the full employer match. For example, if your employer matches 50% of the first 6% of your salary, try to contribute at least 6% to take advantage of that match.
In 2025, the contribution limit for 401(k)/403(b) is $23,500 per person (plus a $7,500 catch-up contribution if you’re over 50-59 or 54+. If you are 60-63, you may be eligible for the $11,250 catch-up contribution).
Consider Individual Retirement Accounts (IRAs)
Traditional IRA: Contributions to a Traditional IRA are tax-deductible, which lowers your taxable income in the year you contribute. However, withdrawals in retirement will be taxed as ordinary income.
Roth IRA: A Roth IRA allows your investments to grow tax-free, and qualified withdrawals in retirement are also tax-free. The main benefit of a Roth IRA is that you won’t owe taxes on your retirement withdrawals. However, Roth IRAs have income limits (for 2025, the phase-out for married couples filing jointly is between $236,000 and $246,000).
With a Roth IRA, if you make over the income limit, there is a such thing called the “Back Door” Roth)
For 2025, you can contribute up to $7,000 per person to a Traditional or Roth IRA, or $8,000 if you're over 50.
Choosing between the Traditional vs Roth account type is more than just a guess. Here is a great blog to read on how to decide:
https://www.moneymattersfortwo.com/p/traditional-vs-roth-which-one-do-you-pick
Set Up Automatic Contributions
I am a huge fan of automatic contributions. A 401(k) or 403(b) auto invests every single paycheck. You may even forget those contributions are happening. This is so powerful over the long term.
Set up automatic transfers to your retirement accounts and taxable brokerage account each month. Treating retirement savings like a fixed expense ensures that you’re consistently contributing and building wealth.
As your income increases, try to increase your retirement savings rate. With every raise you get, increase your retirement/investment contributions. If your pay goes up by 5%, increase your contribution by 5%. For example, if you are making $10,000 a month & invest 20% ($2,000), if you get a 5% raise to $10,500 a month, then increase your monthly contributions to $2,100 (or more).
Plan for Healthcare Costs in Retirement
Healthcare will be one of the biggest expenses you will experience in retirement. Being proactive about how you will pay for healthcare is a good idea.
If you have access to an HSA through a high-deductible health plan (HDHP), this is a great way to save for future healthcare costs in retirement. Contributions to an HSA are tax-deductible, the money grows tax free, and withdrawals for qualified medical expenses are tax-free.
Read more about HSAs here:
https://www.moneymattersfortwo.com/p/health-savings-accounts-hsa-for-newly-married-couples
In retirement, you’ll likely rely on Medicare for health insurance once you reach age 65. However, there may still be out-of-pocket costs (like premiums, copayments, and deductibles). Be sure to plan for these in your retirement savings.
Start Saving Today!
One of the biggest things you can do for your retirement nest egg is to start today. Even if it is just $50. Just start. Compound interest is the 8th wonder of the world. The earlier you get it on your side, the more it helps you.
Start saving as soon as possible, ideally as soon as you’re married, even if it’s just a small amount at first. The earlier you start, the more time your money has to grow.
For example, let’s compare two couples, A & B, who recently just got married. Both couples are 25 years old each. Couple A reads “Money Matters For Two” and decide to start saving $800 a month until they are 55. Couple B reads “Money Matters For Two” and decide to wait until they are 35 to invest. But at 35 they agree to start investing $1,600 a month (twice as much as couple A) until they are 55. How much will each couple have at age 55, assuming an 8% average rate of return?
Couple A at 55 = $1,192,287 (total contributions = $288,000)
Couple B at 55 = $942,432 (total contributions = $384,000)
This is pretty crazy, isn’t it?! Couple A only invested $288,000 while couple B invested $384,000 yet they ended up with $249,855 more money for retirement. This is the power of starting young. Not to mention couple B invested double the amount couple A did on a monthly cash flow basis.
Social Security Benefits
Social Security can be an important part of your retirement income. While there are rumors about social security not being around in the future, most research shows it will be, to some degree. While you can assume your social security benefit on ssa.gov, I prefer to map out retirement planning where social security is icing on the cake, rather than the foundation.
The amount you receive from social security will depend on your lifetime earnings and when you begin claiming benefits. The full retirement age is currently between 66 and 67, depending on your birth year. You can start claiming social security as early as 62 (for a lesser benefit) or as late as 70 (for a greater benefit).
The estimated average monthly Social Security retirement benefit for January 2025 is $1,976.
Retirement Withdrawal Strategy
While retirement is probably pretty far away for you, it is good to think about withdrawal strategies in retirement. The accumulation stage of wealth building is a lot different than the de-cumulation stage of wealth building.
Some of the most common withdrawal strategies for retirement are the 4% rule, retirement stage spending or guardrail spending.
Another thing to think about when it comes to withdrawals is not all accounts are created equal. A Roth IRA dollar is more valuable than a traditional IRA dollar, due to how they are taxed.
Read more about tax asset location & why it is important:
https://www.moneymattersfortwo.com/p/tax-diversification-the-3-asset-location-buckets
Life changes. Plans change. You have a kid. You get a pay raise. You lose a job. You want to buy a house. You want to buy a vacation home. When it comes to retirement planning, it is an ever changing goal. Especially if you are 20, 30, 40 years from retirement. Retirement planning gets more important the closer you are to retirement, however it is always important. Starting to think about retirement planning in your 20s and 30s means you will be ahead of the game in your 50s and 60s.
Thanks for reading & I hope you found value in this post.
-Kolin
If you are looking to get organized on your finances, read this post: Getting Your Finances Organized As A Newly Married Couple
Disclaimer: The content provided in this blog post is for educational purposes only and should not be considered as financial advice. While every effort has been made to provide accurate and up-to-date information, the content on Money Matters For Two is based on personal research, opinions, and experiences. The financial landscape can change rapidly, and what may be applicable at the time of writing may not necessarily be applicable in the future.
Any financial decisions you make based on the information provided here are entirely at your own risk. Money Matters For Two encourages readers to do their own research and, when necessary, seek the advice of a qualified financial advisor or professional to ensure that any financial choices are appropriate for their individual circumstances.