3 Reasons Why Spouses Should Plan Separately For Retirement

Even in the metro and tier-I cities across India where women significantly contribute to the workforce and household income, when it comes to retirement, most women rely on their spouses.

However, it is advisable that couples plan for their retirement separately. Not only will it empower women, and make them independent, it will also lead to a more secure future and ease the burden of building a retirement corpus on one individual. Besides, it will also give them enhanced financial cover in case of an emergency, in addition to providing a healthier and better lifestyle for both.

So, here are three reasons why a couple should plan retirement separately

Extra Financial Security: Let’s say a man is planning for retirement. They will typically factor in financial obligations, such as supporting spouse, loans, and children’s education, and wedding expenses in their plan.

There are also a lot of factors that come into play while planning for retirement, such as diversification of assets within and across the asset classes, but most of all inflation that can trick you. Having one person share the entire burden can be worrisome, especially for an average middle class individual. It helps if the spouse also shares this financial burden for the sake of higher financial security. It is also beneficial in an emergency situation or if one person falls short of funds due to inconsistencies in their planning.

Greater Insurance Coverage: Spouses can have separate health insurance policies to accommodate different needs and provider networks. Separate plans offer flexibility and independence, while allowing higher accessibility to different healthcare provider networks. Also, tax benefits can be claimed for individual plans, potentially reducing tax burden on income. When choosing, consider individual needs, employer-sponsored plans, budget, future plans and pre-existing conditions. It is important to update beneficiary information to reflect marital status while selecting a policy.

Higher Affordability: Separately planned retirement funds allow greater financial flexibility. In case, one fund falls through, you will have a back-up corpus to rely on. It also allows more affordability to lead a better or a lavish lifestyle, allowing more comfort in retirement. Another benefit is you can afford better healthcare options. In essence, having separate corpus allows you to be more prepared for old age and tackling inflation, which can otherwise take out a large portion of your savings.