Coordination key to making tandem retirement work

By Peter Bothum
(Wilmington, Del.) News Journal

G. Irvin Lipp, who handled public affairs for DuPont, had every expectation that he would retire when he wanted (at age 60 or 61) and how he wanted (comfortably). His wife, Susan, who worked in sales, would follow soon after.

Irv and Susan Lipp have retired from their jobs at DuPont and now spend their time doing what they like, including playing golf. Tandem retirement is a challenge, experts say, but early planning makes it easier. Robert Craig • (Wilmington, Del.) News Journal

Fortunately, DuPont offered him an attractive package, one that would afford him and his wife ample time to relax and plot out the rest of their lives from the comfort of their home in Wilmington, Del.

But it was still a huge life decision, one that had to be coordinated with Susan's help and input.

Coordination is the key to a successful retirement, experts say. But coordinating a retirement is more difficult today than it used to be. More women are working, so their careers and retirement benefits also must be considered.

"The best situation is they plan their retirement together," said Bob Blanchfield, a certified financial planner and president of Wilmington-based Jarab Financial Navigators. "With half of the people, the husband and wife work together. Unfortunately, the other half don't."

Richard W. Johnson, a principal research associate for the Urban Institute, a nonpartisan Washington, D.C.-based think tank, recently looked into the need for retirement coordination.

Johnson's study on spouses and retirement decisions found that the movement of married women into the labor force has changed retirement behavior. A generation ago, when fewer women were working, it was easier to make retirement decisions — couples based planning on the husband's retirement benefits. Today, women are also accumulating benefits.

This makes it more difficult for couples to coordinate their retirements. The study included a survey that found that 20 percent of married couples retired the same year. About 30 percent of the husbands retired either one or two years before their wives, or one or two years after their wives.

The Lipps began working together as a team in 1990. While working for DuPont in Singapore, they had their first talks about retirement and began meeting with financial advisers. When the time came for Irv to make a decision about the retirement package, Susan was supportive.

"It's a very emotional decision," said Irv, now 60. "She felt comfortable with the decision. If you have a good marriage, you have to be on the same page."

Blanchfield said most people are procrastinators, waiting until their mid- to late 50s before formulating a plan. The planning needs to start as early as possible, he said.

One major decision is when to begin taking Social Security benefits. People can begin taking benefits at 62, but it's preferable to take them as late as possible. Benefits not used earlier can be saved and used whenever a person retires, Blanchfield said.

Couples should become more conservative in their investments once they reach retirement age. Find ways to maximize income streams from investments rather than aiming for growth, he said. Also, target funds that are designed to release a certain amount of income rather than those that are expected to grow.

From time to time, Irv Lipp wonders if he did enough planning. Many financial planners say you need to bring in 60 percent to 70 percent of your salary each year during retirement in order to retire in comfort.

"You look at it and go, 'Man, am I short,' " Lipp said. "That's part of retirement. That's part of planning. We have our health. We have our time."