Peter McDougall
In this age of dual income families, chances are you and your spouse won't retire at the same time. You may be different ages, or have different ambitions -- or there might be financial reasons for one of you to delay retirement.
Here's a quick review of some factors that might make it worthwhile for couples to consider two separate retirement dates: Putting Off IRA Withdrawals If your spouse continues to work, he or she can continue to make annual contributions to an IRA (up to $5,000 in 2008). Workers aged 50 or older can contribute an additional $1,000 (in 2008) a year to their IRAs in the form of catch-up contributions. Those extra couple of years can make a big difference in your financial situation when it comes time for you both to start living off of your retirement income. Meanwhile, the income your spouse earns at work might allow you to delay drawing on your own IRA for a few years -- or to keep such withdrawals to the minimum required by law. (Once you turn 70 ½, you'll have to take required minimum distributions whether you need the money to live or not.) The ability to delay your withdrawals could help you to meet your retirement goals. For example, let's say you've managed to save $300,000 in your IRA by the time you retire. If you can leave that money untouched for three years, it will grow to $378,000, assuming you earn an average return of 8% per year.
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