The Quirks of Age Gap Retirement for Aussie Couples

Written on the 21 October 2024 by Parkside InvestorPlus

Picture this: Kylie, 58, dreams of touring the Great Ocean Road in a caravan, while her partner, Sam, 42, is busy climbing the corporate ladder in Sydney's CBD.

Welcome to the world of age-gap retirement planning in Australia, where the path to a relaxed lifestyle can be as winding as the roads through the Blue Mountains.

While precise statistics on age-gap couples in Australia are limited, research from the Australian Institute of Family Studies suggests that relationships with significant age differences are becoming more common.

These couples face unique challenges when planning for their golden years.

Dr. Emma Thompson, a relationship psychologist from the University of Melbourne, emphasises the importance of early dialogue:

"Aussie couples with significant age differences need to have frank conversations about their future goals and expectations.  It's not just about superannuation; it's about aligning life visions."

Let's break down the three pillars of successful retirement planning for age-gap couples.

1. Lifestyle Synchronisation

Remember Kylie and Sam? Their differing life stages could lead to a retirement tug-of-war.

Kylie might be eyeing that caravan for trips to Uluru, while Sam's still gunning for that corner office in Martin Place.

Dr. Thompson suggests: "Create a shared vision board. It's a fun, visual way to identify common goals and address potential conflicts."

This exercise can help couples like Kylie and Sam find a middle ground, perhaps planning for phased retirement or long service leave that allows both partners to fulfill their dreams.

2. Financial Harmony

Money talks, but in age-gap relationships, it needs to speak two different languages.

According to the Association of Superannuation Funds of Australia (ASFA), individuals with younger partners often delay retirement to boost their super balances.

Financial advisor James Lee from the Financial Planning Association of Australia recommends:

"Consider a hybrid approach to your finances.

Keep some accounts separate to maintain individual autonomy but create joint accounts for shared goals and expenses."

It's also crucial to understand how age differences impact government benefits.

In Australia, the age pension eligibility (currently 67), can create interesting dynamics for couples with large age gaps.

3. Estate Planning Equilibrium

Estate planning for age-gap couples is like playing cricket on a spinning wicket.

It requires foresight, strategy, and sometimes, a bit of creativity.

Legal expert Maria Rodriguez from the Law Institute of Victoria warns: "Without proper estate planning, the younger partner could face significant financial insecurity if the older partner passes away first."

 She recommends regular reviews of wills, superannuation beneficiary designations, and enduring power of attorney documents to ensure they reflect the couple's current wishes and circumstances.

For blended families, consider tools like testamentary trusts, which can provide for a surviving spouse while protecting assets for children from previous relationships.

Successful retirement planning for age-gap couples boils down to open communication, flexibility, and proactive planning.

As relationship counsellor Dr. Alex Chen from Relationships Australia puts it, "Think of your age difference not as an obstacle, but as an opportunity to create a unique, tailored approach to your shared future."

So, whether you're the Kylie or the Sam in your relationship, remember, the key to bridging the age gap in retirement planning is to start building that bridge today.

After all, love may be timeless, but assets the likes of  superannuation and pension planning shouldn't be.

At Parkside InvestorPlus, we help individuals and couples of all ages to either plan for retirement or who may be ready for retirement, for more information and an obligation free consultation, contact us on (02) 9899 4899.