July 2008

Age disparity in marriage has been the subject of speculation throughout history.

Long before Tim Robbins hooked up with Susan Sarandon, 12 years his senior, William Shakespeare, at 18, married 26-year old Anne Hathaway.

New World settler John Rolfe wed Indian princess Pocahontas, 10 years his junior, in 1614. John Kennedy was 12 years older than Jacqueline Bouvier. John McCain is 17 years older than spouse Cindy.

Mixed-aged couples endure raised eyebrows, ribbing and sometimes awkward situations. Imagine having a mother-in-law younger than you or a stepson who beats you to Social Security.

These couples also face special challenges when they want to retire at the same time, according to Tiffany Irving, a wealth strategist for Northern Trust.

Calculate the load
Age differences of 10 years or more change the math for couples who want to retire together.

Imagine retirement as building a bridge to span your post-work life. Because a mixed-age retirement may have to last four or five decades instead of two or three, you’ll have to build the Golden Gate Bridge (almost 9,000 feet) while the Brooklyn Bridge (about 6,000 feet) might suffice for a same-age couple. The assumptions will differ, the calculations are more complex, and the tolerances are tighter.

“A longer period of retirement means your income has to last much longer,” Irving says. “And there are more opportunities to miscalculate.”

Plus, May-September marriages often come with complications, like ex-spouses or children from prior unions. The couple may face a wider range of lifestyle challenges, like toilet-training toddlers while caring for elderly parents.

So, if you want your retirement to lap those of same-age couples, you’ll need a head start. And, you may need to be more diligent in your financial planning efforts than a same-age couple, advises Irving.

Assets to span the divide
You’ll want to allocate your portfolio to make sure it addresses the need to provide income now and growth to generate income in the future. Irving suggests that you:

• Save expansively. Retirement may cost you more, so you’ll need more assets. Max out your IRAs, 401(k)s or pension plans to increase your retirement assets. The same million dollars that might be enough for two 65-year-olds might not suffice for a 65-year-old married to a 40-year-old. They’ll have to make the money last twice as long.
   
• Calculate cautiously. To cover more decades, use more conservative assumptions about the growth of your assets. While a same-age couple might assume 7 percent growth, a mixed-age couple might want to choose a more conservative 5 percent or 6 percent. The more aggressive your assumptions are, the less likely they’ll come to fruition.
   
• Balance your risk profile. Where a same-age couple at retirement age might want to invest half their portfolios in equities, a mixed-age couple might move that up to 55 percent to support the longer life of the younger spouse — with perhaps a higher percentage in cash to offset the increased risk.
   
• Revisit your assumptions regularly. This is important to all couples, but as your marriage may span more generations, you’ll be more at risk for life changes, like weddings, births and funerals. So, you will want to make sure that your investments stay relevant to your circumstances.

Paying the tolls
Before you both quit your jobs, figure out how much money you’ll need to support your retirement habit. Will you maintain your current level of expenses or add to them with a second home or sailboat? “You’ll need to plan your cash-flow needs more carefully than those who married their high-school sweethearts,” Irving says. She cautions couples to: