The Retirement Rehearsal Couples Should Try Before Leaving Their Jobs

Retirement brings major changes, including more time for travel, a looser schedule and, for some, the possibility of downsizing. But the biggest shift may be financial. Once work ends, income, taxes and spending all need to be revisited to help ensure your savings can support the lifestyle you want.

One useful way to prepare is to put your plan through a test drive.

Why couples should practice retirement

Retirement can reshape both finances and daily life, especially when one spouse stops working before the other. A trial run can show whether the household can live on one income and help both partners get ready for the real transition.

During this exercise, a couple covers monthly bills, taxes, healthcare, travel and other costs using the fixed income they expect in retirement. Trying it for one to three months can make the move feel far more manageable.

How to run a realistic retirement trial

Start by listing all expected retirement income, including Social Security, pensions, planned portfolio withdrawals and any part-time work. If you intend to use some savings, factor that in as well. Then try living only on that amount rather than your full salary. Another option is to direct current paychecks into savings or investments to mimic retirement cash flow.

Some costs are easy to estimate, such as housing and groceries, but others are often overlooked. Medicare premiums can rise over time, and supplemental coverage tends to become more expensive with age. Home repairs can also strain a budget, and depending on your situation, you may need to help adult children, aging parents or both.

Couples should also decide who will handle bill paying, investment management and other financial decisions, since those roles may shift in retirement. Duties can be shared or assigned to one partner.

What the test can show and how to respond

A trial run can reveal whether you are truly ready to retire and what needs attention before leaving work. Some couples may find that retirement is not the right move yet, while others may see that one spouse’s income is enough. The exercise may also show that spending needs to be reduced.

It can also help retirees think about the right time to claim Social Security. If living costs are hard to cover during the test, delaying benefits may be worth considering, especially for anyone planning to claim at 62. The longer you wait, the larger your monthly benefit will be.

You do not have to “pass” this exercise. Its purpose is to identify weak spots while there is still time to fix them. One thing it cannot fully test is how required minimum distributions, or RMDs, will affect your taxes. People with large balances in pre-tax accounts could face sizable RMDs later in life, though withdrawing gradually over time can help spread out the tax impact.