My partner is 18 years older than me. How do we plan for retirement?

There is an 18-year age gap between my partner and me. How should we be thinking about retirement planning?

The primary challenge is typically that when the older partner is ready to retire, the younger person still feels they have plenty of working life left in them. However, if the younger partner continues to work, the older person is concerned that by the time they are both retired, declining health could make it difficult to enjoy shared activities such as overseas travel.

An age gap like this can provide opportunities from a tax and super perspective, but can catch you out on things such as the pension.Credit: Simon Letch

From the limited sample of such couples size I can draw from, I’ve observed that the older member is fitter and healthier than would be typical for their age.

This was probably a factor in them getting together in the first place. Age is just a number after all, so hopefully you will still have plenty of vigour in your 70s, when your partner is perhaps ready to start easing off.

Financial planning strategy wise, an age gap like this can provide opportunities where the older partner can get access to superannuation, for example to clear a mortgage.

If the older member has retired and the younger one keeps working, the former might have an opportunity to draw tax-free income from their super while the other simultaneously salary sacrifices to their own super. It’s important here to view your retirement savings as a combined pool.

If eligibility for an age pension is a possibility for the older partner, the income generated by the younger person could have an adverse effect on means testing. A major flaw in our pension system is in not recognising the desire for people to have their own financial agency, irrespective of their partner’s circumstances.

You really need to sit down and discuss what each wants. Perhaps the younger partner could take long service leave, or leave without pay, in the early portion of your retirement, so you can tick off some bucket list items while fit for them.

Given the chaos that threatens to ensue from Donald Trump’s tariff policies, is a worldwide economic downturn inevitable? Should I transfer my superannuation savings from balanced into the cash option?

There is certainly additional volatility on stock markets at present and I appreciate your concern. However, it is well demonstrated that trying to time market entry and exit based on current news events leads to poor investor outcomes.

Research in the US by Dalbar found that while the S&P500 index delivered a return of 10.15 per cent annually over the 30 years to the end of 2023, the average investor in US equity funds earned 8.01 per cent.

Had these investors simply left their money alone, they would have generated better than 2 per cent extra in return – the inclination to tinker has cost them significantly. Over 30 years, an initial $100,000 investment left undisturbed in the index would have earned an additional $800,000.

Leave your investments alone. Even if you were lucky enough shift your funds just before some sort of collapse, you then need to be lucky a second time and pick the right time to get back in.

Riding the ups and downs is part of investing, and is why you are paid returns above cash.

Paul Benson is a Certified Financial Planner at Guidance Financial Services. He hosts the Financial Autonomy podcast. Questions to: [e-mail]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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