On Tuesday I mentioned that married couples have a distinct advantage when it comes to saving for retirement. Yet most couples I meet with haven’t maximized their opportunities because they think of their retirement accounts individually rather than as a team.

With so many options for saving – workplace defined contribution plans (401k, 403B, etc), defined benefit plan (pensions,), and Individual Retirement Arrangements (IRAs) – you have multiple options to make sure you get the most out of your investments. Here are a few of things to consider when you’re planning.

What Options Do You Have

You first need to assess your options.  Workplace defined contribution plans come with a wide variety of investment options and fees. You may find that your spouse has a low-cost plan with great options, while yours has higher fees. Or maybe your spouse’s employer matches a higher percentage of money invested in retirement plan. Knowing what options you have gives you the ability to shift your income and expenses to maximize the best plan for you both. You can use one person’s paycheck for retirement and live off of the other. Also consider how the different parts of your asset allocation works best with the different vehicles. 

Take Advantage of IRAs

If neither work plan gives you much bang for your buck, you can always use IRAs to supplement your retirement.  You can find many low-cost providers that offer great investment options, even if you are self-employed. Married couples also have huge advantage by being able to invest in a retirement account for both spouses, even if one spouse does not work. Normally, you can only invest in an IRA if you have earned income. However, non-working spouses can contribute to a spousal IRA as long as the other spouse had taxable compensation. Maxing out the account and earning a 7% return over 30 years would result in a nest egg worth over $1.2 million. Just remember that IRAs have income limits. So you may need to take advantage of options like the back-door Roth, if your income doesn’t allow you to invest in an traditional or Roth IRA.

Maximize Your Social Security

One of the biggest advantages that being married provides comes from spousal social security benefits. Spousal benefits can help a married couple in multiple ways. The couple can forgo some benefits in order to obtain a higher amount later on. In addition, a spouse who didn’t contribute to the social security system can still receive monthly income. I’ve gone into more detail on this topic here.  But, simply put, proper social security planning could lead to hundreds of thousands of dollars more in benefits than you would have as an unmarried couple. 

Being married can have many advantages. Don’t overlook many of the financial opportunities that can help give you a comfortable retirement.