Every age has its own challenges for couples planning for retirement. In your forties, you’re finally making real money. In theory, that should make it possible to stash away serious savings for later life. But in this decade you and your spouse may find yourselves torn between two huge priorities: putting money aside for college for your children and retirement for yourself.
Making the tough money decisions isn’t fun. You may even avoid some conversations because they are fraught—say, because you don’t want to start bickering about how much to spend on education or vacations vs. retirement. Yet by failing to actively plan and save for later life, you could end up with literally hundreds of thousands of dollars less in your nest egg. And you might not be able to retire when and how you wish.
They key is to hash it out together: “It’s important to have a shared strategy of where you want to be financially,” says David Geibel, wealth adviser at Girard Partners in King of Prussia, Pa.
Here are four retirement-planning pointers for couples in their forties:
Peer into the future
Your thinking about retirement is probably still hazy. But get motivated by asking yourself and your partner some questions: At what age do you want to retire? Where do you want to live? You can jumpstart the conversation by each completing an online exercise that has you dropping snapshots of various retirement activities into a virtual desktop tray or trash can.
Read more: MONEY’s Ultimate Retirement Guide for Couples also includes advice for duos in their 20s and 30s, their 50s, and nearing retirement. Plus, take our quiz to see if you and your spouse are on the same page.
To afford a comfortable retirement, a 40-year-old couple with household income of $100,000 should have amassed savings of 2.6 times salary, or $260,000, according to research by J.P. Morgan. At age 45, with that pay, you should have 3.4 times your salary socked away. If you’re lagging behind, figure out what it will take to catch up by using an online 401(k) savings calculator such as this one from Bankrate.
Don’t flunk the college test
By the numbers, you should put retirement saving ahead of college—after all, no one will lend you money to finance your golden years. But your heart may say otherwise. Some 69% of parents want to put money toward college first, according to a recent survey by T. Rowe Price, and more than three quarters say they are willing to delay retirement to pay for kids’ schooling.
As ground rules, resolve to continue your 401(k) contributions and not to raid your retirement savings to pay tuition bills. Then decide with your spouse how much you will contribute to college expenses. One common formula holds that you cover a third of the total bill from savings, a third through cash flow, and a third through loans or grants. Or perhaps you agree to contribute at least enough for one year. Whatever you decide, plan to tel your children before the search process begins. “You don’t want to surprise them with bad news when the tuition check is due,” says Tom Mingone, a financial planner in New York City.
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Mix and match your 401(k)s
With two 401(k)s, grab the best of each plan, says Tim McGrath, a Chicago financial planner. Say her plan offers a cheaper stock index fund (a 0.3% expense ratio or less is good), while his offers a stable-value fund paying 1.5%. Do your stock investing in her plan and the fixed-income investing in his. For further diversification, you might find a real estate fund in his 401(k) and a fund that holds Treasury InflationProtected Securities (TIPS) in hers. If one plan has a brokerage window, as do about 17% of 401(k)s, you’ll have more choices, but check for added fees.
One of the smartest things you can do in your forties is to keep your spending in check as your salaries grow. Resist the pressure to keep up with the Joneses—be they your friends, your relatives, the parents of your children’s friends. Stay in your current house if it is big enough and don’t replace that 10-year-old car that is still chugging along. Automatic investing, like the 401(k) deduction from your pay, is your best ally. “It creates forced saving, which helps you avoid lifestyle creep,” says Brian Spinelli, a financial planner in Long Beach.
Melissa Madole-Kopp, 42, says it helped her trim spending when her husband Jeff Kopp, 41, created a graph showing how reduced saving would crimp their nest egg. They felt squeezed for a while after Melissa became a stay-at-home mom, but the pressure eased when Jeff got a raise.