For couples where both partners earn, having two monthly salaries can make the family’s financial situation appear secure. Their combined income may cover household expenses, children’s education, housing, travel and other needs while also allowing them to save and invest. However, this financial comfort during working life does not guarantee the same level of security after retirement.
The real test begins when employment ends and regular salaries stop, while many household expenses continue. Electricity and utility bills, food, home maintenance, vehicles, insurance, taxes and daily necessities do not disappear after retirement. At the same time, healthcare costs can increase significantly with age.
It is easy to assume that expenses will automatically fall after retirement because commuting and some work-related costs will end. In reality, this is not always the case. Retired couples often have more time for travel, entertainment, hobbies and family activities, and may want to spend money on things they could not afford during their working years.
Older family members may also continue supporting their children financially after retirement. Expenses related to children’s marriages, buying a home, starting a business or dealing with an emergency can reduce retirement savings much faster than expected if they were not included in the original plan.
Inflation is another major factor. The amount of money that appears sufficient today may not have the same purchasing power after 10, 15 or 20 years. Rising prices of food, healthcare, housing and other necessities can significantly increase the amount needed to maintain the same standard of living.
A Large Retirement Fund Alone Is Not Enough
One of the most common questions people ask is how much money they have accumulated. But a more important question is how much reliable monthly income that money can generate after retirement.
A family may have a large retirement fund, provident fund, gratuity or other assets, but without a clear strategy for turning those assets into regular income, financial pressure can develop after a few years.
Property can also be a valuable retirement asset and rental income can provide financial support. However, property does not necessarily generate rent continuously. Vacancies, repairs, taxes and other costs can reduce the actual income.
Turning Investments Into Regular Income
Different assets provide income in different ways. Bank deposits, National Savings schemes, mutual funds, stocks, sukuk, property and other investments all carry their own benefits and risks.
Some investments generate regular returns, while others may increase in value over time and can be sold when money is needed. However, these assets should not automatically be treated as a permanent replacement for a monthly salary.
If money is regularly withdrawn from investments after retirement, market conditions, investment returns and the withdrawal rate can all determine how long the retirement savings will last.
For married couples, another important question is what will happen financially if one spouse dies before the other. A financial plan based entirely on two incomes and shared expenses could become difficult to maintain if one income disappears.
Couples should therefore understand whose name their pensions, investments, bank accounts, property, insurance or takaful policies and other assets are in, and how much income the surviving spouse would have access to.
Both partners should also be familiar with each other’s financial affairs. Keeping information about important accounts, investments, documents and beneficiaries with only one spouse can create unnecessary difficulties during an emergency.
Healthcare Costs Need Separate Planning
Healthcare can become one of the most unpredictable expenses after retirement. A major illness, surgery or prolonged treatment can consume a significant portion of retirement savings.
If there is no separate fund for such expenses, families may have to withdraw money from their main retirement savings, potentially disrupting their entire financial plan.
Healthcare coverage, insurance or takaful and an emergency fund should therefore be considered important parts of retirement planning.
Understand Pension and Retirement Benefits
Some employees receive a regular pension after retirement, while others receive provident funds, gratuity or a lump-sum payment. For many people, personal savings and investments become their main source of retirement income.
Couples should therefore determine well before retirement what their expected sources of income will be after employment ends.
If one spouse receives a regular pension while the other only has accumulated savings, their financial needs and retirement strategies may be different.
There is no single retirement savings target that works for every family. The amount required depends on monthly expenses, whether the family owns a home or rents one, financial responsibilities toward children, expected retirement age, existing investments, pension income, potential healthcare costs and the desired lifestyle.
A couple who owns their home, has completed major financial responsibilities toward their children and receives a regular pension will have different needs from a couple that must continue paying rent and has no permanent pension.
Start Planning as Early as Possible
Younger couples have more time to build retirement wealth through regular savings and diversified investments. Because they have a longer time horizon, even relatively small but consistent savings can grow into a significant amount over the years.
People approaching retirement may have different priorities. They may need to focus more on protecting their accumulated wealth, creating reliable income, maintaining an emergency fund and ensuring that their savings last throughout retirement.
Ultimately, retirement planning is not simply about asking how much money has been saved. The more important questions are how much monthly income those savings can provide, whether that income will remain sufficient as inflation rises, what will happen financially if one spouse dies, whether separate funds are available for medical and emergency expenses, and whether income can continue if retirement lasts longer than expected.
Two salaries can provide a strong financial foundation during working life, but true retirement security becomes clear when those salaries stop. The goal should therefore not be limited to accumulating a large amount of money, but to building a financial strategy that can continue providing reliable income for household expenses, healthcare, inflation and unexpected circumstances for many years after retirement.
