Avoid These Top Mistakes in Dual-Income Retirement Planning
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CFFP Faculty & Instructors Posts: 6 
Key Planning Strategies for Dual-Income Households
1. Maximize Contributions Across Accounts
- Double up on 401(k)/403(b)/457 plans: Each partner can contribute the annual maximum—$23,500 in 2025, or $31,000 if age 50+.
- Roth IRAs & HSAs: Use Roth IRAs for tax-free withdrawals and HSAs for triple tax-advantaged healthcare savings.
2. Coordinate Retirement Timelines
- Staggered retirement: If one retires earlier, plan for interim healthcare coverage and income needs.
- Social Security optimization: Delaying benefits—especially for the higher earner—can boost spousal and survivor benefits.
3. Diversify Tax Strategies
- Balance pre-tax (e.g., traditional 401(k)) and post-tax (e.g., Roth IRA) savings to manage future tax liabilities.
- Consider living off one income and saving the other to accelerate wealth accumulation.
Top Mistakes Dual-Income Households Should Avoid
1. Planning in Silos
- Treating retirement planning as two separate efforts instead of a unified household strategy.
- Solution: Align goals, timelines, and investment strategies. Use joint planning tools or dashboards to visualize shared progress.
2. Underestimating Lifestyle Inflation
- Two incomes often lead to higher spending, which can erode savings potential.
- Solution: Consider living on one income and saving the other—especially during peak earning years.
3. Neglecting Tax Diversification
- Overloading on pre-tax accounts (e.g., 401(k)s) without balancing with Roth or taxable accounts.
- Solution: Diversify across account types to allow for flexible, tax-efficient withdrawals later.
4. Ignoring Social Security Optimization
- Claiming benefits too early or without coordinating spousal timing.
- Tip: Optimizing Social Security benefits for dual-income households is like solving a financial Rubik’s Cube—there are dozens of combinations, but the right one can unlock thousands of extra dollars over a lifetime.
5. Overlooking Healthcare Planning
- Not accounting for healthcare costs, especially if one partner retires earlier.
- Solution: Use HSAs, explore COBRA or ACA options, and factor in long-term care insurance if needed.
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