Retirement Planning for Couples with unequals income levels

How Should Couples Plan Retirement When Income Is Unequal?

Learn how couples with unequal incomes can plan retirement together with smart strategies, budgeting tips, and financial protection insights

Written by : Knowledge Center Team

2026-02-24

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6 minutes read

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People often think of retirement planning as a personal financial journey, but for couples, it is a shared goal that is shaped by their decisions, lifestyles, and responsibilities. When partners earn unequal incomes, planning can feel more complex. Differences in savings capacity, risk tolerance, and career trajectories can create uncertainty about how to divide responsibilities and build a common retirement fund.

Yet, unequal income does not mean unequal security. With thoughtful retirement planning for couples, clear communication, and structured financial strategies, partners can create a plan that protects both individuals while strengthening their long-term financial stability.

This blog breaks down how couples can approach couples financial planning when incomes differ, from setting shared goals and balancing contributions to managing risks and building a retirement strategy that works for both partners.

Key Takeaways


  • Contribute based on a fixed percentage of income rather than a fixed rupee amount
  • The higher earner should fund the lower earner's independent accounts (NPS/PPF) to build a separate safety net
  • Use the Married Women’s Property Act for life insurance to ensure the payout is legally reserved for the wife and children
  • If the higher earner pays the home loan EMI, the property should still be in joint names for long-term security
  • Use the lower earner's lower tax bracket to invest gifted money in tax-free instruments like PPF to avoid income clubbing

Why Unequal Income Requires a Different Planning Approach?

When one partner earns significantly more, splitting savings equally may not always feel practical or fair. Instead, retirement planning for couples works best when contributions are aligned with income levels, and both partners are working toward shared financial goals.

  • Different Earning Capacities: Income gaps naturally influence how much each partner can set aside for retirement. A proportional approach allows both individuals to contribute comfortably without creating financial pressure.
  • Career Breaks And Caregiving Roles: One partner may step away from work for childcare, family responsibilities, or personal priorities. During such phases, savings plans may need temporary adjustments so long-term goals remain on track.
  • Varying Risk Tolerance: Partners often have different comfort levels with investment risk. Building a portfolio that balances growth and stability helps address both perspectives while supporting shared objectives.
  • Unequal Employer Benefits: Differences in provident fund contributions, pensions, or workplace benefits can lead to unequal long-term savings. Factoring these into the overall plan ensures a more balanced retirement outlook.
  • Diverse Financial Priorities: Individual aspirations, such as travel, supporting family members, or pursuing hobbies, can vary. Incorporating these into a joint plan ensures both partners feel represented in the financial roadmap.
  • Tax Planning Differences: Optimising investments across both incomes can reduce the overall tax burden and improve net savings. Coordinated tax planning is an important element of effective couples financial planning.

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How Couples Can Set Shared Retirement Goals?

A meaningful retirement plan begins with clarity. When couples take the time to align their expectations around lifestyle, timelines, and expenses, they create a roadmap that reflects both partners’ aspirations and realities. This shared understanding reduces future financial surprises and strengthens long-term decision-making.

  • Discuss Lifestyle Expectations: Start by visualising what retirement will actually look like for both of you. This includes decisions such as where you plan to live, whether you want to relocate, and the kind of day-to-day lifestyle you envision. Having these conversations early helps translate abstract ideas into practical financial targets and ensures both partners are working toward a common vision.
  • Define Retirement Timelines: Couples don’t always retire at the same time, especially when career paths or job satisfaction levels differ. One partner may want to slow down earlier, while the other may prefer to continue working for financial or personal reasons. Planning for these staggered timelines helps you structure income sources and savings so that the transition remains smooth and financially secure.
  • Estimate Joint Expenses: Once expectations and timelines are clear, the next step is to calculate what retirement will cost. This includes essential expenses like housing, utilities, healthcare, insurance, and daily living, along with discretionary spending such as travel or hobbies. Building realistic projections and revisiting them periodically ensures your savings strategy remains aligned with actual needs.

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Practical Steps Couples Can Follow to Plan Retirement Together

When incomes differ, a structured approach helps turn discussions into clear, actionable decisions. The steps below provide a practical roadmap to make retirement planning for couples more organised, balanced, and easy to implement over time.

  • Step 1: Define a Shared Retirement Vision: Start by talking about the life you both want after work rather than focusing only on numbers. This helps align expectations and gives your planning a clear direction.

    Discuss together:
    1. Preferred retirement age
    2. Where do you want to live
    3. Travel and lifestyle goals
    4. What a comfortable monthly budget looks like

Most couples aim to replace about 60-70% of their current income in retirement, but inflation must be considered. For example, a monthly expense of ₹80,000 today could rise to around ₹2.5 lakh in 20 years at roughly 6% inflation.

  • Step 2: Maximise Tax Benefits for Both Partners: Even when earnings differ, both spouses should invest individually to make the most of available tax deductions. This strengthens overall savings and supports independent financial security.

    Key avenues to consider:
    1. EPF: Builds a steady retirement base for salaried individuals
    2. PPF: Each partner can open an account and claim deductions under Section 80C
    3. NPS: Offers an additional ₹50,000 deduction under Section 80CCD(1B)

Using these options effectively can significantly enhance long-term couples financial planning outcomes.

  • Step 3: Avoid the Single-Saver Approach: Relying only on the higher earner to invest can create tax inefficiencies and unnecessary dependency later. A more balanced approach ensures both partners remain financially empowered.

    Instead, consider:
    1. Holding investments in both names
    2. Keeping nominations updated
    3. Maintaining accessible records for transparency

This approach supports financial independence for both partners.

  • Step 4: Choose a Contribution Method That Feels Fair: There is no universal formula for splitting retirement savings; the best method is one that feels equitable and sustainable.

    Common approaches include:
    1. Proportionate contributions: Each partner saves the same percentage of income
    2. Expense-based split: One partner manages household costs while the other invests more
    3. Pooling strategy: Treat income as shared and allocate investments for tax efficiency
  • Step 5: Prepare for Career Breaks: Career pauses for childcare, caregiving, or personal growth are common and should be factored into planning.

    During such periods:
    1. Continue contributions to PPF or NPS
    2. Review savings targets if income changes
    3. Maintain life and health insurance coverage

Even modest contributions during these phases can make a meaningful difference over time.

  • Step 6: Balance Investment Risk Together: Different risk preferences can actually strengthen a household portfolio. If one partner prefers growth-oriented investments and the other is more comfortable with safer options, combining both can naturally create a diversified portfolio.

    For example    , equity mutual funds or NPS equity exposure can provide growth potential, while fixed-income options like PPF or debt funds add stability. This balance supports both partners’ comfort levels.
  • Step 7: Plan for Survivor Financial Security: Retirement planning should also consider how finances will be managed if one partner is no longer present. Preparing for this ensures long-term stability.

    Important actions:
    1. Maintain adequate term insurance
    2. Ensure proper nominations on all accounts
    3. Consider joint holdings where appropriate
    4. Keep an updated will

These steps provide clarity and financial protection for the surviving partner.

  • Step 8: Estimate the Required Retirement Corpus: A commonly used guideline is the 25× rule, which suggests saving 25 times your expected annual retirement expenses, derived from the assumption of a 4% safe withdrawal rate. 

    Couples may also benefit from calculating:
    1. A joint corpus for shared expenses
    2. A minimum individual corpus for personal security

This dual approach reduces dependency risks and strengthens overall planning.

By following these structured steps, couples can create a retirement strategy that balances fairness, flexibility, and long-term stability. With thoughtful execution, retirement planning for couples becomes a collaborative journey that supports both shared dreams and individual financial independence.

Conclusion

Unequal income in a relationship does not have to translate into unequal retirement security. With thoughtful retirement planning for couples, transparent communication, and proportional contributions, partners can create a financial roadmap that supports both individuals and shared aspirations.

The essence of successful couples financial planning lies in recognising that retirement is a joint journey shaped by collaboration, flexibility, and trust. By planning proactively and reviewing regularly, couples can build a future that is not only financially stable but also aligned with their shared vision of life after work.

Glossary

  1. Proportional Contribution: Saving based on each partner’s income level rather than splitting equally
  2. Retirement Corpus: Total savings accumulated to fund post-retirement expenses
  3. Financial Independence: Ability to meet expenses without relying on another person’s income
  4. Safe Withdrawal Rate: The percentage of retirement savings you can withdraw each year without draining your corpus, usually around 4%
  5. PPF: A government-backed long-term savings scheme offering tax benefits, stable returns, and a 15-year lock-in period
glossary-img
Uncertain About Insurance

FAQs

Not necessarily. Many couples choose staggered retirements based on career goals, savings readiness, and lifestyle preferences.

Regular contributions to instruments like PPF or NPS in their own name can create a personal financial safety net over time.

A hybrid approach works well; shared planning with some individual accounts ensures both transparency and independence.

Ideally, once a year or after major life events like a job change, salary revision, or family expansion.    

It can influence contribution levels, but with proportional saving and joint planning, couples can maintain a comfortable lifestyle together.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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