Making the Most of Married Clients’ Assets and Income Streams

"It all becomes more complex, but more flexible due to different ages and different required minimum distribution dates," Corso adds.

For instance, a female client's husband might start drawing down his 401(k) at age 70 ½ (or earlier, in order to reduce overall tax liability). If your client is four years younger than her husband, she'll have four more years to rely on other assets, saving her own 401(k) for the years she's likely to live beyond her husband. Because she files taxes jointly with her husband, they can both minimize liability and maximize reward.

Social Security coordination

In addition to retiring early, 83 percent of married women also file for Social Security benefits before their full retirement age – often at the same times as their husbands file. While delaying benefits can net a client a maximum 32 percent lifetime credit, collecting at age 62 reduces benefits by 25 percent.

That's a tough hit for one spouse to take. If both collect early, they'll have to draw down their assets that much faster. Fortunately, couples can leverage one another's benefits to draw income early on while still reaping the benefits of delaying.

"There used to be the file and suspend strategy, but that ended in 2015," says Piershale. "Couples can still coordinate benefits with the restricted application, but it's more like file and take." Most useful for couples in which the main breadwinner is older, the restricted application allows the higher-earning spouse to file for a spousal benefit while their own benefit grows.

"If someone delays Social Security to 70, they'll need to take more income from their investments up front," Piershale reminds. That's a tough pill for many retirees to swallow, but given Social Security's lifetime payout, it tends to work out better in the long run – particularly for women, who live longer and face greater healthcare and long-term care costs later in life.

Titling and benefits

Finally, couples must make sure their assets are titled in a way that doesn't harm one party when the other passes away.

"Wives and husbands should both be familiar with the titling on their accounts, and they should make sure there are beneficiaries on all IRAs, pension plans and other assets," says Piershale.

Under the Employee Retirement Income Security Act of 1974, 401(k)s are automatically passed on to surviving spouses. The same is not true for IRAs, which go through probate if no beneficiary is designated.

Remarriages and blended families can also complicate matter: Pensions earned during a marriage are generally considered joint assets, but state divorce courts ultimately determine their fate. Whether a remarried couple can change anything before they retire or not, it's important they find out for sure which assets are fully their own, which ones must be shared and which should have their beneficiary designations made concrete.

Goal-based planning

Ultimately, your married clients' decisions should be contingent upon their goals.

"Lots of what we do is goal-based planning," says Corso. "What level of income do you want, when do you want to retire, what do you want to do in retirement and what kinds of colleges do you want to fund for your kids and grandkids?"

Of course, nailing down those goals requires input from both husband and wife, and both should be involved in the plan from the beginning.

"If you're only gathering information from one of two parties, the other doesn't really have much say in designing the plan," Corso adds. "We've always felt that if both spouses are actively engaged, the likelihood is both spouses will end up happier with their outcomes."