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I frequently say in this space that advisors shouldn’t be in the business of marriage counseling and when it comes to related advice, I’m single, so what do I know?
All of that said, advisors and married clients know that finances gone awry can cause marital problems or worse, divorce. There is some good news in that many couples don’t readily assign blame to their partners when times get hard financially speaking.
And while data suggest there’s actually significant between spouses when it comes finances, there’s also work to be done on the retirement front. Retirement disagreements, which fortunately are avoidable, are all the more important at a time when so many baby boomers are leaving the workforce. That puts some burden on couples to start having retirement conversation before it’s too late and it can’t hurt for advisors to light that particular fire.
Be Proactive With Couples’ Retirement Planning
The Ameriprise Couples, Money & Retirement survey, which polled more than 1,500 American couples with $100,000 or more in investable assets mostly in the 45-70 age range, confirms that many marred haven’t talked about estate and retirement planning.
“Nearly one-quarter (24%) of those surveyed say they haven’t come to an agreement on how much money they will need to save for retirement – or how much they should spend on children and grandchildren, both today and as part of their estates. A similar percentage say they have different estimates of how much money they will spend on hobbies and travel in retirement (25%) and how much they’ll spend on their lifestyles in general (22%),” notes Ameriprise.
What’s interesting is that while many couples aren’t actively discussing retirement issues, they do discuss when they will stop working. Many even go so far as to ensure they don’t retire simultaneously and others stagger when they take Social Security.
Those are encouraging points, but they don’t allot for “x factors” – scenarios in which one or both members of a couple unexpectedly delay retirement or get there sooner than expected. The good news is that many couples view themselves are somewhat ready to retire.
“Expectations aside, the Ameriprise study confirms that people aren’t always in control of their retirement date,” adds Ameriprise. “Nearly one-third (31%) of retirees surveyed said they stepped away from the workforce because of an unexpected circumstance (e.g., health, layoff, or early retirement package). More than half (51%) chose to retire because they achieved a money or life milestone. Regardless of the reason, nearly all retirees (92%) were at least somewhat ready to retire, with six in 10 (60%) saying they were completely ready.”
Procrastination Can Wreak Havoc
“Don’t put off until tomorrow what can be done today” is an old saying and one that’s highly relevant when it comes to the intersection of marriage and retirement. There are no rewards in delaying the retirement conversation, but there are potential problems on the homefront.
As Ameriprise points out, lack of financial/retirement communication among couples can lead to feelings of being disconnected and that opens up a whole other negative can of worms.
“Feeling disconnected from their partners may help explain why some have chosen to hide certain assets. One in seven (14%) of the survey’s respondents admitted they have an account that they have kept secret from their partner. Half (51%) said the balance is more than $10,000, while nearly a quarter (24%) said it’s $50,000 or more,” according to the asset manager.
Bottom line: advisors have plenty of married couples as clients. They’re likely to appreciate you checking in on their retirement readiness and continuing to assist with those goals.