When baby boomer couples vowed to stay together for richer or for poorer, few were thinking about a 30-year retirement that began during a recession. Husbands and wives don’t always agree about their retirement plans, and deflated investments have only made matters worse. A new survey found that married couples are often out of synch when planning for retirement. Here’s a look at how retirement strategies differ within couples.
But I thought I told you to retire. Married couples often disagree about either the husband’s or wife’s retirement age (60 percent), whether to continue working in retirement (44 percent), or the type of lifestyle they expect in retirement (42 percent), according to an online survey of 502 couples released today by Fidelity Investments. The study of married couples ages 45 to 72 with household incomes of at least $75,000 or investable assets of at least $100,000 was conducted in April 2009 by Richard Day Research. Some 157 of the couples also participated in a similar 2007 study. Another major disagreement was about sources of retirement income, especially the expected sale of real estate (44 percent), brokerage or mutual fund accounts (42 percent), and annuities (39 percent). Only 15 percent of the couples are confident that either one is prepared to assume financial responsibility of the retirement finances if the other passes away, down from 21 percent in 2007.
Honey, let’s buy while the market is down. Nothing exasperates money disagreements quite like having less money. The recession has made financial disagreements even worse. Yet, men and women appear to be coping with investment losses differently. More husbands than wives say that their initial gut reaction to the market turmoil was to stay the course (73 percent versus 64 percent). After careful consideration, 52 percent of men and 42 percent of women have maintained the same level of risk tolerance, while 54 percent of wives and 41 percent of husbands sought refuge from the market turmoil. Men were also more likely than women to see the market decline as an opportunity to take on more risk (7 percent versus 4 percent). “One member of a couple wants to stay the course and the other one is thinking we just need to get out and sell all our investments and hunker down and invest in safe things,” says Jon Skillman, president of Fidelity Investments Life Insurance Company. “Any time you experience a financial pressure, perhaps with one spouse being unemployed or people being responsible for the care of their parents, you’re probably likely to experience flash points of disagreement on things.”
[Check out these 7 Tips for Retiring With Your Spouse]
Well, at least we can agree on one thing. Couples do seem to agree on the biggest retirement challenges they are likely to face. Unexpected health care expenses topped the list of worries that couples share (57 percent) followed by inflation (41 percent). “Nobody feels secure right now because we have seen a huge evaporation of wealth and it isn’t going to come back any time soon,” says Judy Lau, a certified financial planner and president of Lau Associates in Wilmington, Del., who is not affiliated with the Fidelity study. “We’ve been telling people to just plan on working longer because they are going to need more time to top off their portfolios before they retire.” The average expected retirement age was 64 for the husbands and 63 for the wives, both up one year since 2007, Fidelity found. About 40 percent of the couples reported that one or both spouses will continue to work part-time in retirement.
This is what we should have done differently. Just because you don’t agree with your spouse about money matters, doesn’t mean you can’t dole out financial advice to newlyweds. In fact, baby boomers with seasoned marriages are in a great position to point out money discussions young couples should have. Most of the baby boomer married couples agreed that making all financial decisions together was the best advice they could offer (57 percent). Other top pieces of advice for newlyweds were to make a budget and stick to it (34 percent) and make sure you have an emergency fund to cover at least 6 months of expenses (29 percent). Some financial cautions, while recommended less often, provide insight into the money issues many of these baby boomer couples faced. Tips for the newly married also included: Don't hide expenditures from each other (16 percent), disclose your income, debts, and assets to each other before getting married (14 percent), set up a joint household account and individual accounts for personal spending (4 percent), watch your pennies and the dollars will flow (4 percent), and designate the most financially knowledgeable spouse as the financial decision-maker (3 percent).