Couples Disagree About Retirement Plans

Married couples often differ about when to retire and where to live.

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Married couples don’t always agree about when to retire or what they will do once they leave their jobs. Even fewer spouses agree about how they will fund retirement.

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The majority of married couples approaching retirement (62 percent) disagree about their expected retirement ages, according to a Richard Day Research survey of 648 married couples ages 46 to 75 commissioned by Fidelity Investments. Nearly half (47 percent) of the couples approaching retirement have differing opinions about whether they will continue to work in retirement and a third have dissimilar views about where they will live in retirement.

All of the 1,296 individuals surveyed have a minimum household income of $75,000 or at least $100,000 in investable assets. But despite being better off than the typical American household, over half (55 percent) of the couples disagree about what their top source of retirement income will be. And 73 percent of the spouses surveyed provide divergent answers about whether or not they have a detailed retirement income plan.

Husbands and wives often have different priorities for their retirement finances. Less than half of the couples (41 percent) report making investment decisions for retirement jointly. And only 17 percent of the spouses surveyed are completely confident that either spouse is prepared to assume responsibility of their joint retirement finances.

Wives generally have lower risk tolerance and invest less aggressively than their husbands. For example, 21 percent of wives are most interested in preserving wealth at the expense of lower returns versus 16 percent of husbands. Wives are also more willing to admit what they don’t know. Over twice as many wives (31 percent) as husbands (15 percent) say they do not know how much money they expect their income sources to generate monthly in retirement. Both husbands and wives concede that they don’t know what major health care expenses will cost, how much inflation will erode their savings, and whether Social Security benefits will be reduced.

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Men are generally more likely than women to take the lead on their household’s retirement planning. Just 35 percent of wives say they are confident in their ability to assume responsibility for household finances if required to do so compared to 72 percent of husbands. And over a third (37 percent) of husbands think of themselves as the primary retirement financial decision-maker for the household, compared to just 8 percent of women who say the same.

Most of the spouses surveyed say they have argued about their retirement finances. Some 71 percent of the couples agree on how frequently they argue about money, with 41 percent saying they never argue about retirement. Among couples who do have financial disagreements, the most common ways of resolving the conflict are discussing it until they reach a compromise (39 percent), one spouse persuading the other to change their mind (6 percent), or simply not arriving at a solution (9 percent).

However, most couples (72 percent) agree about whether or not they plan to pass on money to their children or grandchildren. Some 43 percent of the survey respondents say that leaving a legacy to heirs is a goal, while 29 percent of couples have agreed to not leave money behind. Only 28 percent of couples disagree about estate planning. About half (55 percent) of the spouses have also discussed these financial plans with their adult children.

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Many of these older couples say they have acquired some financial wisdom that they wish to pass on to the next generation. Their top three pieces of financial advice for newlyweds are to make all financial decisions together, make a budget and stick to it, and create an emergency fund to cover at least 6 months of expenses.

Twitter: @aiming2retire