Robert Warner

Couples: Are You on the Same Page in Financial Planning?

Whether considering marriage, newly wed, or in a long-term committed relationship, most couples recognize that communication and shared goals are key to happiness and harmony. Many couples spend time discussing lifestyle goals such as where to live and work; whether to have children and if so, how many; where to vacation or spend holidays; and more.

More difficult and often not discussed are money and financial goals. And it’s not just about how much you spend. Sharing financial goals and planning are critical to achieving financial security and peace of mind, especially as you approach retirement. Being in tune on finances also might make for a stronger relationship. A 2014 survey by Money magazine, Love + Money, revealed that arguments over money were the leading source of conflict among husbands and wives.

Although many couples believe they are highly skilled in communicating with each other, it’s not always the case when it comes to investing and planning for retirement.

The Fidelity Investments® 2015 Couples Retirement Study, revealed a disconnect among couples in basics such as knowing how much their spouse earns and the amount of their total assets. The study, conducted every two years since 2007, tests communication as well as financial knowledge. The 2015 study expanded on prior studies by including Gen X and Gen Y couples, and non-married couples in long-term relationships, in addition to married couples age 47+. The online survey included couples with minimum household incomes of $75,000 and minimum investible assets of $100,000.


Aligning Your Goals 

Here are some guidelines to help you and your spouse or partner begin or refine your planning, especially as you approach retirement:

Start the conversation  

Talk about the big picture so you can assess whether you both want the same things and how you might be able to adjust if you don’t. This first step is absolutely critical: define your dreams, discuss priorities and set the table. Some advisors suggest couples write a wealth mission statement together, putting into words how they would like to manage their wealth over time.

Ask questions to identify differences or concerns

Each spouse should list questions or concerns; then discuss them together. For example, one spouse might be a saver and the other a spender; one might be more concerned about debt than the other. Even if both spouses are savers, their priorities might vary significantly. This exercise also can reveal areas of worry that either or both spouses were not aware of and will be helpful as you design or adjust your financial plan.

Determine your respective risk tolerances

Financial advisors commonly talk with clients to assess their tolerance for risk. Some couples may want to have each spouse meet individually with the advisor so he or she can conduct separate risk assessments. The advisor then can get a true feel for each individual’s comfort level without influence from a spouse. Surveys often reveal significant gender differences in risk tolerance, with men generally less risk-averse than women. For example, the Fidelity Investments® 2013 Couples Retirement Study revealed that women tend to have lower risk tolerance than men. When asked whether they would be willing to invest a significant amount of money to achieve higher returns if they could lose some or all of their initial investment, only 4 percent of women were willing to take that risk, compared to 15 percent of men.


Identify important goals and priorities

How long do each of you plan to work? What type of lifestyle in retirement appeals to you? Do you want to keep your primary home or downsize? Will you stay put or move to a new city? Will you fund your children’s education, and if so, will that extend through graduate school? Do you have philanthropic intentions? Establishing mutual goals will make your planning smoother, especially if the economy experiences a downturn and you need to adjust. Listen carefully to each other and pay attention to detail. Perhaps one spouse plans to retire early and the other wishes to keep working, which can lead to resentment if you are not in agreement. One spouse may wish to buy a vacation home and the other may prefer to downsize and travel in retirement.

Two portfolios but one couple

It’s very likely that each spouse will have his or her own 401k plan, making it critical to coordinate asset allocation across those separate accounts. As you leave work and proceed through retirement, you might want to consider consolidating accounts where possible and simplifying your finances. Simplifying your portfolio also will make it easier if one spouse is or becomes unable to participate in planning.

Understand your options

Each spouse should have a thorough understanding of his or her options concerning retirement income and benefits with an eye on what is best for the couple. For example, post-retirement healthcare benefits will have a significant impact on your monthly and annual costs, as will options within any pension plan, military or other employer-sponsored defined benefit plans available to either spouse. When to claim Social Security benefits is a major decision, but claiming strategies for married couples can be complicated. Although most individuals can claim Social Security benefits at age 62, you can increase your eventual monthly benefit by as much as 8 percent per year by deferring until you are older. For more information, read our earlier blog post. Once you have evaluated all of the choices available to you in benefits and income, you can determine the best course for your mutual situation.

 Test your plan

Give serious thought to unexpected occurrences and worst case scenarios to help determine whether you have the financial means to cope and still maintain your desired lifestyle. For example, consider whether you are prepared to handle a serious illness, unexpected medical bills and the death of your spouse or moving out of your home because of a natural disaster or because you need assisted living or nursing care.

Plan your estate

Once you and your spouse have thoroughly discussed your financial situation and taken steps to align your priorities and goals, you should create an estate plan if you haven’t already. Having a plan in place helps ensure your finances will be in order for your family and future generations, and assures your and your spouse’s affairs will be handled as you wish. Having an estate plan can also allow you to avoid probate court and make provisions to care for and protect children and other beneficiaries. Our Financial planning blog post has information on how and when to build an estate plan.

Keep each other informed

While one person is likely to handle the paperwork and make changes, make time to review accounts, asset allocations, and results together. Many couples do this quarterly but some may do it annually. Consider changes that might be needed going forward to meet your shared goals. The person who manages paperwork needs to make sure their partner has access to critical information such as account numbers and passwords and where account information is stored.

Most would agree open and transparent communication can help in all aspects of a successful partnership. Committing time to communicating about money can help you make sure your goals are aligned and you are both making choices that support your mutual goals.


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Views and comments expressed in this blog are those of the author and do not necessarily represent the positions of Cleary Gull or fellow Cleary Gull associates.