Retiring couples lack agreement on retirement finances and plans

Upset mature couple not talking against white wood

Image: Wavebreak Media Ltd/Bigstock.com

When more than 1000 couples were asked how much they need to save to maintain their current lifestyle in retirement almost half had ‘no idea’. And, significantly, most couples weren’t on the same page about the amount needed.

As a couple preparing for retirement, these are the kinds of things that need to be talked about. For your retirement’s sake and for your relationship’s sake.

Confusion among couples

The survey not only discovered a considerable amount of confusion about retirement finances among couples, but also a lack of information and planning.

More than a third disagreed on the total of their household’s investible assets. In addition, almost half disagreed on the amount of funds needed for retirement. Unfortunately, this disagreement was highest among those closest to retirement—Baby Boomers.

Half of the couples surveyed also disagreed on when they would retire.

Concerns about lack of knowledge

The lack of knowledge by couples is concerning as well: When asked how much they expect to receive in monthly retirement income, more than half (52 per cent) had ‘no idea’. Their top two concerns were: being able to cover unexpected health costs (74 per cent) and outliving retirement savings (51 per cent).

These are valid concerns, but only 2 in 10 Baby Boomers had developed a retirement income plan to see if they could cover their needs in retirement.

It should be no surprise that those who had developed a detailed financial plan were less likely to disagree and felt better prepared for retirement. And couples with a plan in place were twice as likely to expect a ‘very comfortable’ retirement.

Working on a response

This research was done in the United States. Of course, we here in the antipodes may be doing far better than this. I suspect not, but it’s a warning that all couples should heed and work on cutting through any confusion they may have.

There are three basic things to do that can help:

1. Start talking

Begin to talk about your finances and your retirement. For starters: Do you know what your financial position is? What is your thinking about retirement? This is the time to discover where both of you are at because even if you retire at different times, your retirement will impact on the other.

2. Start planning together

Start planning for your finances. You may need to see a financial advisor to help with this. Start planning the timing of your retirement. Start planning what you will do in retirement. What will you do together . . . and separately? You can change your plans, but at least you have started.

3. Start preparing together

What is there that you can do now for your retirement? Planning to be a grey nomad? You can experiment before you retire to see if it’s going to work for you.

As one who has gone through the process of preparing for retirement, I can say that these conversations are important as you work out your own retirement. They also help build the anticipation.

And, in our case, it brought us closer together as we developed and worked on our plan.

I hope that’s what happens for you.

 

Bruce Manners, author of Retirement Ready? and Refusing to Retire, and founder of RetireNotes.com

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Category: Finances, Planning

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