Don’t Let Your Heartstrings Control Your Purse Strings

Retirement is a big deal, and there are a lot of moving components to plan out. Those issues multiply when there is another individual added to the mix. My definition of retirement is the financial freedom to move into the next chapter of your life, and that next chapter is different for everyone –especially spouses! This is not the time to assume the two of you are on the same page or decide that the two of you will figure it out later. Most people know that I’m a big proponent of talking to your spouse about everything financial, and retirement is no exception.  Be sure to take the guess work out of this process so you can enter the next chapter of your life in harmony.

It’s not uncommon for couples to not see eye-to-eye on retirement. About half of couples don’t agree on what age to retire[i]. Less than 10% of surveyed couples retired at the same time[ii]. And 47% disagreed on how much they would need to save for retirement[iii]. With so many areas to disagree, from where to retire to how to spend your days, how do spouses work together to achieve their cumulative goals?

I always like to recommend the couples start off by taking my financial compatibility quiz. Not only does this show the areas you may not see eye-toe-eye on, but the quiz generates a lot of conversations. Continue these conversations at monthly financial date nights to make sure that the two of you continue on the same path towards the same goals. Talk about the details – at what age do you want to retire, how do you want to spend your days in retirement, and how much of that time will be spent together. Keep in mind that most people have spent over 40 hours a week away from their spouse for decades. Retirement frees up all that time, which can be too much “togetherness” for some couples. This is why I like to take my clients through a discussion on “your time, my time, and our time,” well before it is actually time for retirement. Discussing these things in advance can allow you to compromise on issues before emotions flair and make a world of difference between living together happily in retirement or, in worst cases, filing for divorce.

Once you have an idea of what your retirement goals are, you need to formulate a plan. An experienced financial planner can be a great resource at this time, bringing up things you may not have touched on and running “what if” scenarios for you to see how your retirement dreams can be converted into actionable goals. Please start these discussions early because financial independence takes many forms, but you can’t figure out when you’re going to get there until you plan your route.

Marriage is many things, but ultimately, it is a partnership. The two of you work together to move the household forward. You may not always agree, but you find common ground by talking and sharing and compromising. If you plan ahead and plan together, you can find the right way to your coupled vision of retirement.

Take our FREE Financial Compatibility Quiz here.

[i] https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/couples-retirement-fact-sheet.pdf

[ii] https://assets.aarp.org/rgcenter/general/retired_spouses.pdf

[iii] https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/couples-retirement-fact-sheet.pdf

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

“I have no interest in learning about finances. My [husband/wife] takes care of that.”

I have heard this statement from many clients throughout my career, and I understand the sentiment that prompts this response. Human nature has shown that when groups of people come together, they divvy up tasks to different individuals based on their strengths or roles in the group. You see this in many different groups, including families. My wife cooks dinner, and I’m great at taking out the garbage. With my siblings, I’m great at being the peacemaker while my sister knows how to shine a light on different perspectives. These established roles help our family units function smoothly and effectively…

Until one of the pieces of our unit is no longer around.

I’ve seen it far too many times. Clients come in distraught and overwhelmed because they’ve lost a loved one who typically acted as the family’s Chief Financial Officer. Sometimes they don’t know if there is a will or where legal documents are saved. Perhaps they are aware of a family safety deposit box, but they’re not sure where it is or how to access it. They aren’t sure about account balances or how to read statements. They may not even have access to critical accounts because the deceased was the one who knew the passwords. Now they are dealing with grief and heartbreak, compounded by confusion as to what the next steps are for maintaining their family’s financial solvency.

This is why I insist that both parties in a marriage are involved in financial planning meetings and decisions. I also recommend, especially for my senior clients, that other family members or loved ones are aware of the basics of their financial plans. It makes things so much simpler if all important documents, including a list of passwords, are stored together. If security is a concern, there are plenty of third party vendors that will virtually store that information for you. In most cases, though, a virtual safekeeper of your important information isn’t ideal. What is really needed is someone who will help guide your loved ones during that difficult time. That’s when a financial advisor can be an invaluable asset. I have had many Trilogy clients express how relieved they are to know that their financial advisor will be around to guide and assist the loved ones after he or she has passed. At Trilogy Financial, we don’t consider it a job. We consider it an honor and a calling.

There is a saying that it takes a village to raise a child. The truth is, it takes a village to care for anyone. Please make sure that your village is prepared and has the proper tools to take care of you. If you’re not sure where to begin, you may want to meet with a financial advisor. Our Trilogy Advisors are not only trained to assist your family on how to prepare for the future, but will also be there to provide support and service during a difficult and overwhelming time.