Planning for Retirement With Your Spouse

By Trilogy Financial

July 2, 2019

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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.

Have you ever had one of those months? The water heater stops heating, the dishwasher stops washing, and your family ends up on a first-name basis with the nurse at urgent care. Then, as you're driving to work, you see smoke coming from under your hood. Bad things happen to the best of us, and sometimes it seems like they come in waves. That's when an emergency cash fund can come in handy. One survey found that nearly 25% of Americans have no emergency savings. Another survey found that 40% of Americans said they wouldn't be able to comfortably handle an unexpected $1,000 expense.^1,2

How Much Money?

How large should an emergency fund be? There is no “one-size-fits-all” answer. The ideal amount may depend on your financial situation and lifestyle. For example, if you own a home or have dependents, you may be more likely to face financial emergencies. And if a job loss affects your income, you may need emergency funds for months.

Coming Up with Cash

If saving several months of income seems unreasonable, don't despair. Start with a more modest goal, such as saving $1,000, and build your savings a bit at a time. Consider setting up automatic monthly transfers into the fund. Once your savings begin to build, you may be tempted to use the money in the account for something other than an emergency. Try to avoid that. Instead, budget and prepare separately for bigger expenses you know are coming.

Where Do I Put It?

Many people open traditional savings accounts to hold emergency funds. They typically offer modest rates of return. The Federal Deposit Insurance Corporation (FDIC) insures bank accounts for up to $250,000 per depositor, per institution, in principal and interest.³Others turn to money market accounts or money market funds in emergencies. While money market accounts are savings accounts, money market funds are considered low-risk securities. Money market funds are not backed by any government institution, which means they can lose money. Depending on your particular goals and the amount you have saved, some combination of lower-risk investments may be your best choice.

Money held in money market funds is not insured or guaranteed by the FDIC or any other government agency. Money market funds seek to preserve the value of your investment at $1.00 a share. However, it is possible to lose money by investing in a money market fund.⁴

Money market mutual funds are sold by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

The only thing you can know about unexpected expenses is that they're coming. Having an emergency fund may help to alleviate stress and worry that can come with them. If you lack emergency savings now, consider taking steps to create a cushion for the future.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

MarketWatch.com, 2020
Bankrate.com, 2021
FDIC.gov, 2022
Investopedia.com, 2021

Long-Term Care Planning Advice

Advanced Care Planning

Jeff Motske, CFP®

August 26, 2018

There is one area of planning that gets glossed over, even by the many responsible people: long-term care planning. For so many, it is difficult to plan for something that seems so far removed from their current existence. Many also assume that their current health insurance or Medicare will cover most expenses associated with long-term care. Unfortunately, these mistakes leave them ill-prepared for the expensive reality.

As the US government estimates 70% of individuals who are currently 65 “will require some form of long-term care”.1 Therefore, this is more of an eventuality for most folks than it is a possibility. When an individual’s health starts to decline, hopefully, multiple levels have been put into place. Not only should you be concerned with who will care for you physically, you must all consider who will care for your finances.

Physical Care –The costs for long-term care can be surprising for many, with the average 65-year-old paying approximately $138,000 over his/her lifetime.2 As mentioned earlier, Medicare or private health insurance rarely covers all types and expenses of long-term care. Medicaid assistance varies by state and requires that an individual “must spend down his or her assets and meet other criteria.”3 Additionally, It is important to talk with your loved ones about long-term care options, not only about what one can afford but equally as important, what one prefers.

Ultimately, many end up paying for long-term care from their own finances – 50% according to the Bipartisan Policy Center report.4 To protect your finances and the finances of your loved ones, it is vital to prepare for these possible scenarios. There are many long-term care insurance policies that can provide you the assistance your particular situation needs. The premiums for these policies are much more affordable the younger you are. While some of these policies can get a bit confusing, a financial planner can easily go over these policies and help you determine which one would be best for your particular situation.

Financial Care – The key to financially protecting a client in declining physical or mental health lies in teamwork. The team, which consists of their financial team members (financial planner, tax professional or estate planning attorney), delegates and medical professionals. While we all continue to focus on our own particular role and duties, maintaining a professional relationship does give us the opportunity to share any concerning or unusual behavior concerning our client, as well as execute things quickly and as close to the client’s wishes as possible. Equally important is a Durable Power of Attorney (DPA), which legally allows an individual to designate someone to make financial and medical decisions on their behalf should they become mentally incapable to do so. Having these safeguards in place can save on time and hassle should health matters deteriorate and allow your delegate to focus on more pressing issues.

When so many of us pride our independence and self-reliance, declining health issues can be downright scary. I understand this well as I do my best to set my clients up for financial independence, so they can create the life they want to live. When circumstances step in and disrupt your life, it’s vital to know that you have people to rely on and safeguards to protect you.

1. https://www.usatoday.com/story/money/personalfinance/retirement/2017/11/17/retirement-planning-should-include-long-term-care-costs/866344001/

2. https://www.usatoday.com/story/money/personalfinance/retirement/2017/11/17/retirement-planning-should-include-long-term-care-costs/866344001/

3. https://www.consumerreports.org/elder-care/elder-care-and-assisted-living-who-will-care-for-you/

4. https://www.usatoday.com/story/money/personalfinance/retirement/2017/11/17/retirement-planning-should-include-long-term-care-costs/866344001/

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