Dreaming about retirement with your significant other can be a thoroughly enjoyable experience. Planning for said retirement, however, can be less of a pleasure.
That may be why only about one in five couples has developed a detailed retirement income plan, according to a recent Fidelity survey. Still, planners say that tackling your retirement plans as a couple is key to finding the strategies that will be most successful. “If you’re envisioning your retirement together and you’re on the same page, it can be easier to find money to set aside for that shared goal,” says Marilyn Timbers, a retirement coach with Voya Financial Advisors.
Follow these steps to make sure that you and your spouse are on the same track — and the right one — when it comes to planning for retirement.
1. Start the conversations early. In most couples, one partner takes the role of family chief financial offier, overseeing the investment strategy and making most of the day-to-day money decisions. While that may work fine for the short-term, when it comes to long-term planning it’s important that the couple make decisions together. It’s also important that spouses and partners both understand where they are starting from financially in order to make an accurate plan. More than a third of couples disagree over the amount of their total investable assets, Fidelity reports.
Discussing retirement plans early on ensures that one person isn’t blind-sided by the state of accounts or expected lifestyle down the road. Making retirement planning a joint activity also ensures that if the family CFO is ever unable to carry on that job, the other spouse can step in smoothly. “Even if you don’t want to think about it, one person may eventually have to handle everyone on their own,” says Carina Diamond of SS&G Wealth Management. “When you make your plan, share all your passwords and account information.”
2. Get ready to compromise. Whether you have different views on how much you should be supporting adult children or you’re in disagreement about whether and when to sell the family home, almost all couples will find that their visions for retirement don’t align perfectly.Nearly 40 percent of couples recently surveyed by Voya did not agree or hadn’t discussed where they’d live in retirement, and half of those surveyed by Fidelity disagreed on their exact retirement age.