How Couples Screw Up Retirement Planning

41689841_sIn theater, a play for two actors is known as a two-hander. Well, for couples, retirement planning should be a two-hander, too. Turns out, according to a new NerdWallet survey, one hand doesn’t know what the other is doing.

NerdWallet and Harris Poll interviewed more than 1,800 Americans in a relationship — ones who are either married or living with a partner.  A third said that neither they nor their partner is saving for retirement. That’s depressing.

But the findings are even more disturbing among couples where at least one partner is doing so. They show how little communication is going on.

“You’re in it together. This is not a solo endeavor,” said Dayana Yochim, a NerdWallet investing specialist. But the survey seems to indicate otherwise:

  • Of the 36% who said their partner is saving for retirement, about one in five (23%) don’t know how much the partner is contributing to retirement accounts.
  • Roughly the same percentage (21%) don’t have a general sense of the total value of the partner’s retirement account. Similarly, 21% who are saving for retirement say their partner doesn’t know how much they (the ones who are saving) are contributing to their retirement savings.
  • 30% of respondents with at least one partner saving for retirement don’t talk to the other about how much money they will need to retire.

What’s going on here? Or, more to the point, what isn’t and why aren’t couples talking with each other about planning for retirement?

The Verdict: Retirement Planning Is Not a Straightforward Topic

“Retirement planning seems like a straightforward topic, but it’s anything but. It’s riddled with emotional subtext, based on past experiences, unspoken expectations and how money was handled or talked about growing up,” said Yochim. “It’s so hard to know where to even start the conversation.”

The lack of communication isn’t, however, about financial secrecy, keeping an account hidden from a spouse or partner or financial infidelity. (A May 2016 Harris Poll for the National Endowment for Financial Education found that two in five Americans with combined finances lied to their partner or hid information about money.)

Absence of Malice

No, the reluctance to talk about retirement planning “isn’t being done out of malice,” said Yochim. This absence of malice is really a combination of silence and ignorance.

When couples’ conversations about retirement do happen, the survey said, they tend to be around the non-financial parts of retirement. They’re about where will we live and what will we do. Yochim calls this “the fun stuff.” About three-quarters (76%) of respondents where at least one person in the couple is saving for retirement said the couple has talked about such “general retirement planning issues.”

But “when it comes to crunching the numbers and getting a realistic snapshot of where they are financially, the numbers drop off dramatically. It’s like the conversational third rail,” Yochim said.

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