Why every couple needs to talk about retirement plans together

It can lead to a happier, more secure retirement. Here are five ways to get the conversation going.

03 Jan 2017

A 2014 American Psychological Association survey showed that responsibility for financial decision-making often isn’t shared. And that’s not good, particularly when it comes to retirement planning, says Lynnette Khalfani-Cox, author of Zero Debt: The Ultimate Guide to Financial Freedom and founder of the financial education blog AskTheMoneyCoach.com. “It’s very dangerous for either spouse to abdicate involvement in retirement planning,” she says. “It plays too big a role in your future lifestyle as a couple for both parties not to be involved and informed.”

Part of the challenge is that conversations about retirement touch on so many sensitive facets of life—saving, investing, lifestyle and mortality—that getting started can feel overwhelming. Richard Scarpelli, Head of Financial Planning at UBS Financial Services Inc., suggests breaking the process down into these five steps.

Key takeaways

  • Planning together is essential for a happy retirement.
  • Share your retirement dreams with each other to get started.
  • Discuss your timing, keeping in mind Social Security benefits timing, and easing the transition by staggering your retirements.
  • Be sure to have long-term care plans in place.
  • Discuss and align your savings and investing styles, bringing in your Financial Advisor to help you assess your strategy.
  • Review where your financial and legal records are, so you both have access to essential documents.

1. Share Your Retirement Dreams.

“It’s helpful for couples to start by talking about their goals individually—things like where they want to live and how active they hope to be,” explains Scarpelli.

That big-picture talk will help you get a practical sense of how much you’ll need to save to cover retirement expenses. It also opens a dialogue that many couples find illuminating, notes Dorian Mintzer, Ph.D., a retirement transition coach and co-author of The Couple’s Retirement Puzzle: 10 Must-Have Conversations for Creating an Amazing New Life Together. “There may be a variety of specific challenges to address, such as differences in age, health, energy levels or what ‘retirement’ means,” she says. “For example, is it total retirement from a job, phasing out over time, or using your skills in an encore career or volunteer work?”

2. Discuss Timing

Despite idyllic images of silver-haired couples strolling hand in hand toward a glistening sunset in perfect synchrony, Scarpelli suggests that it may often be better for spouses to retire in different years, whatever their respective ages. “Retirement, like any huge lifestyle adjustment, is stressful,” he explains. Leaving work a year apart can soften the adjustment period. “It also makes more sense from a financial standpoint, since you won’t lose both incomes at once.”

“Retirement, like any huge lifestyle adjustment, is stressful.” – Rich Scarpelli

Social Security should factor into timing. While eligibility for Social Security benefits begins at age 62, each year you delay collection until you reach age 70 boosts your benefit amount. “At today’s life expectancy rates, a healthy person whose parents lived into their 80s will be far better off delaying benefits,” says Scarpelli. He also suggests that couples consult their Financial Advisor and their legal/tax adviser about the best way to maximize Social Security benefits.

3. Plan for Long-Term Care

Happily, retirees are living longer than ever. Yet longevity makes developing a plan for handling healthcare and eldercare expenses even more important. The costs of coping with a lengthy health care crisis can quickly deplete a couple’s savings, leaving the healthy spouse in a financial hole. Your Financial Advisor can help you explore long-term care insurance options to find a policy that may fit your needs.

4. Coordinate Your Savings and Investing Strategies

“In addition to syncing your retirement vision and strategy, it’s a good idea for spouses to be open with one another about their savings habits and investment styles,” says Khalfani-Cox, who suggests couples work with a financial advisor who can help them align their approaches.

A neutral third party can help couples reconcile differences in money management styles and investment strategy, agrees Scarpelli, “For example, you may have a very different risk tolerance than your spouse. An Advisor can work with you to find a balance designed to help your savings grow at a reasonable rate but you’ll still both be able to sleep at night.”

5. Review Your Records

If you haven’t already taken care of the basic estate documents every couple should have in place—a will, medical directives and power of attorney documents—tackling these together is a powerful way to open up the whole retirement conversation. “Having these in place will help the people you love if something happens to you,” says Scarpelli. “A medical directive can spare them from making a tough decision on your behalf, and a power of attorney can enable your spouse to make necessary financial decisions if you’re ever temporarily incapacitated.” You’ll also want to review and update these documents as major life events, such as marriage, divorce or the birth of a child, occur.

“Don’t feel that every detail of your retirement plan is written in stone.” – Lynnette Khalfani-Cox

If one of you does more of the financial heavy lifting than the other, you should also make a point of sitting down together at least once a year to go over basics such as your net worth, where your assets are held and where financial records are kept. “One person can be more in charge, but both should be involved and informed,” says Mintzer. “One of the worst situations is needing to learn about finances at the time of a crisis.” It’s a good idea to loop in your Financial Advisor as well, so both people feel they have access to any support they might need in the future.

Finally, it’s important to understand that your retirement plan will evolve. “Don’t feel that every detail of your retirement plan is written in stone,” says Khalfani-Cox. “Your vision, both as individuals and as a couple, may change. So the important thing is to commit to talking about what you’re thinking and feeling on a regular basis.”

Getting the conversation off to a good start

As noted, tricky spousal money conversations are defused and clarified with the help of an experienced third party. Your Financial Advisor is exactly that, having helped many couples clarify their priorities and find the peace of mind that comes through joint planning.