Couples Fail to Talk About Retirement Goals, Fidelity Finds

Couples approaching and even already living in retirement are struggling with communication, planning and management of their retirement finances, Fidelity Investments found in a May 2011 survey of 1,296 husbands and wives.
 
Only 41% of couples handle their investment decisions for retirement savings jointly, and only 17% are completely confident that the other spouse will be able to assume responsibility for their joint retirement finances if necessary. Thirty-three percent of couples either don’t agree or know where they plan to retire.
 
And 62% of couples approaching retirement do not agree on their planned retirement age. Nearly half (47%) of couples approaching retirement don’t agree on whether they will continue to work in retirement, and 73% don’t agree on whether or not they have completed a detailed retirement income plan.
 
The study also found that wives are often not as involved or as knowledgeable about their retirement finances as their husbands.
 
Only 35% of wives said they were completely confident they would be able to handle their finances individually if necessary, compared to 72% of husbands.
 
A mere 8% of wives said they are the primary retirement financial decision-maker in their household, compared to 37% of husbands. And only 15% of wives say they are the primary contact for their investment professional, whereas 40% of husbands say that they are.
 
When asked how much income they expect their retirement savings to generate, 32% of wives say they do not know, compared to 15% of husbands.
 
And wives have different investment objectives than their husbands, with 21% of women saying they are more interested in preserving wealth, compared to 16% of husbands. In addition, only 5% of wives describe themselves as investors, rather than a spender or saver, versus 20% of husbands.
 
Further, while 58% of couples work with an investment professional, only 35% agree that they work jointly with that professional.
 
“Millions of American couples have worked very hard to save for retirement,” said Kathleen A. Murphy, president of personal investing at Fidelity. “However, far too many don’t take the time, or have the comfort level, to jointly discuss their plans for the future. To ensure alignment between spouses and the best course of action, couples should sit down long before they retire to discuss key financial topics, such as when they plan to retirement, where they want to live, whether they plan to work and what lifestyle they hope to enjoy.”
 
Once those steps are taken, Fidelity recommends that couples focus on their finances, starting with evaluating their essential and discretionary expenses and comparing them to their savings and anticipated sources of incomes, including Social Security and pensions.
 
“It’s essential that both husbands and wives have a voice in setting and achieving financial goals and that each is comfortable asking questions and providing input on key decisions,” Murphy said. “This is particularly important for wives because they tend to outlive their husbands and likely will need to manage their finances on their own, or work with an investment professional, later in life.”