The traditional model of retirement - working at the same career, even the same company,…
Surveys show money is among the top issues that couples argue about. These disagreements often arise when couples have different ideas about how money should be spent. As couples approach and enter retirement, these arguments can become more intense. Here are some suggestions for avoiding fights over money.
Retirement is typically already filled with uncertainty and stress, and differing views about how to spend, how much to spend, and how much risk to take with retirement savings can lead to arguments. There may also be added pressure over taking care of adult children, grandchildren, and other relatives.
A recent survey by Fidelity Investments of over 1,000 couples found that 47 percent disagreed about the amount they would need in retirement. Of couples who said they argued over money, about one in five said they argued about saving for retirement.
Another poll by Harris Interactive indicated that fights about money happened more frequently among older couples. While only 15 percent of couples between 18 and 34 years old said they argued over financial issues, more than one-third of couples age 55 to 64 admitted to having money fights.
Disputes over money often arise when couples are unsure of how much they have and what they will need. In the Fidelity survey, 48 percent of the couples said they had “no idea” how much they would need to save to maintain their current lifestyle in retirement. Other disputes arise when couples disagree over priorities for spending and saving.
Couples who can’t agree about money will have difficulty “sorting through and tackling important issues together around the next big milestones in their lives, such as how and where to spend retirement and later-in-life issues involving elder care and estate planning,” says John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity.
Here are some ways to help couples get over arguing and start planning together.
Communicate. Often, being transparent about finances and financial goals can open channels of communication, and help identify areas of disagreement. When couples who don’t know each other’s incomes and spending priorities, that can lead to arguments. A recent Fidelity couples retirement study found over 40% of respondents didn’t know how much their partner earned, and 10% were off by $25,000 or more. Additionally, 36% of couples didn’t agree on how much investable assets they had.
Sort through disagreements. Disagreements over spending priorities are normal, and should be worked through. “It’s very common for couples to not be on the same page,” says Stuart Ritter, a financial advisor at T. Rowe Price. “Understand why something is important to your partner, and understand why it’s important to you,” he says. “From that understanding, make the decisions and trade-offs that let you both feel comfortable.”
Be willing to compromise. As with all disagreements, often a compromise solution, which both parties can accept, is best. A common situation is when one person is ready to retire and the other isn’t. One person can then choose parttime work or commute periodically to be near the other person.
Seek help. An experienced financial advisor can help a couple sort through their financial issues and suggest insights and avenues they might not have thought of. They can also help couples develop a plan for retirement. Couples who entered retirement with a plan were twice as likely to expect a “very comfortable” retirement, according to the Fidelity survey.
See this short CNBC video for some other tips.