Love and Marriage and Retirement

More than 80% of married couples ages 45 to 72 say they don’t agree on when they should retire, what their retirement lifestyle should be like, or whether they will work in retirement, according to a new survey.1

This may not come as a surprise to anyone who is married. The real news is that leaving such basic issues unsettled paves the way for confusion and missed opportunities. Funding a comfortable retirement is challenging enough without adding marital conflict to the mix.

Only 38% reported making decisions together about their retirement investments.2 This could explain why 39% of couples disagreed about whether they owned annuities and 25% disagreed on whether they owned an IRA.3 When a couple pools their financial resources, they should also consider how the union will affect their combined risk tolerance and time horizon. Failing to do so could result in the couple having an improperly allocated portfolio without knowing it.

Forty-two percent don’t agree on the kind of lifestyle they will share in retirement.4 If she wants to move closer to the family and he wants to travel the open road, it will be difficult to determine whether they are saving enough to support their expected lifestyle because they still don’t have an accurate picture of their lifestyle goals.

Sixty percent could not agree on the husband’s or the wife’s expected retirement age.5 Obviously, choosing when to retire is a personal decision, based on health and career factors. But there are other important considerations that relate to age eligibility: Will each spouse begin taking Social Security benefits at 62, or should one or both wait until full retirement age? Will the older spouse’s retirement age affect the younger’s decision about when to tap tax-deferred retirement accounts, which carry penalties for withdrawals before age 59½?

Disagreements are natural in a healthy marriage. But allowing them to go unresolved can needlessly limit financial options and opportunities.

1–2) The Dallas Morning News, July 9, 2009
3–5) AARP, 2009

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.
Randall L. Bliss, CFP®
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