Couples Disconnect on Retirement Plans, Savings and How Much the Other Half Makes

Planning together makes a big difference in retirement preparedness

By Stephen Miller, CEBS Jun 26, 2015

Most couples say they communicate well when it comes to financial matters, but 43 percent couldn't correctly identify how much their spouse or partner makes—and of that, 10 percent were off by $25,000 or more.

Those are among the findings in Fidelity Investments' 2015 Couples Retirement Study, released in June with a related infographic. The survey was fielded in April 2015, with respondents who were at least 25 years old, married or in a long-term committed relationship, and living with their respective partner.

The findings identified a number of critical misunderstandings and knowledge gaps that could undermine retirement preparedness—increasing the financial stress felt by employees as they approach retirement age (and leaving many unable to retire). For instance:

36 percent of couples disagreed on the amount of the household's investible assets.

When asked how much they will need to save to maintain their current lifestyle in retirement, nearly half (48 percent) have "no idea"—and 47 percent are in disagreement about the amount needed. This level of disagreement is highest among those who are closest to retirement, the Baby Boomers (born 1946-64).

60 percent of couples of all ages and almost half (49 percent) of Boomers don't have any idea how much their Social Security benefit might be, even though the information is readily available on the Social Security Administration’s website.

Couples aren't on the same page when it comes to describing their expected lifestyle in retirement—with one in three disagreeing about how comfortable that lifestyle will be.

“We know couples don't always agree when it comes to money, but we were surprised how many missed the mark on the question of their partner's salary,” said John Sweeney, executive vice president of retirement and investing strategies at Fidelity.

Sweeney suggests financial well-being and retirement planning initiatives encourage partners of all ages set aside time to make sure that, in addition to knowing each other’s salaries, they feel equipped to answer questions including:

Do we have a shared vision of what our retirement might look like? Are we looking to travel the globe or simply tend the garden at home? Do we want to downsize and live near our kids or at least live in the house where they grew up, or pack it up and move to a warmer climate? Those answer will shed light on whether sufficient contributions are being made into the couple’s retirement accounts.

Are we prepared for the unexpected? No matter what the couple’s age, it's best to plan for the inevitable, which is why it's important to have discussions around topics such as inheritance, estate planning and elder care arrangements. In addition, designating a beneficiary for workplace retirement accounts and insurance policies can help avoid complications in the event of a death or divorce, or the assets going to probate.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow Me on Twitter.

Related SHRM Articles:

Boosting Younger Workers' Financial Fitness, SHRM Online Benefits, June 2015

Employees Want Help Deciding How Much to Save, SHRM Online Benefits, May 2015

Retirement Plan Education—Take It to the Next Level, SHRM Online Benefits, May 2014

Message to Employees: Saving 1% More Will Boost Retirement Income, SHRM Online Benefits, August 2013

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