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5 Mistakes Couples Make When Planning for Retirement

Steps you can take to avoid disagreements over spending and much more

high angle of a couple headed in different directions with a diverging line of footprints trailing behind

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En español | You've looked forward to retirement for decades — the chance to slow down the pace, to live in a different place, to see parts of the world you've only dreamed of, to spoil the grandkids just a bit.

But if your spouse or partner has a different vision, if you don't agree on financial issues or avoid them completely, then conflicts are inevitable. Left unattended, these problems may become so serious that they threaten your relationship.

A survey of more than 1,000 individuals by The Cashlorette, a website owned by Bankrate.com, showed that 48 percent of those who were married or living with a partner admitted that they had such fights. Most involved spending habits, dishonesty about money, and a lack of agreement about who should pay which bills, forgetting to pay an important bill, or financial priorities. A 2018 study by TD Ameritrade showed that 41 percent of divorced Gen Xers and 29 percent of divorced boomers said they ended their marriage due to disagreements about money. Here are five mistakes couples make when planning for retirement.

1. Not talking about money

Experts agree that talking through money issues carefully will give you a better chance of clearing up any misconceptions and keep your relationship on solid ground. You may think you're in agreement, but the opposite may be true.

Lili Vasileff, a certified financial planner at Wealth Protection Management in Woodbridge, Connecticut, and president of the National Association of Divorce Financial Planners, says couples don't always agree on when to retire, whether to support adult children and how much leisure spending is the right amount.

Couples may often differ when it comes to deciding how to spend extra money, says Matt Stephens, a certified financial planner (CFP) at AdvicePoint, in Wilmington, North Carolina. “Sometimes the spouse who wasn't the primary breadwinner doesn't speak up,” he says. “We try to help by asking open-ended questions and making sure both spouses offer input. Fairly often one spouse is surprised to hear an answer from the other, since it never came up in conversation at home."

Here, financial advisers from across the country offer their advice for dealing with a variety of common retirement-related money issues.

2. Not sharing details

Confusion often occurs when the bill-paying spouse does not tell the other spouse how they're handling payments, says Jorie Johnson, a CFP at Financial Futures in Brielle, New Jersey. It can be a nightmare when the non-bill-paying spouse has to take over.

Also, says Sarah Carlson, a CFP at Fulcrum Financial Group in Spokane, Washington, one partner may assume the other person knows what is going on, when they don't. “If talking about your current situation and future financial goals is a challenge, consider hiring a financial planner to help you bridge differences, and feel supported in that communication,” she says.

Lack of communication can really sting after the death of a spouse. Sometimes, the wife has no idea about the couple's finances. Then, upon the death or disability of the husband, she must learn quickly, says Patricia Hausknost, a CFP in Long Beach, California. Sometimes the husband purposely does not involve the wife, or she does not want to know. “The husband must make sure the wife is knowledgeable about their financial situation, and provide a document that tells her who to get in touch with — their insurance agent, CPA, banker, attorney and others — in the event that something happens to him,” she warns.

3. Not agreeing on investment strategy

Just as it can be hard to agree on the new paint color for the living room, couples may also differ on how to invest their retirement portfolio, says Sandy Adams, a CFP at the Center for Financial Planning in Southfield, Michigan. So it helps to open a dialogue about the overall financial plan — what they can afford to spend with the resources they have, and how aggressive or conservative they can or need to be, considering the long term. “Often clients come to agreement once they actually have the opportunity to think about their future retirement — which they may not have given much thought to,” Adams says.

In that respect, Carlson finds that older people can be too cautious. Couples need an overall plan that's tied to their time horizon and risk tolerance. “Your investments need to be diversified and balanced, more now than ever,” he says.

What's more, it's not unusual for the person who has made the investment decisions to want to stick with them, says Nate Wenner, a CFP at Wipfli Financial Advisors in Minneapolis. As a result, “the portfolio may not be terribly diversified, or a little outdated, leading to risks, some of which the couple is not fully aware.” The other spouse may want to diversify or update the portfolio to put them in a somewhat safer position. “It's important for neither spouse (or the adviser helping them) to be judgmental, but rather be matter-of-fact about the current state, and the needs and comfort level of each spouse,” Wenner says.


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4. Helping the next generation — or not

Then there's the question of family — one partner does not want to take care of the children or grandchildren and the other does, Hausknost says. But the would-be retirees need sufficient income and assets to last both of their lives. “If there is money at the second death, then you can take care of the next generation. The best way to resolve this is for the couple to understand what they have, and that it will be enough.”

In addition, spouses may disagree about what's to be done with their funds once they've died, warns Marisa Bradbury, a CFP at Sigma Investments in Lake Mary, Florida: “I see it a lot in second marriages, where each spouse has children from a prior one, and things might not be equally divided. Or children can have different needs monetarily, and their parents have different definitions of what is fair. I work with clients to have the tough conversations, and then involve the estate attorney to make sure things are set up according to their wishes."

5. Accepting the effects of aging

Hausknost points out still another scenario: The husband or wife exhibits dementia, and the healthier spouse takes care of the other, rather than considering assisted living. But if the healthy spouse dies first, the surviving spouse is unable to handle things. “Eventually, one of the children takes responsibility for caring for the surviving parent,” she says. “Or, the children may make a group decision to place the parent in a facility. Having frank discussions with your children and planning for care in later life are important to avoiding family discord.”

Right now, Neal Van Zutphen, a CFP at Intrinsic Wealth Counsel in Tempe, Arizona, is working with a couple that would benefit from assisted living: “They are both experiencing cognitive decline, and are getting assistance from children. But the burden is creating significant caregiver fatigue. They are choosing to ‘die in their home’ because they don't want to spend the money to make their final years better. Part of the problem is that they are no longer capable of seeing what others see. They could easily afford to move.”

For older spouses, “look for red flags like bills not being paid or being paid twice,” says Patti Black, a CFP at Brideworth Wealth Management in Birmingham, Alabama. She suggests putting yourself in your spouse's place and proceeding in a way that allows them to retain their dignity and some level of control.

Work as a team

In the end, says Carlson, couples often live lives that are too separate financially. “Take the taboo out of the money conversation, and there is an opportunity to build intimacy by creating a life map of financial goals. I recommend having a ‘money date,’ perhaps a dinner at a nice restaurant. Make it romantic, so you will look forward to those dates in the future.”

Patricia Amend has been a lifestyle writer and editor for 30 years. She was a staff writer at Inc. magazine; a reporter at the Fidelity Publishing Group; and a senior editor at Published Image, a financial education company that was acquired by Standard & Poor's.

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