Married Couples Disagree On Retirement Finances

By Margarita Nahapetyan

Fidelity Investments' second Couples Retirement Study, first time conducted in 2007, has revealed that despite two years of crisis in the economy and financial instability, married couples have done very little in order to improve their communication, planning, and management of retirement finances.

Husbands and wives make vows to stay together in wealth or poverty, but that pledge does not mean they are on the same path when it comes to their finances. The study was carried out online in April by the Richard Day Research firm and focused on a national sample of more than 500 couples with the ages between 45 and 72 years, and whose annual household income was at least $75,000 or who had investable assets of $100,000 or more.

The survey found that just 38 per cent of couples reported that the decisions concerning their retirement finances, they are making together, and only 15 per cent of couples in the survey said that they feel confident that either spouse is ready to assume financial responsibility if one spouse passes away. Sixty per cent of couples do not agree on either the husband's or wife's retirement age, which is up from 56 per cent in the previous 2007 survey. Forty-four per cent cannot agree when it comes to deciding whether they will continue working in retirement or not, up from 42 per cent in the last study. And 42 per cent do not agree whether they will be well off in retirement or just getting by, up from 37 per cent.

The survey found that couples generally agree on the three top unpredictable financial issues in retirement as the most worrisome, with 57 per cent citing health care expenses, a decrease from 70 per cent who agreed on this in 2007; 41 per cent agree that inflation is a worry and has an impact on savings - up from 28 per cent in 2007; and 19 per cent of couples are concerned that their Social Security benefits would be reduced, down from 23 per cent in 2007.

Couples also agree that their expected retirement age will increase by one year-with husbands now planning to retire at the age of 64 years and wives at age 63, and less than half - 49 per cent - of couples expect a comfortable lifestyle in retirement. Meanwhile, 40 per cent of couples said that one or even both spouses plan to continue working part-time in retirement. Also, for some couples, their risk tolerance for their investments has dropped in the times of crisis, with 54 per cent of wives and 41 per cent of husbands reporting that they are less risk-tolerant at this point. But still, 42 per cent of wives and 52 per cent of husbands said that they maintained the same level of risk tolerance for their investments.

Another matter of disagreement for couples appears to be their sources of retirement income. For example, 44 per cent of couples do not agree on whether or not they will need to sell real estate in order to help fund their retirement, 42 per cent do not agree about whether brokerage or mutual-fund accounts would be a source of income, 39 per cent of couples do not agree on whether they own an annuity, and less than 25 per cent of couples know the actual amount of money their annuity will generate for them in retirement.

But the couples may not even be aware of each other's disagreements: 44 per cent of couples agree that they never argue about money, another 32 per cent said they argue about money from time to time. Only 1 per cent said that they have arguments on a regular basis. And still, 22 per cent disagree on how often they argue about money. When asked what is the best financial-management advice they would give to newlyweds, 57 per cent of the couples agreed that it would be "make all financial decisions together."