Mars and Venus: Communication in Planning for Retirement
By: Karyn Damschen
Communicating with your spouse when it comes to finances and planning for the future can have a positive impact on, not just your financial well-being, but your relationship.
According to the National Endowment for Financial Education, 31% of Americans admitted that they have lied to their spouses about finances. Financial infidelity can lead to lack of trust in a relationship and can diminish open communication about other things beyond finances. When creating a strategy for long-term financial plans it is paramount that couples share the responsibility and maintain an open dialogue with each other and their financial advisor.
Men and women tend to think differently about many things in life, so it comes as no surprise that the female perspective on financial decision making is vastly different from that of men. According to LIMRA, a global research, learning, and development organization, behaviors in financial planning and financial decisions were starkly contrasted when men and women were compared.
Men who were over fifty were far less likely to share financial decisions with their spouses while women in the same age category included their spouse in the decision-making process a majority of the time. This statistic is rather interesting given the fact that, while only 30% of women who were surveyed were the primary financial decision makers, those in that group were more likely to have undertaken critical retirement planning steps than their male peers.
While women in the study excelled in the planning and organizing aspect, men excelled in two key areas of retirement planning beyond that of the women surveyed. Men were more likely to determine what their retirement income was going to be and more likely to have calculated the amount of investment income and assets they would be able to spend in retirement.
What does this say to us? It appears that the strengths of men focus more on the revenue and women tend to focus on the expenses of financial planning. It also says that teamwork and communication could significantly benefit couples nearing retirement. It is important that couples have shared trust in their relationships with each other and the advisors that might be helping them organize and manage their finances. According to Allianz Life Insurance, 70% of women change financial advisors after the passing of their spouse and that is likely due to the fact that they do not have a familiar or trusting enough relationship with them.
Tasks like determining what your Social Security benefits would be, estimating the number of years your assets will last, creating an expense sheet for retirement, determining health care needs as you age, and creating a strategy to ensure that income would be steady after you move past your career are paramount to having a secure retirement. When these planning steps are overlooked, it can lead to financial challenges and a higher likelihood that your retirement might not end up the way you’ve envisioned it.
Since the strengths and weaknesses in planning are shared across gender, it would be wise to stick your heads together and come up with a shared vision for your financial future. Using your complementary skills will likely increase your confidence in your retirement plans and, bonus, might just bring you closer together.
The bottom line, an honest relationship is a successful one. That goes for your marriage, friendships, business partnerships, and your relationship with your financial advisor. When planning for your financial future, make the journey with your spouse and have a clear idea of your entire financial picture. Ask questions and stay present in the process. It will serve you and your relationship well.