Howard Hook On Couples Facing Retirement
Much has been written about the financial concerns couples face when they are about to retire. However, one of the most overlooked concerns that couples fail to discuss is how their retirement goals align with each other.
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Problems with couples planning for retirement
People may live together for 30, 40 years, but when it comes to planning for retirement, they sometimes act like they’ve never discussed this part of their life before, and when they finally do they can find themselves 180 degrees apart in how they view it.
Prior to retirement, it is easy to ignore or overlook the conversation. After all, people often have other things on their mind: like work, family, just living day to day. Projecting into the future is not what couples tend to talk about, or at least not a future that is based on reality. After all, life is tough enough for most couples. Why rock the boat before you have to? The problem with this is that all too often the boat has been taking on water for some time, but neither spouse seems to be noticing it.
Retirement can mean different things to different people, even people who have been married and have thought alike for many years.
A husband, for example, may feel that retirement is a time to reward himself for his years of hard work by buying a winter home. Meanwhile, his wife may see it as a time when they need to live a Spartan existence because she’s afraid the money may run out.
Disagreements in retirement planning
Disagreements can typically range, from how risk adverse they want to be, to where they should live, to what their end game is.
One spouse may decide that investing in a small business to stay busy on a part-time basis and kick off some income is a way to go, while the other may feel more comfortable investing that money conservatively. One may view retirement planning as having enough money for the two of them, while the other may consider children and grandchildren as part of the equation. One may feel it essential to invest in long-term care insurance and the other might say they’d rather take the risk. All of these are conversations that are not likely to have come up prior to retirement and now suddenly are extremely important to both spouses.
While many times these issues can be worked through with little problem, other times hard feelings start to develop. Take the case, for example, where the husband wanted to buy a second home while his wife wanted to reduce their living expenses. If the husband worked while the wife raised the family he may find it hard to accede to his wife’s concerns as he may feel that he was the one who worked hard and so deserves the second home. He may fail to recognize that his wife’s contribution to the family was equally as important and difficult and as such may resent her for feeling the way she does.
When this happens, it helps to sit down and have an adult discussion not only about what each other’s goals are, but also to try to empathize with why they chose that goal.
Maybe the wife did not realize how difficult her husband’s job was or the sacrifices he made. Maybe the husband did not realize that his wife gave up her dream of a career to raise her family. Maybe neither knows about life events that occurred prior to their meeting that helped shape their thinking.
While it is nice to think that even hard feelings can be softened by talking about the issues, sometimes that still does not work. It may sometimes be necessary to procure the services of a professional who can serve as both a financial advisor and a “quasi” marriage counselor to help resolve these stubborn issues. He or she can talk through the financial options and listen to the personal issues so that they can agree to move forward together.
Having a financial planner involved to mediate the conversation can also help validate the viability of each spouse’s goals. Telling your spouse that you can afford a second home may come off as self-serving unless it can be substantiated by a retirement projection that shows that, indeed, it makes financial sense. Conversely, if expenses need to be reduced in order to retire comfortably, that can be backed up by a projection as well. Many times, the projection itself may help diffuse the situation and enable spouses to reach an agreement.
Howard Hook, CFP, CPA, is a financial advisor with EKS Associates in Princeton, NJ.