If your household is anything like mine, couples often divvy up jobs and responsibilities to make sure everything gets done, and everyone’s needs are met. Maybe one spouse works, and the other takes care of the kids. Maybe one spouse handles the meals, and the other handles transportation to lessons and practices. Maybe one spouse takes care of the yard, and the other takes care of home repairs.
Maybe one spouse handles all the financial decisions … And that’s what I want to talk about today.
At Keen Wealth, one point we emphasize to couples is that they should attend meetings with their financial advisor together. If you’re in a committed, long-term relationship then retirement planning is not a one-person responsibility. Couples needs to be on the same page, and engaged in the process together. Here are five big reasons why:
1. Aligning your spending habits.
When retirees transition from a regular paycheck to living off savings and investments, many find that, for the first time in their lives, they need to commit to a spending plan. For couples, this often requires that both people analyze spending habits and attitudes about money that may have gone unnoticed when all the bills were set to autopay and the next paycheck was just two weeks away. Some retirees worry about running out of money. Others want to cash in that hard-earned nest egg and see the world. This kind of disconnect is a common source of conflict, and retirement stress. Worse, studies show that “grey divorce” is higher among couples who do not communicate about their finances. Sorting through differing attitudes towards money with the help of a financial advisor can create a retirement plan that will make both people happy and fulfilled.
2. Understanding market volatility.
The stock market is a powerful investment tool that, viewed through a wide lens, trends up and creates wealth. But that doesn’t mean the market doesn’t fly through some turbulence. If one person handles all the financial decisions, the other person might panic during a bumpy patch, or mistake a measured, long-term investment strategy for gambling with the family’s future. Couples need to understand that investing involves risk, and that being on the same page with strategies for getting through turbulence is a key factor to long term success. At Keen Wealth, we steer our clients away from all-in and all-out market-timing and, instead, use pre-determined, asset-allocated and diversified portfolios that are rebalanced within agreed upon intentional parameters. This strategy provides flexibility to adjust investments when necessary and can take the surprise factor out of navigating through difficult times – both personal and economic.
3. Planning your days.
When they’re working, most couples spend eight hours or more apart every day. Then they retire, and suddenly, they’re together all the time. How that time is going to be spent can be another source of conflict, and stress, if couples don’t agree on what their retirement is going to be like. Most happy retirees find ways to stay active, whether that means a part-time job, volunteering, or indulging in passions and hobbies. Whether you are nearing retirement or are already retired, continuing to plan with your spouse about what your day-to-day life is going to look like going forward can be empowering. What are things you want to do together? What are things you want to schedule separately? What are some big bucket list items you finally have time to tackle?
4. Knowing who to call.
There are few things in life more difficult than dealing with the death of a loved one, especially a spouse or partner. But a good retirement plan includes legacy planning, and what happens in the event of incapacitation. In those circumstances, you don’t want the bereaved struggling to get in touch with someone he or she has never met on top of everything else. The more familiar and comfortable couples are with their legacy plan, and the financial advisor who will help execute it, the easier this hard time will be. And the more open with each other couples are about how they want to provide for children, grandchildren, and any beloved charities, the more powerful and positive that legacy will be.
5. Knowing who to trust.
We’ve covered the difference between the fiduciary and suitability standards a lot recently, in part because it’s been a hot topic in the news. But also, it’s just so important that couples understand who is managing their money, and to what ends. A broker or advisor who only clears the low bar of suitability is not required by law to put your interests ahead of his or her own. Keen Wealth adheres to the fiduciary standard, meaning our clients always come first. Together, ask your advisor which standard he or she practices, and if necessary, review the terms of your engagement.
If you’re the one who handles the finances for your household, I hope you’ll share this article with your spouse or partner before your next meeting with your financial advisor. Get this conversation going, get on the same page about retirement, and plan for your future they way you’ve done everything else that’s important in your life: together.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 24 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
Keen Wealth Advisors is a Registered Investment Adviser. Nothing within this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Keen Wealth Advisors manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed here. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.