Have you ever had a disagreement with your husband, or wife about money?
Have you ever bickered about a big financial decision, or your investments?
Money is the #1 issue that couples fight about.
It’s the elephant in the room that could create even bigger problems!
Below are 5 critical questions that every couple must answer to get on the same page.
How will you spend your money in retirement?
You may have one thing in mind, but your spouse has another. This can be dangerous. What do you plan to do as a couple? What do you plan to do on your own? Figure this out now, before it’s too late.
Make a detailed budget, and stick with it. What money is coming in, and what is going out? How much income do you have versus savings.
Remember, one will live longer than the other, and is likely to have steep health care costs later in life. Take everything into account.
How much risk are you willing to take?
Asset allocation/diversification remains to be one of the critical pillars of retirement planning. A properly diversified portfolio – one that mirrors your appetite for risk – could help protect you in any kind of market downturn.
Are you on the same page with your spouse about how much risk you should be taking? This is a trouble spot with nearly every new couple we meet. They have different ideas on how they should be invested.
Show me someone who got crushed in the 2008 financial crisis, and I’ll show you someone who didn’t have a diversified portfolio.
Most clients we see are in one of two camps … they’re either taking on far more risk than they realize, or they’re taking on far more risk than they need to at this stage of the game. Is potential upside that’s left in the stock market worth the downside risk?
How will you claim your social security benefits (with both of you in mind)?
Social security remains to be one of the critical pillars of retirement planning. This is the foundation of your income plan.
DON’T claim your benefits without considering survivor and spousal benefits. The rules have changed for how and when you can use these strategies to your benefit. And you could make an irreversible mistake if you don’t know what you’re doing. The only way to know for sure is with a social security analysis. Because every couple’s situation is different.
Most Americans take their social security benefits at face value. And they wind up leaving tens of thousands, if not hundreds of thousands of dollars on the table.
The questions as to how or when to claim your benefits is more complicated than you think. This decision could trigger an avalanche of unexpected taxes, and send your Medicare premiums through the roof. It could also cause you to forfeit additional benefits that are rightfully yours. So the money you were counting on to help support you in retirement, could be a fraction of what you thought it was going to be.
What are your life expectancies, and how do you plan for that?
Today, people are living well into their 80’s and 90’s. And it’s not uncommon to know of someone who is 100+ years old. In fact, some seniors aren’t just surviving in their older years, they’re thriving. And the statistics keep improving every year.
The longer you live means the longer you have to make your money last in retirement. And women live longer than men, so your plan should take that into account.
Today, there are more than 300,000 “centenarians” in the world. And that number is projected to grow to 2.2 MILLION by the year 20-50. Which is just 30 years from now.
Women live longer than men. In fact, 85% of centenarians … are women! And because of this, 90% of women will be solely responsible for their own finances at the end of their lives.
How will you pay for health care (and long term care)?
Don’t forget about healthcare and long-term care
You need to ensure that a health issue with you or your spouse, doesn’t turn into a financial catastrophe.
According to different sources, a typical 65-year-old couple can expect to spend North of $250,000 on healthcare and medical expenses in retirement (that’s not covered by Medicare)
Don’t think you’ll need long term care? According to Forbes, “Nearly 70% of all people who live to age 65 will require some form of long-term care … (and the expense is staggering!
Couples ought to think and plan for retirement differently than single folks do. By making retirement decisions with a joint outcome in mind, money can last longer and both spouses can look forward to a more secure retirement.