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Data & Research June 29, 2011
Study Finds Disconnect Between Couples on Retirement Issues
The results of Fidelity’s Couples Retirement Study show couples both
approaching and living in retirement are struggling with overall
communication, planning, and management of their retirement finances.
Reported by Rebecca Moore
Less than half of couples (41%) indicated they handle investment decisions for retirement savings jointly. Only 17% are completely confident that either spouse is prepared to assume responsibility of their joint retirement finances, if necessary. In addition, three-quarters (73%) of all couples disagree on whether or not they have completed a detailed retirement income plan.
The study also found 33% of couples either don’t agree, or don’t know, where they plan to retire, and nearly two-thirds (62%) of couples approaching retirement don’t agree on their expected retirement ages. Nearly half (47%) of couples approaching retirement don’t agree on whether they will continue to work in retirement.
The results show that more than half (58%) of couples work with an investment professional, but only one-third (35%) agree they work jointly with that professional.
The study also explored whether couples are involving their adult children in planning discussions about critical topics such as health care proxies, long-term care, life insurance and wills. More than half (55%) report they have had at least some of these discussions with their adult children, yet only 1% of those who have done so said their investment professional was involved. Of those who have not had discussions with their children, one-third (32%) say they either “have not gotten around to it,” or “there is plenty of time left.”Wives Less Involved or Knowlegdeable
Fidelity’s Couples Retirement Study found wives are often not as involved and/or are less knowledgeable about their retirement finances than their husbands.
When asked if they feel confident they could assume full responsibility of their household retirement finances, if needed, only 35% of wives say they are completely confident in their ability to do so versus 72% of husbands. A small percentage of wives (8%) report they are the primary retirement financial decision-maker in their household, compared to 37% of husbands. Further, fewer wives (15%) than husbands (40%) consider themselves to be the “primary contact” with their investment professional.
The study indicates wives generally have a lower awareness of retirement income-related topics than their husbands. For instance, when asked how much money they expect their income sources to generate monthly in retirement, twice as many wives (32%) as husbands (15%) say they do not know.
In addition, wives tend to have a lower risk tolerance and invest less aggressively than husbands. For example, 21% of wives say they are most interested in preserving wealth and therefore willing to settle for lower returns vs. 16% of husbands. In addition, only 5% of wives describe themselves as investors, rather than a spender or saver, versus 20% of husbands.
The 2011 Fidelity Investments Couples Retirement Study analyzed retirement expectations and preparedness among 648 married couples (1,296 individuals). Respondents were required to be at least 46 years old, married and living with their respective spouses and have a minimum household income of $75,000 or at least $100,000 in investable assets. In 2011, 196 retiree couples also were represented in the study, which previously included only couples who had not yet entered retirement.