Retirement planning
Couples anticipate retirement in different ways. One partner may embrace volunteer work or travel while the other looks forward to simply basking in a work-free environment.
Factors such as personal investment preference, risk tolerance or a second marriage can also prompt spouses to approach retirement planning and investing in very different ways.
But experts say couples need to understand the difference between separate plans that take both partners into account and planning that's dangerously disconnected. That takes open communication and, if need be, compromise.
"The bottom line is that, like most other things for couples, successful retirement planning involves collaboration, cooperation and compromise from both partners," said
Reasonable differences
Common disagreements over money can carry over into retirement planning.
A 2013 study by
"It's perfectly OK for couples to have different risk tolerances and investment objectives," Solomon said. "Under those circumstances, it's appropriate to have two different portfolios managed to those two risk profiles and objectives."
On occasion, distinctly separate retirement plans are as much the result of circumstances as they are individual financial preferences.
"I think the primary reason I see people keep their accounts separate is that they are in a second marriage with children from the first marriage. They want to ensure that their own children receive an inheritance and that their spouse does not have the ability to 'disinherit' their children if they should die first," said
There are other built-in limitations to syncing retirement plans. As money manager
Another advantage to separate retirement accounts is if the marriage ends in divorce, both parties can simply hang on to their accounts without squabbling over fair separation of assets.
"From an account and functionality perspective, each individual has to retain their own separate account whether they are using a 401(k), IRA or other retirement savings vehicle," said
The perils of separation
While couples do execute separate retirement plans, financial professionals warn that too much autonomy can raise the risk of one partner's program conflicting with the other's, such as two portfolios that are both exceedingly aggressive and offer no hedge against volatile market conditions.
"When it comes to saving for retirement, it's best for couples to have a concerted plan in place. Otherwise, they are more likely to come up short in meeting their retirement goals," said
A coordinated plan is particularly important when couples start tapping into their retirement savings.
"Coordinating finances can be extremely important in the distribution phase of retirement when working to decide which account to pull money from that might be the most tax efficient," said
Lack of overall coordination can also impact retirement in areas other than retirement savings. As Solomon noted, it's critical that partners work together in deciding when and how to begin to receive
"To maximize cumulative benefits over both spouse's lifetimes, the best approaches involve strategies where one spouse starts
Keep it together
One common situation when couples pursue separate retirement planning is both scattered accounts and professional guidance. As much as possible, say financial authorities, it's best to place separate accounts with the same company overseen by the same management.
"Far too many people have many accounts and many different advisers when dealing with retirement accounts," said
A commitment to finding common ground whenever possible can make even the most extreme differences of opinion less of a problem - for instance, one partner adjusting his portfolio to be more conservative to better complement a spouse with particularly aggressive holdings.
Likewise, couples benefit by keeping communication between themselves and their financial advisers open, whether it be about
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