A new study from Fidelity Investments finds that fewer than half of couples make investment decisions for retirement together, and wives lag behind their husbands in terms of retirement education.
The Couples Retirement Study, conducted in May 2011, finds that only 41 percent of married couples make retirement investment decisions together, and only 17 percent of couples are totally confident that either spouse is prepared to assume responsibility for the couple's retirement finances, if necessary.
But that's not where the trouble ends. Thirty-three percent of couples either don't know or can't agree where they'll retire, and another 62 percent of couple nearing retirement don't agree on their anticipated retirement ages. Close to half (47 percent) disagree whether they'll continue to work in retirement, and 73 percent of couples can't even determine whether or not they have a detailed retirement income plan.
One of the major contributing factors to the disagreements and lack of communication may be that wives are often not as involved or are less knowledgeable about their retirement finances than their husbands. The problems are especially noticeable when it comes to financial confidence, engagement, awareness, and approachs to investing.
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Key issues in women's lack of involvement/awareness include:
- Only 35 percent of wives say they are completely confident in their ability to take full responsibility for the household retirement finances, compared to 72 percent of husbands.
- Eight percent of wives report they are the primary retirement financial decision-maker in their household, compared to 37 percent of husbands. Further, fewer wives (15 percent) than husbands (40 percent) consider themselves to be the "primary contact" with their investment professional.
- When asked how much money they expect their income sources to generate monthly in retirement, twice as many wives (32 percent) as husbands (15 percent) say they do not know, indicating a greater lack of financial awareness.
- Wives tend to have a lower risk tolerance and invest less aggressively than husbands. For example, 21 percent of wives say they are most interested in preserving wealth and therefore willing to settle for lower returns, compared to 16 percent of husbands. In addition, only 5 percent of wives describe themselves as investors, rather than a spender or saver, vs. 20 percent of husbands.
The study also explored the relationship with financial professionals, and found that 58 percent of couples work with an investment professional, but only one-third (35 percent) meet with the advisor together. This could be one of the reasons for the education gap among wives.
In addition to keeping each other out of important financial discusions, married couples may be leaving their adult children out, as well. More than half (55 percent) report they have had at least some discussions with their adult children about important topics such as long term care, critical illness, etc., yet only 1 percent of those who have done so agree their investment professional was involved. Of those who have not had discussions with their children, 32 percent say they either "have not gotten around to it," or "there is plenty of time left" to do so.
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