Why are Women Taking Less Part in Couples’ Retirement Planning?

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Why are Women Taking Less Part in Couples’ Retirement Planning?

New research finds that women tend to leave crucial money moves up to their spouses or significant others, which sets them back financially. But couples can take several steps to make sure both sides have a say in big financial decisions.

For many Americans, saving up enough money for a comfortable retirement is challenging. There’s a lot to learn, starting when you begin working in your teens or 20s. Married women in two-income households also often aren’t saving as much as they could in workplace retirement plans.

And now it seems couples may not be as in touch with their financial lives together as they believe they are. According to the findings from the latest Fidelity Investments Couples & Money study, even though 57% of the survey’s 3,426 respondents said they are “joint decision makers on retirement and other long-term financial goals,” more than half of all non-retired couples disagreed on how much money they need to retire comfortably.

In half of the two-earner couples surveyed, only one earner is covered by an employer retirement plan. The partner who is covered typically doesn’t increase his or her retirement plan contributions to offset that circumstance. Let’s take a look at some reasons as to why women aren’t participating in retirement plans and ways to overcome those challenges.

The disconnect between how couples believe they manage money together and how they actually communicate can cause problems while planning for retirement. This study finds that 40% of people in same-sex marriages and 27% of people in opposite-sex marriages said they have only one primary retirement decision maker. It wasn’t just retirement planning that showed a disconnect between couples’ money beliefs and the reality of how they manage finances. While 71% of partners claimed they communicate “at least very well” with their other half about money, 39% of respondents didn’t know their partner’s salary.

Overall, 22% of women said they have little or no involvement in retirement planning. Money discussions are not always easy, many couples feel they are in sync and are comfortable talking about financial topics is encouraging, even if the conversations do occasionally end in disagreement.

It’s important to be transparent with your partner when it comes to talking about finances. Openly discussing financial matters helps people feel more confident, more closely aligned and better equipped to take on the future. For all couples, the best advice for money conversations is that it’s not a competition. Building a financial plan together gives each partner an equal opportunity to understand their financial needs and how to get there. Planning allows couples greater control over how they can reach shared financial goals and helps identify potential hurdles to overcome.

Control over finances — comes when both partners gain greater confidence in their financial future as a couple. Having a plan and sticking to it leads to greater confidence for both partners, which brings greater peace of mind that a solid roadmap is in place to achieve your financial goals. Reviewing your financial plan at least once a year to adjust for life changes and make sure you’re both still on the same page.

Here are some ways women in two-income households can become more proactive in their financial planning for a more secure future. 

1. Plan your finances as if you were solo – It’s important to have separate accounts so one spouse isn’t 100% relying on the other. 

2. Make saving a priority – The older you get, several problems can arise. Women think time will be on our side to get to our longer-term needs and tend to put themselves last. If possible, try and allocate more money towards your workplace retirement plan, increase your contribution rate by just one percentage point and you’ll see a major difference in growing your savings.

3. Stay on the job longer, if you can – Increased earning years may also let you push back beginning to claim your Social Security benefit until age 70. Doing so can bump up your benefit by 8% annually. Continuing to work, even part-time, can also help stave off dipping into retirement accounts, allowing them to grow, and let you sock away additional retirement funds.

4. Have regular money conversations with your spouse – Some of the women said they thought their spouse knows more about finances. Failing to talk about your household’s finances with your spouse shows a lack of trust in the foundation of your relationship. Build your investment and retirement portfolios as a team. It keeps both of you accountable.

5. Work with a financial advisor – Seek out an advisor who appreciates your financial issues, your caregiving load, your career and your money goals. Find one who can offer a holistic approach, not just providing investment and retirement-planning advice.

When it comes to retirement planning as a couple, or even budgeting or daily decisions about money, knowledge and communication are the keys to success.

Ideally, your retirement shouldn’t be a do-it-yourself endeavor unless you have expert knowledge and experience in retirement planning. Quality and experienced retirement income advisors do more than just create a retirement nest egg for you. They also give you a distribution strategy for your drawdown years so that you are financially secure when you are married, single, widowed or divorced.

Our team of experts take the stress out of retirement planning and design a portfolio that is best suited to you and your individual needs for the future. Contact us here today to set up your complimentary strategy session.