Having The Talk
Commonly known as “the talk”, this notable event, sometimes remembered as our parents explaining “the birds and the bees”, is an important affair aimed to empower kids and increase knowledge on the topic. Without proper guidance, information can be gathered from all sorts of sources, creating the possibility for false beliefs. It may be awkward to have this discussion, but the more open you are on the topic the less chance fear or apprehension may develop.
Most parents may dread that conversation, but there is another “talk” that most couples avoid having: the one about retirement planning. If you have thought about retirement, you may have considered the following questions:
1. How much money do I need to retire?
2. Where will I live?
3. What will I do?
Sarah Kaufman, a retirement coach, shares a 4th question couples should ask but often forget: How would my spouse answer these? A 2013 Fidelity Study finds men envisioning themselves indulging in sports during retirement while women envision spending time with family, doing hobbies, and volunteering. The same study also finds that 36% of couples disagree or don’t know where they plan to live when they decide to retire.
Retirement planning may seem straightforward, but it isn’t. Dayana Yochim, a NerdWallet investing specialist says, “It’s riddled with emotional subtext, based on past experiences, unspoken expectations and how money was handled or talked about growing up. It’s so hard to know where to even start the conversation.” These in-depth discussions about your retirement planning may be tough to have but being on the same page as your partner will ensure your financial wellbeing when you do decide to retire. To open the doors of communication, try thinking back to “the birds and the bees” conversation you may have once had. Parenting coach, Avital Schrieber Levy, aka The Parenting Junkie suggests the 5 T’s, timing, truth, terminology, tone, and tools.
Some people have no difficulty with transitions, and retirement, should make no difference to them. However, for the people who encounter difficulty, the unknowns or new beginnings could be extremely troublesome. The Center for Retirement Research at Boston College reports fewer than 20% of couples will retire in the same year. Couples will need to discuss their plans, expectations, hopes and fears as they will be more than likely experiencing retirement at different times.
Communication is key. Change is always stressful and as lifestyles begin to shift, these open lines can delineate couples facing denial or anxiety on any togetherness, financial, or retirement expectation issues. Miriam Goodman writes in How to Avoid Living Unhappily Ever After in Retirement,
“For many unhappy-together couples, the problems starts when they don’t have the same expectations of retirement, then it gets exacerbated when they don’t talk about it. To not drive each other crazy, couples need a mutually acceptable game plan for the future. These talks should begin long before retirement”.
Debt, portfolio, retirement accounts, assets, credit, mortgages, student loans, 401(k), for couples, discussing how much you’ve both invested for retirement is equally important as deciding where you want to live and what you want to do. Being realistic about debt, including credit cards, mortgages, student loans for children or grandchildren, will help couples start talking about lifestyle goals for retirement by determining how much each partner owes. It is important that both of you are informed and aware of individual responsibilities in terms of what your assets and debts are.
One of the worst mistakes partners can do is to start blaming each other, or picking each other apart. This could be for spending too much money, having to negotiate more household responsibility, or spending “too much” time together. Take time to adjust to being retired, but do so respectfully. Express yourself if you need some “alone time” or don’t want to do something your partner wants.
Using a free online retirement calculator can help ensure you have a prepared budget for retirement. Creating a budget allows you to look at your current and expected monthly expenses to see how they will be affected when you have less income than today. With projected estimates, you might find some current expenses that may evaporate by the time you retire, such as if you plan on downsizing your home. You may also consider a local financial advisor or retirement planner to help optimize your investment portfolios and help you plan financially for retirement
Before you go and contemplate this “retirement talk” for hours on end, take a deep breath, and consider how comforting it will feel to have an understanding or general plan for you and your partner’s future. It may be frightening and easy to avoid, but this “talk” is something that is important to plan a stable future.