A new study by Fidelity Investments says many Baby Boomers and older pre-retirees aren't communicating with their spouses about their money and plans for retirement. Alarmingly, less than half of couples (45 percent) make decisions jointly regarding their day-to-day finances, including budgeting and bill payment. Even fewer (38 percent) make investments decisions together. And 42 percent have different ideas regarding their expected lifestyle during their golden years.
But even more alarming to me is the lack of interest that one spouse often takes in money matters. According to the study, only 15 percent of couples feel confident that both of them could assume responsibility for their joint finances if the other person could no longer do so.
I understand that couples tend to divide household chores. One spouse may decide to pay all the bills and the other takes care of the cooking. A division of labor can make a lot of sense and make for a more efficiently run home. But every twosome needs some kind of a back-up plan for survival if the unthinkable should happen. Say a wife is responsible for making all the meals; she would never let her husband starve. She would either teach him how to cook or take comfort in the fact that he could drive himself to a restaurant to eat.
Managing money should be no different. To get by in today's complicated world, the partner who isn't engaged with the couple's finances needs to at least know where to find crucial bank account information and how to manage the investments once the other person is gone. That's why at the very least, I think all couples should keep a list of all bank and retirement accounts, and online passwords in a secure place so the other person isn't left scrambling for information. And while you're at it, you should also leave the name and number for your accountant and lawyer.
Is it critical that spouses talk about everything when it comes to money? I believe partners can never communicate enough. But if you are going to keep any financial secrets from one another, stick with how much you spent on the other's birthday or holiday gifts and not the amount of cash sitting in an IRA or brokerage account.
Do you and your spouse talk about the joint finances? I'd love to hear what you have to say.
Filed Away image by mrmanc, CC 2.0.