Estate planning is a critical aspect of financial well-being that often gets overlooked. Studies show that while U.S. couples generally share financial and retirement goals, they frequently neglect the detailed planning required to secure their future. This guide should be of particular interest if you are currently in a long-term partnership, especially if you share resources with your partner. How does your partnership compare with most other U.S. couples when it comes to attitudes on finance and estate planning? Keep reading to find out.
Key Findings: Shared Goals, Lacking Details
According to the Ameriprise report, a significant majority of couples in the U.S. align on their financial and retirement aspirations. They envision a comfortable retirement, financial security, and the ability to support their loved ones. However, the report reveals a gap in the detailed planning needed to achieve these goals.
1. Couples Have a Lot of Trust in One Another, but It Gets Messier in the Details
The good news is that the majority of U.S. couples tend to trust one another when it comes to money (95%), and they have shared retirement goals (93%). Further, 7 in 10 respondents said that they appreciate their partner's role in family finances.
However, couples aren't necessarily on the same page when it comes to the finer details. This includes the categories in which money is spent, expenses for children and grandchildren, and how much they need to live on in retirement. The study also found that couples providing financial support to adult family members sometimes disagree on how much support should be given.
2. Couples Generally Agree on Their Retirement Dates, Even if They're Not the Same
When it comes to retirement, couples are generally happy about when they exited the workforce or plan to retire. However, many couples who believe they will retire at the same time may need to manage their expectations. In reality, only 11% of couples exit the workforce simultaneously. Two-thirds of couples will have a difference of one year or more in their retirement dates.
3. They Also Don't Always Choose Their Retirement Dates
Curious to know how in control couples feel when they retire? 51% of retirees said they retired when they reached a certain money or life milestone, whereas 31% had to stop working due to an unexpected circumstance. Another one-third reported that they did not feel completely in control when they retired.
Here are some of the most commonly cited retirement reasons:
41%: Believing they had enough money saved up to retire
33%: Choosing to retire when their work circumstances changed
19%: Reaching a milestone or the age at which they chose to retire
17%: Retiring due to health reasons for themselves or a loved one
What this study shows is that while couples generally align on financial values and retirement, differing outcomes and expectations on specific details exist. Differences in financial priorities and the timing of retirement can create misunderstandings, highlighting the importance of open and continuous communication between partners. Retirement is a significant life transition, and being aware of the potential challenges can help couples better navigate their journey into this new chapter. By understanding each other's expectations and preparing for unforeseen circumstances, couples can ensure a smoother, more harmonious transition into retirement.
Focus Areas for Couples
To bridge the gap between shared financial goals and detailed planning, the Ameriprise report recommends that couples focus on improvement areas such as financial planning, estate planning, and retirement planning. Additionally, the study recommends that couples seek professional support.
1. Focus Area: Financial Planning & Estate Planning
First and foremost, Ameriprise recommends that couples need to focus more on their financial planning, including estate planning. While a couple can agree on retirement goals, they still need to put detailed plans in place.
Here's how American couples are doing in terms of financial planning:
52% do not have an estate plan in place
41% do not have a financial plan in place
39% do not have a plan for recreating their current income in retirement
2. Focus Area: Retirement Planning
The majority of couples tend to agree on financial priorities such as creating enough wealth to retire comfortably, but they start falling apart on the details.
Here are some concerning data points shared in the report regarding American attitudes about retirement:
Only 31% of couples are confident that their dollars will last them through retirement
36% of retirees are anxious about spending their savings
The sources of this anxiety are shared by many Americans: high inflation, rising healthcare costs, and increases in taxes.
3. Focus Area: Seeking Professional Guidance
The Ameriprise report posits that seeking professional guidance can help couples develop their financial plans and better reach their retirement goals. For instance, of the 58% of couples in the survey who use a financial advisor, 97% responded that their advisor helped them find ways to improve their well-being.
Estate Planning Advice for Couples
One of the key improvement areas for U.S. couples is estate planning. According to various reports, more than half of Americans do not have an estate plan in place.
There are various reasons why individuals and couples have not yet set up an estate plan. The concept of estate planning itself can be intimidating, and there are common misconceptions, such as needing to be wealthy to benefit from an estate plan or that the process is cost-prohibitive.
On the contrary, every American adult would benefit from having an estate plan in place. It's all about making important decisions about what should happen in unexpected events. This includes death, yes, but also events such as incapacitation where you can't make your own health or financial decisions, even on a temporary basis. These events can happen to anyone at any time, regardless of age, health status, wealth, or other circumstances.
It is in everyone's best interest, including their loved ones, to have an estate plan in place as soon as possible. It's an important step not only in financial and retirement planning but also in protecting loved ones and your legacy.
The Roadmap for Couples to Feel Financially Confident
Building financial confidence as a couple involves more than just setting broad goals; it requires honest communication, detailed planning, and mutual understanding.
Honest and Transparent Conversations About Finances, Retirement, and Beyond
Open communication is the cornerstone of a healthy financial relationship. Couples should regularly discuss their financial situations, including income, expenses, debts, and savings. Being transparent about financial status and decisions helps in building trust and understanding.
Be Open About Strengths and Weaknesses in the Financial Relationship
Every individual has different strengths and weaknesses when it comes to managing money. Recognizing and respecting these differences allows couples to leverage each other's strengths. For instance, one partner might be better at budgeting, while the other excels at investing.
Get on the Same Page About Financial Goals and Priorities
Aligning on financial goals and priorities is crucial. Couples should discuss and agree on their short-term and long-term financial objectives, such as buying a home, saving for children’s education, or planning for retirement. This ensures that both partners are working towards the same goals.
Have Detailed Retirement Savings, Income, and Estate Plans in Place
It's not enough to have a general idea of retiring comfortably. Couples need to develop detailed plans for retirement savings, income, and estate planning. This includes determining how much money is needed for retirement, identifying sources of retirement income, and setting up a comprehensive estate plan to protect their assets and loved ones.
Gain Confidence That Your Money Will Last Through Your Lifetime and Beyond
Finally, gaining confidence that your money will last throughout your lifetime and beyond involves continuous monitoring and adjustment of your financial plans. Regularly reviewing and updating your financial, retirement, and estate plans with the help of a financial advisor can provide peace of mind and financial security.
Taking the Next Steps with Trust & Will
It's clear that while U.S. couples often share financial and retirement goals, the details of their planning can sometimes fall short. Addressing these gaps requires honest communication, mutual understanding, and detailed financial planning. By focusing on the key areas of financial planning, retirement planning, and estate planning, couples can help ensure a secure future together.
Estate planning, in particular, is a crucial step that many overlook. It provides the peace of mind that comes from knowing your loved ones are protected and your legacy is secure. Whether it's managing unexpected events or ensuring that your wishes are honored, having an estate plan in place is essential.
At Trust & Will, we understand the importance of customizing estate plans to best serve your unique relationship and financial goals. Our team is dedicated to helping you navigate this core piece of financial well-being with ease and confidence. By working with Trust & Will, you can develop a comprehensive estate plan that aligns with you and your partner's shared values and priorities.
Take the next step towards financial security and long-lasting confidence. Visit Trust & Will today to start setting up your personalized estate plan. Our expert guidance and user-friendly platform make it easy to protect your future and that of your loved ones.
Trust & Will is an online service providing legal forms and information. We are not a law firm and we do not provide legal advice.
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