'Til Debt Do Us Part
Posted 01 Jun 2016 by Patricia Bell, PFP
Ah yes, long sunny days, flowers in bloom, warm starlit nights. It’s officially wedding season! We’ve already attended two weddings this year and our eldest son and his partner are busy planning their own celebration next year.
Exchanging various versions of “I do,” some couples meticulously plan every last detail while others eschew all the frills and trimmings and run off to city hall with some friends to formally link their lives together. I’ve often wondered if the amount of detail that goes into the wedding planning is an accurate reflection of how much detail goes into planning other aspects of this new shared life, like finances. And who does the planning?
While I suspect the farthest thing from their minds as they share that first dance, or drive off into the sunset, is retirement, Fidelity recently completed a study* which sheds some light onto just this subject.
Some key findings:
- Most couples (72%) said they communicate “exceptionally or very well” yet almost half (43%) were wrong about how much money their partner makes (10% of them by $25,000 or more).
- 36% disagreed on the amount of savings they currently owned.
- 47% disagreed on how much they’ll need for retirement
- Half of the couples don’t agree on their exact retirement age
The couples in the study were asked for their best piece of advice for newlyweds with more than half agreeing the biggest priority should be to plan as early as possible for retirement (57%).
- Make all financial decisions together (41%)
- Make a budget and stick to it (39%)
- Have an emergency fund (38%)
- Don’t hide your expenses (26%)
- Make sure your partner knows your complete financial status (24%)
So perhaps a new toaster isn’t the most practical gift for the newly married couple, maybe it’s a contribution to their retirement fund and an introduction to your favourite financial advisor!
Sources: Fidelity Investments 2015 Couples Retirement Study Fact Sheet: Disconnects on Retirement Expectations, Social Security and Income
Photo credit: https://www.flickr.com/photos/59632563@N04/6238711264