3 Ways Couples Put Their Retirement Future in Jeopardy

 In Retirement

retirement future

Planning for your retirement future is one of the most critical financial processes there is. If you make a mistake, all of the plans you had for your Golden Years can go up in smoke. Worse, you’ll need to start over with saving money altogether.

They say two heads are better than one, but that doesn’t necessarily mean that couples automatically do a better job at planning for retirement. The following are three common ways that couples jeopardize their chances at retiring comfortably.

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Not Disclosing Their Financial Pasts Before Marrying

Most couples cover all the major bases before taking the big step. They talk about their past relationships, past hardships, family history, etc. It’s only natural for the other party to be curious, but some of these subjects can also have serious effects on their potential future together.

Perhaps the most important, though, is their financial histories. Unlike other parts of a person’s past, this element will 100% follow them into the future and can easily affect the other person in the relationship. When this conversation doesn’t take place, one or both parties are in for a huge shock. Unfortunately, it can be enough to completely ruin their chances at following through with their retirement plans.

Credit card debt is one that consistently comes up. Once they’re married, a couple shares that debt. All too often, one party brings in an amount that is more than what you’d otherwise normally expect.

The other common version is student debt. We all know that college loans tend to take a decade or so to pay off. However, some people have substantially more than others. Once again, it can get brought into a relationship by surprise.

Keep in mind; I’m not suggesting that debt needs to be a deal-breaker. Rather, I’m only trying to point out that both parties must know about this kind of debt before moving forward with a life together that includes planning for retirement. Trying out retirement with bad information won’t work.

In short, if you don’t both disclose any financial baggage, you’re starting your wedding out on a shaky foundation. While your retirement future will be in trouble, this could endanger your actual relationship, too.

Being Dishonest About Their Personal Finances

This is an obvious one but still worth bringing up. That’s because I want to make it clear how quickly an untruth can turn into the unraveling of your retirement plans. Many people tell white lies or keep things from their spouse that they believe are harmless. I’m not here to cast judgment on that one way or the other.

That being said, I recently read Gold Diggers and Deadbeat Dads: True Stories of Friends, Family, and Financial Ruin by Valerie Rind and it became all too clear how often someone’s retirement future is completely shattered because of the person they trusted most.

Rind covers her personal experience in her article, Rebounding From My Husband’s Financial Infidelity. First, she admits that not asking about her fiancé’s past was a mistake (as we covered above):

“My colossal error before we married in 1990 was that I hadn’t asked “Mark,” an executive at an architectural firm, about his financial past or present. I didn’t know what he owed or owned. I married for love, so details didn’t matter, right?”

Eventually, Mark lost his job and the couple began experiencing financial problems. Rind suggested they sell his condo. At the time, they were living in a spacious apartment, and it was her understanding his condo was just a rental property.

That’s when she found out that her retirement future – and much more – was in jeopardy:

“I confided in my father about our financial troubles. He suggested that perhaps Mark took out a second mortgage on the condo or had sold the place without telling me. Preposterous, I thought. Mark and I were a team. He would never keep a secret like that.

My father urged me to check the public real estate records. So I did and got the biggest shock of my life. Mark, it turned out, didn’t own the condo. Never had.

He was only a renter when we met and I moved in, even though he told me he owned the condo. Mark probably never even had my name added to the lease for the year that we lived there, I suspected.”

Obviously, this is a pretty extreme situation. That being said, whatever your thoughts are on white lies, you can’t risk being dishonest about your finances with your spouse in any way. After all, it’s easy for one instance to turn into two and so on and so forth until you’re in serious trouble.

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They Try to Do It on Their Own

I’ve brought up before that going at it alone is a dangerous financial mistake couples make. Retirement is simply too short to plan for without some professional assistance.

For one thing, a professional makes it difficult for the above problems to occur. They represent a third-party who will look over both individual’s financial histories. A professional is also very helpful because they can ask the tough questions most of us don’t want to ask our spouses.

That’s hardly the only reason to get help from a professional with your retirement future, though. There’s also the simple fact that they have way more experience than those who don’t do this for a living.

Couples who save together stay together. Unfortunately, left to their own devices, couples often take terrible advice. For example, I’ve covered before that people sometimes put their entire retirement nest eggs into stocks. This is beyond a bad idea, but it happens all the time because of how many couples don’t seek professional guidance.

As you get into your 60s, there are plenty of other investing mistakes to avoid, too. While it’s important to become financially literate and never blindly trust anyone – even a professional – that’s not an excuse to forego the help of a trained professional when it comes to planning for your retirement.

Make sure you read this over with your spouse and get on the same page about planning for retirement. Bring a professional onboard who can help you both avoid the three pitfalls we just covered.

early retirement

Sergey Sanko
Sergey had started an IncomeClub after years of being an investment advisor for high affluent investors and managing fixed income securities. He is the lead investment advisor representative and holds a Series 65 license. Sergey earned his Executive MBA degree from Antwerp Management School.
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