Retirement Planning for Couples

Cooperation is the key to successful retirement planning for couples. Many couples get themselves into trouble because one spouse or partner handles all of the investments and retirement planning. This is a terrible mistake because at some point that individual may not be available to take care of those chores.

Both Spouses Need to be Involved

The life expectancy for the average American man is around 76 years while the life expectancy for average American woman is around 81 years. That means the average woman can expect to be on her own for four to five years in retirement. Medical experts estimate that 50% of Americans over age 85 suffer from conditions like Alzheimer’s disease that leave them unable to manage financial matters.

This is why both spouses need to be active in the retirement planning process.

There is a strong possibility that one of you will not be able to manage the retirement investments at some point. There is also a possibility that both of you might not be able to handle the finances at some point.

Retirement Planning is a Family Affair

Even if one spouse normally takes care of the retirement investments both need to be in a position to take charge of them. This means both spouses need basic information that can let them take over the investments and funds at a moments’ notice. This information includes:

  • The names and contact information for all of the professionals used including retirement planners, financial advisors, insurance agents, brokers, accountants, tax preparers and attorneys.
  • The basic information for all your bank, brokerage, retirement and other financial and investment accounts. This includes the name of the institution, the institution’s contact information, the account numbers, passwords and user names for online account access and the addresses of any websites used to access or monitor the accounts.
  • The location of all paperwork related to retirement planning including wills, legal documents, insurance policies, annuity policies, prospectuses, checkbooks, etc.
  • How to access all of the investment and bank accounts. If you have an IRA, 401k, money market account, brokerage account or CD both spouses should know how to access it and withdraw money. If you have a life insurance policy with cash value both spouses should know how to access it and borrow money.
  • The basic information about all the insurance policies and annuities you have. Both spouses should know the names of the insurance companies they hold policies with and know how to contact them. You should have a list of all the policies and numbers written down.

If you use any sort of financial advisor or retirement planner spouses should meet with that individual. Both of you should know how to get in touch with that person and know what financial decisions he or she is making.

Legal Considerations

It is not just enough to know where all of the money and paperwork is. Both of you should have the legal right to access the accounts. Read all of the documentation and make sure this is the case. If not get it changed so it will not be a hassle later on.

If you are not married you should check with an attorney to see what your rights are in your state. The law can vary widely from state to state and some states may not recognize some living arrangements. Something to be aware of is that relatives could try to claim they have legal powers over your partner or his money if there is no formal legal marriage. It may pay to get married or set up a legal arrangement such as a domestic partnership to protect your rights.

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