Less Than Half of Couples Share Retirement Vision

According to a survey from Hearts & Wallets, only 38% of couples engage in retirement planning together, despite one in five worrying their spouse or partner may not be able to manage finances alone. Complicating matters, women tend to be more anxious in general about financial matters than men, according to the Hearts & Wallets Insight Module, “Understanding Women Investors: Breadwinners, Homemakers, Mothers and More,” the latest report from Hearts & Wallets’ 2012/2013 Investor Quantitative Panel.

The age of the couples matters in whether they engaged in retirement discussions with each other: The survey found that only 34% of couples in the “accumulation” group—which can include early, mid- and late career employees who have not set a date to retire—have discussed retirement together, compared with 45% of couples who have retired or plan to in the next five years. “It is still kind of shocking, though,” Chris Brown, partner at Hearts & Wallets, told PLANADVISER. “More than half haven’t discussed this together.”

An age gap between couples is often cited by financial services professionals as a challenge for financial planning, but the survey found that only 7% of couples considered it a problem. “Maybe it’s not really as big of an issue as we might think,” Brown said.

Hearts & Wallets recommends couples consider trust services as a solution to plan ahead for retirement. Family management of finances may be another option, depending on the competency and availability of family members. 

Financial advisers can help facilitate the conversation by focusing less on retirement and more on “life events” before retirement—such as getting married, having children and buying a house—which could incline clients to start thinking about retirement planning. “Emphasize retirement a little less and talk about these other events that might facilitate the need for a plan,” Brown suggested.

Women Less Comfortable With Finances  

Many men in the Hearts & Wallets focus groups felt their wives were uncomfortable with finance and might need support. The men had a sense of frustration that they could not engage their wives to be more involved in financial matters.

In Hearts & Wallets’ quantitative survey, 38% of women express either high or moderate anxiety, compared with 29% of men. The highest anxiety is among women with children under 18 (40%). Women are also more concerned about things both within and out of their control. They are more risk adverse and less experienced with investing than men, the survey found.

Women—mothers and older women in particular—are more concerned than men about every issue, with the most concern around outliving their money, reduction or elimination of pension benefits, the futures of Social Security and health care, and setting aside sufficient funds for retirement.

Many women are confused by the plethora of investment information. More than 60% of middle-aged women, both breadwinners and non-breadwinners, confess to being confused, and mothers with dependent children under 18 are close behind at 59%. The least confused are widows age 55 and older, perhaps because they have been forced to assume primary responsibility for finances.

Seeking Financial Guidance  

Older women, both married and widowed, are more likely to use a financial services adviser as an advice source and as a primary source of advice. Three-quarters of married non-breadwinners and 70% of widows age 55 and older consult a financial adviser. Thirty-five percent and 26% of those segments say their adviser is their primary source of advice. In comparison, only 58% of middle-aged breadwinners and 59% of women with children under 18 consult financial advisers. Only 16% and 18% of those segments rely on advisers for primary advice. 

Non-working women of all ages and widows 55 and older rank “plain talk” as their first priority when it comes to financial advice. Middle-aged non-breadwinners also value fee clarity in addition to a provider who explains things in understandable terms. “They want clarity and to slow down the discussion and to not feel pressured,” Brown said. “So it really is a matter of having … a more thoughtful [discussion].”

Price was the key attribute for middle-aged breadwinners and mothers who named low fees as critically important in a financial provider. Perhaps to avoid fees, younger women are looking elsewhere for financial insights. For example, 18% of women with children under 18, 14% of middle-aged women breadwinners and 13% of middle-aged women non-breadwinners use social media to get information about finance and investing. Only 2% of women age 55 and older, both married and widowed, consult these sources.

Full results about this study are available by contacting Hearts & Wallets at www.heartsandwallets.com.

Corie Russell