4 steps for couples creating a retirement plan

When you commit to a long-term relationship, you’re affirming a future together based on your shared feelings, values, and visions for the future. But are you forgetting another important relationship—the one that each of you has with your finances?

These four foundational steps can help you to better understand each other’s financial attitudes and values so that you can build a solid financial future together:

Almost half of Americans surveyed say their father or mother has been their primary financial role model. And since no two parenting styles or family circumstances are exactly alike, the ideas about money each of us brings to a relationship may vary: some may fear having nothing, while others think they will always have what they need to save, spend and give as they see fit.

When you and your partner openly discuss your individual experiences with money, you’re better equipped for avoiding conflict. “For example, you may foresee paying for your children’s education, but your spouse may think that’s their responsibility," says Scott Ferguson, a wealth advisor for the Abundant Life Group at Thrivent.

“But by having a deeper conversation, you may learn that because your spouse worked their own way through college, they value their education that much more,” adds Ferguson.

Understanding the background on why your spouse has a certain perspective can be helpful in future conversations.

• How did your family handle money when you were growing up?
• Have we had any misunderstandings recently about our own money management issues? If so, how could we avoid them in the future?
• What are we looking forward to doing together in the next few years, once the kids are out of the house and when we’re ready to retire?

The 2023 Thrivent Valentine's Day survey* found that fewer than 50% of Americans share financial priorities and decision-making with their partner. And the topic of retirement is no exception.

“People just don't like to come home from work, pay the bills, clean the house, then say, 'I have this great 401(k) investment strategy I want to share with you,'” says Ferguson. “The average person probably spends more time planning family vacations than they do discussing retirement,” he notes.

When would you like to be able to retire? Ferguson suggests giving yourselves some wiggle room when it comes to a target retirement date. “Even people who love their jobs want to know when they can retire,” he says.

• When do we want to retire?
• How can we take what we’ve already done individually for our retirement and create one solid plan?
• What would we like to be doing in our early, mid, and late retirement years?

Once you’ve both agreed on a retirement vision, consider what may get in the way of your success:

It's common for most couples to have concerns about finances. The Thrivent’s 2023 Valentine’s Day Survey* found that lack of savings (35%), external factors such as inflation, job loss or a health condition (27%), and credit card debt and budgeting (22%) are among the biggest financial obstacles for couples today.

And if you or your spouse has been married previously, consider alimony, child support and current retirement-account beneficiaries in your new strategy.

Imagine a couple in which one spouse wants to grow their assets aggressively, while the other seeks security and low stress. “I might suggest building a larger emergency fund. That way, the spouse feels secure. Anything beyond that could be invested more aggressively,” says Ferguson.

Another stress reducer is a “bucketed” approach to risk management in retirement. “If you plan on spending much of your money in the first few years, you can build a conservative strategy for those funds,” says Ferguson.

“Then, the amount you plan on spending in the five to 10 years after can live in more balanced portfolios with the remainder of your retirement money built for growth,” he explains.*

• What amount of debt, including preexisting agreements, do each of us have, and for how long?
• What are our feelings about investment risk?
• How can risk be a positive part of our retirement plan?

“There’s a lot of competition for a young couple’s money,” says Ferguson. When people spend first, then try to save and give, there’s often not enough left. “People who save and give first and spend what's leftover are going to be much more consistent in achieving their goals,” he adds.

Prioritization helps in goal setting. To make this point, Ferguson tells the story of a couple who, when asked to prioritize their spending, put “expensive cars” at the bottom of the list—even though they both drove expensive cars. “So, when it was time for a new car, they chose more practical vehicles—and those savings helped them afford their kids’ education,” notes Ferguson.

With respect to giving, Ferguson suggests prioritizing potential charitable causes. “Those who don’t, end up not giving as much,” he observes. He also cites many ways to bequeath financial assets, while also potentially improving your retirement income and tax circumstances.

Ferguson also suggests tracking your net worth. “Sure, paying off debt and contributing to your 401(k) is not nearly as sexy as a new boat,” he says. “And while buying luxury items may make you feel wealthier, your net worth is a much better indicator of wealth.”

• What are our financial priorities, from most important to least important? (Start with the big-ticket items.)
• What is our net worth, and how can we grow it consistently over time?
• How can we give generously, now and in retirement?

In summarizing his suggestions, Ferguson emphasizes how much couples should always be working toward gaining a greater understanding of each other’s long-term goals:

“In the case of one couple I’ve worked with, the wife wanted to travel the world, while her husband looked forward to staying close to home and golfing. Their compromise? He agreed happily to join her on the road, with his golf clubs, as she saw the sights and explored! Because they both understood what each was looking for, they were able to have their ideal retirement and avoid conflict.”

Planning for a bright future can be fun and exciting. It just takes open and honest communication in a timely fashion, and a willingness to remain flexible as you foresee a happy and fulfilling retirement.

Are you and your spouse working toward a purposeful retirement together? Talk with a financial advisor about the many ways you can turn your individual and joint retirement dreams into an actionable plan.