Struggling with Retirement

For many married couples, when it comes to preparing for retirement, the real struggle may not be about scraping together a stash big enough to leave the workforce and buy that condo in Florida. It’s the battle with your spouse about what you’ll each do in retirement and how much time and money it’s going to take to get there. It’s also about who will retire first: you or … you know who.

Millions of boomers are entering their 60s and are more concerned than ever about retirement. They know they need to save, but how much? And what exactly are they saving for–to spend more time spoiling the grandkids, start another career, or sip Chianti in Tuscany? Turns out that husbands and wives may have radically different ideas about the subject. “Married couples can be relatively in synch with one another when it comes to making decisions about how they want to live today–where to go to dinner or where to take the next family vacation,” says Jon Skillman, president of Fidelity Investments Life Insurance Co. “Yet surprisingly, husbands and wives do not necessarily see eye to eye on their expectations for retirement.”

The deepest divide is in the way spouses envision their lifestyle in later years. Fidelity Investments found 41% of the 500 couples it surveyed diverge on whether both or at least one spouse will work in retirement. Wives are generally spot-on regarding their husband’s retirement age, the survey found, but men underestimate the age their wives will be when they stop working. And husbands are slightly more optimistic about their standard of living than wives are.

Busy juggling careers and families, most couples don’t take the time to sit down, separately or together, and think about what they’d like to do five, 10 or 20 years from now. They assume they’re on the same page, but the reality is they avoided even talking about it. A Merrill Lynch survey found husbands were significantly more likely to say they share common goals with their wives, while women were more apt to say they haven’t ever discussed the issue. One-third of the couples surveyed disagreed about whether they have a viable financial plan.

If you’re self-employed or in a job that doesn’t have a standard retirement age, you may be more apt to delay thinking about these issues. “It’s often an imminent retirement date that provides the catalyst to start planning,” Skillman says. Getting laid off or accepting an early-retirement package can force your hand. But don’t wait until you get a severance check to begin planning.

Bridge the divide. First, talk to your spouse about your expectations: what age you’ll retire and what you’ll do. “Most couples start with a number, just a number based on what they think they’ll need in retirement, without any real deep thought and consideration,” says Robin Dziuba, a wealth- management adviser with Merrill Lynch in Providence, R.I. Such as? “How they’ll spend their day, what type of organizations they’d like to join, how much they’d like to travel. Once they do that, it’s easier to find out what income they need to support that,” he says.

Figure out “the number” together. Many advisers say you’ll need 70% to 80% of your preretirement income to maintain your standard of living. But they forget about additional expenses, such as medical costs. And then there’s the Grand Canyon factor. Many couples first view retirement as the chance to take all those trips they put off over a lifetime, says Brian Jones, a vice president with Cooper, Jones & McLeland, Ltd. in Fairfax, Va. “They’re not looking for a reduction in lifestyle at that time.” He suggests couples shoot for having 100% of their income when they initially retire, then 80% to 90% a decade later: “when they’re cruised out, have seen the Grand Canyon and been to Ireland.”

Work together to save. The Fidelity survey found that most couples disagreed on what their prime source of income would be in retirement. Write down what you have saved so far. Find out what income you may receive from pensions, Social Security and annuities. Decide which you’ll tap first. Talk to a financial adviser or use an online calculator, like the Ballpark Estimate at choosetosave.org to help you figure out how much more you’ll need to save. In the race to retirement, both spouses need to remember they’re on the same team.

Epperson, a correspondent for CNBC, is the author of The Big Payoff: 8 Steps Couples Can Take to Make the Most of Their Money–And Live Richly Ever After (Collins)