Is Your Financial Planning a Family Affair?

In most families one spouse has assumed the primary responsibility for managing the family finances and planning for retirement. Although there is nothing inherently wrong with one person taking the lead on such matters, Savvy families ensure that although one spouse may be handling the day-to-day management, the other spouse has a say in charting the financial course and most importantly, has access to all pertinent information such as account numbers.

As you might suspect, in my family I have the primary responsibility for the day-to-day management. I use Quicken and the RWR Simple Retirement Workbook – comprised of multiple worksheets, including the Spending Planner and Retirement Planner worksheets, focused on different aspects of our retirement plan – that contains all the information related to our financial accounts and retirement planning.

Family Spending PlanMy wife and I sit down on a regular basis to review this electronic portfolio. Should something happen to me, she is fully aware of all aspects of our finances (e.g. account numbers, beneficiaries, etc.) and has the requisite access to our various accounts.

With respect to retirement planning, we talk nearly every day. While we don’t necessarily have a detailed discussion and change our plan daily, weekly or monthly, we talk about various studies or reports related to personal finance/retirement planning, the economy and how what is happening around us might impact our plans. After all, we are still 10+ years away from retirement. A number of things can, and will likely, change. A retirement plan is not static. It has to be dynamic, just like the world around us.

Family Planning

Unfortunately, too many couples, even couples in their late 50s and 60s – those rapidly approaching retirement – talk about everything (children, grandchildren, vacations, home improvements, etc.) but their own retirement. Perhaps it is an assumption that they will agree on everything or that things will ‘just work out.’ Of course that simply isn’t true. Like the tag line of this blog notes, you live better through planning…which requires talking!

The best way to avoid potential issues that are sure to arise at some point is simply to talk to each other. Each spouse should speak honestly and openly about their thoughts on how your nest-egg should be built and your individual needs, wants, hopes, fears and dreams for retirement, such as where to live and what to do.

In the event you and your spouse don’t see eye to eye about building a retirement nest-egg and how to spend time in retirement, focus first on the areas in which you agree. Although I am not a huge fan of financial planners, and believe they are generally not worth the expense, you might consider such an individual to help bridge the gap on the areas in which you disagree.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

10 Comments

  1. I am the financial advisor in our marriage. I need to sit down and write all of my user names and passwords to our accounts in case something ever happens to me.

    • “I need to sit down and write all of my user names and passwords to our accounts in case something ever happens to me.” Absolutely. In the event something does happen to you, you wouldn’t want your significant other to struggle with figuring out how to get access to your various accounts. Obviously, their mind will be racing with a number of other things to deal with.

      As the ‘financial guru’ not only my household, but to my parents and brother – who are financial beneficiaries in addition to my wife – one of the other things I have done is write out a detailed (suggested) plan of what they should consider doing, not only with money they will receive from me, but in combination with other monies they have, should something happen to me.

      Thanks for stopping by, Michelle and adding to the conversation.

  2. Excellent post, SavvyJames. My husband is the financier so to speak and I have absolutely no problems with that. He updates me regularly on the progression of our retirement plan, making sure that I am always aware of any changes, and he ensures that I know how to access each of our accounts.

    He has the passwords to my TSP (401K) and Roth IRA accounts and moves money as he deems necessary. I greatly appreciate the work he does and I am very happy that there is at least one person in our family that tracks and understands the stock market. His knowledge of stocks & mutual funds and how to invest is going to give us a great retirement. And for that I am grateful!

    • “He updates me regularly on the progression of our retirement plan, making sure that I am always aware of any changes, and he ensures that I know how to access each of our accounts.” That is great to hear as it is important both spouses are engaged, and are aware of what is happening with their money. Nothing worse than assuming all is well only to be disappointed 25-20 years down the line when the options for securing a satisfying retirement have narrowed.

  3. A Google+ reader notes…

    “I agree with this a lot. If one person takes the lead on the day to day handling of the finances the other person should be aware of the financial situation and where the money is going.

    For me, I included my children in on finances, at a high level, so they were aware of what things adults have to pay for.”

    • Absolutely agree with including children, sharing information that is age appropriate.

      Also, on the other end of the scale, adult children eventually get to the point where they need to be involved in their parent’s finances. As the oldest child in my family – and executor of their will – I have been intimately involved with my parent’s finances the last few years to not only help them with navigating management of their finances as they get older, but also to ensure their wishes are met after they have passed.

  4. I am, and yes, my spouse is aware of the accounts, but we haven’t had the retirement talk yet (we’ve got almost 30 yrs if time for that), we are still discussing whether we will live where we are now for the next 5-10 years lol.

    Thanks for the heads up, I should update our ‘in case I die” binder/portfolio, it’s been a couple years and yes many things have changed because things are indeed dynamic. Putting it on the calendar for next month.

    • It sounds like you are on top of things. Nice! As we all know, things tend to happen when you least expect it and therefore, it pays to continually share financial information. It is easy for us all to get caught up in the daily grind of life and before you know it, there has been a number of changes to a family’s financial portfolio that are not known to the spouse that does not deal with the daily management.

      No doubt that you have plenty of time to worry about specifics of where you will spend your retirement years and what you will be doing. However, it doesn’t hurt to have some general ideas as to where to live and what to do as that information can factor into the portfolio you’re building now and your goals. If you are pretty certain that you would like to live in New York City and travel the world, that is going to take more money than planning to move to a small town in South Carolina and taking one or two small vacations a year. One might require you to aim for a retirement portfolio of $3M while the other may only require $1.5M.

      As I have noted in previous posts, you don’t want to be saving/investing blindly. You don’t want to over save and invest, potentially depriving yourself of some aspects of a lifestyle that could be enjoyed during your working years and similarly, you certainly don’t want to under save and invest, and find yourself unable to do the things you might like to in retirement because the money isn’t there.

      Always great to hear from you, Char.

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