man, woman, retirement planningIt's no secret that men and women communicate differently, but experts say these differences even carry over into how men and women approach -- and talk about -- retirement planning. For instance, a recent Country Financial survey showed that while men are more likely to say that communication about retirement budgets gets easier the closer they get to retirement age, women tend to say these discussions get harder.

WalletPop spoke with a few specialists in the field of financial advice and financial planning and found out just where American couples are likely to fall short when it comes to their long-term financial goals. But we also discovered how couples can encourage good communication and combine their strengths to ensure that their golden years are financially stable.

The good news is that research proves that couples who enter into a retirement plan and communicate about it are more confident that those who don't have a plan or who don't discuss the financial goals and lifestyle to which they aspire in retirement.

In a survey conducted just last year of more than 1,900 Americans by Rasmussen Reports for Country Financial, 88% of respondents who said they have a financial plan also say that communication about financial matters with their spouse is positive, in contrast to only 62% of those who don't have a plan.

So if you've been putting off broaching the subject because you're afraid the conversation won't go well, take the plunge, advises Keith Brannan, vice president of financial security for Country Financial. "There's a cultural perspective we've all grown up with where companies and the government were able to care for long-term retirement needs, but the burden of financial security has shifted," says Brannan, adding that the percentage of companies offering pensions has dropped significantly over the past quarter-century. "It's not someone else's responsibility anymore."

So once you've decided to discuss retirement planning with your spouse, what do you talk about? To a large degree, that depends on whether you're male or female. While Americans of both genders tend to fall short of experts' recommendations on how much to save for retirement, they have very different strategies for trying to maximize their nest eggs, according to Kelley Gay, who is assistant vice president of family and women advocacy at MassMutual, an insurance and financial services firm, which surveyed more than 1,400 Americans in 2009 regarding their investment decisions.

"The most important thing that really popped out is men and women don't differ in terms of their financial mindset," Gay says. According to the survey conducted by Forbes Consulting group for MassMutual, women seek an active role in their investment decisions, while men gravitate toward more aggressive investments.

Taken alone, both have their place but both also fall short of being completely effective, says Gay. Riskier investing can pay off in a big way, but if the would-be retiree isn't engaged and informed about exactly how they're allocating their dollars, they could take a big loss if the market shifts or experiences a downturn (as many Americans learned in late 2008). Conversely, a desire to be involved with your investing future, while laudable, isn't enough if it doesn't come with the confidence to invest in a way that allows you to live the lifestyle you envisioned after retirement.

"Men and women have different degrees of confidence," Gay says. "We believe it's due to historical access to financial decisions." In other words, for much of the 20th century, financial and budgetary decisions fell primarily to men; for only the past few decades have women stepped into the forefront by taking an active role in their own financial planning.

"Women have been emerging as the financial leader of the household, but getting to parity takes a little bit longer," when it comes to taking the investment reins, Gay explains. Whereas women need to increase their confidence when it comes to investing in the market, men need to be more realistic about the kind of returns they can expect, since overly risky investments can backfire instead of yielding a windfall.

Consider this: Although 83% of respondents to the Country Financial survey expressed confidence that they and their spouses were in agreement about how to handle retirement budgets, a whopping 56% of them also admitted they don't know how much monthly income they'll have in retirement. And while more men said that talking about retirement budgets gets easier as they age, women say these discussions only get more difficult.

A similar disconnect holds true when researchers look across generations. Younger Americans express more confidence that they'll be able to save enough for retirement, but this changes as they get older.

"The closer you get to retirement age, the less overly optimistic you are," Country Financial's Brannan says. "And there are a couple of things that drive that." First, the relatively immediate need for that cash makes people more aware of exactly how much they've saved; they're also more concerned than younger Americans about the prospect of losing some of their investments in a market slide. As we've pointed out before, having enough to live on in retirement concerns most Americans, but many of us simply don't save enough during our working years, especially early on, to make that happen.

MassMutual's Gay says open and frequent communication is the tool couples need to bridge their differing outlooks. "It comes down to communication about what your long term goals are. Talk about the motivating factor behind decisions each spouse is making or not making," she says. "It's the motivation that needs to be out on the table." Too many couples, she says, stay silent or assume their spouse is on the same page without ever talking about the details.

Unfortunately, the same wall of silence holds sway when it comes to couples' discussing life insurance and figuring out where that fits into their retirement plan. A 2010 State Farm survey found that 74% of respondents "rarely or never" discuss the topic with their partner.

According to Gary Gilgen, a financial adviser and the director of the financial planning department at accounting and financial services firm Rehmann, both life and long-term care insurance are crucial components of a family's financial security after retirement. Yet according to the State Farm data, 30% of American families carry no life insurance of any kind, and although women are statistically likely to outlive their husbands, 64% of women in the State Farm survey expressed a reluctance to discuss life insurance, compared with 47% of men.

Having to visualize your future -- and possibly a future without your lifelong partner -- can be an intimidating prospect, but couples owe it to themselves, their families and their spouses to discuss long-term issues before they become immediate crises.


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