Alex Murguia, PhD

For Couples, Not Talking About Money Can Be Costly

I was stunned to read the first paragraph of this article.

“Do you know how much money your spouse makes? …According to a biannual retirement survey of over 1,000 couples by Fidelity Investments, it’s a question 43% of couples can’t answer—up from 27% in 2013.”

Other interesting data points:

“Although 72% of couples say they communicate “exceptionally or very well” about their financial lives, 36% provided differing estimates when asked about their investable assets, 47% disagree about the amount they will need to save for retirement, and 60% have no idea what to expect in the way of Social Security benefits.”

As I read this, I came to the simple conclusion that hope is not a strategy. Focusing on just your capital markets knowledge as a basis for your financial acumen misses the point. Investing is not done in a vacuum. We don’t have clients that come to us and say; “We have $1 million and we want to see it become $7 million.” That is not how it works. Couples have financial goals that they want their investments to subsidize.

Many of the above mentioned couples can circumvent the anxiety that comes with this lack of knowledge by putting a financial plan in place. That starts with a dialogue with your partner on what you want to accomplish with your wealth. Then, it is a matter of taking inventory with your partner of your assets and current expenses.

Without this inventory, you leave yourself vulnerable to anxiety because you have no idea what you need to accomplish for your objectives. What you need to accomplish relative to what you have establishes the shortfall that your investment strategy must fill. From there, it becomes a dynamic between setting potential income floors and determining the right risk-return profile for your investable assets.

Because these paths take a lifetime, you will be constantly correcting your course to accommodate “life’s rich pageant” (for our REM fans). There are a few constants needed for success. Some of them you can control and some you cannot. Transparent communication is within your control. Ultimately, the end game is to enjoy the financial flexibility that your wealth provides.

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