Delaying a key conversation with your spouse or partner can lead to serious future financial problems. Here are three questions to get you started.
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Though the vast majority of couples claim to communicate well about finances—more than 80 percent of respondents in a recent Fidelity Investments survey describe themselves as one financial entity—there’s often a deep disconnect between spouses on such financial fundamentals as whether decisions are made jointly, whether accounts are held jointly, the type of retirement desired, and whether their partner can handle the finances alone if anything happened. Even more concerning, only 28 percent of couples are completely confident that their partner is prepared to assume responsibility of their joint retirement finances, if necessary.
“Many of my clients can view each other’s accounts but can’t act on them,” Mary Ryan, a senior financial adviser with Vanguard, said. Make a list that includes, at a bare minimum: the numbers and passwords of your financial accounts; account numbers for life and disability insurance policies, as well as the contact information, and the password for your cell phone. If you don’t want to have a printed copy lying around, store it on your computer. Just remember to tell your spouse how to find it.
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Due in part to today’s uncertain economy, family members are increasingly turning to each other for financial help in times of need. According to a recent study, six out of 10 people 50 and older are providing financial support to family members, including adult children (68 percent), grandchildren (26 percent), parents and/or in-laws (16 percent), siblings (13 percent), and other relatives (14 percent). But being the “family bank” can have a big impact on your own retirement plans. Rather than indulge in indiscriminate generosity, it makes sense to strategize your support. Consider possibilities that you can plan for in advance, such as financing a 529 plan for your grandchildren or making an annual, tax-free gift of $14,000. Other options: Subsidize your adult children’s health insurance or give the gift of paying for bills that are outstanding.
A version of this article appeared in the October 2014 Consumer Reports Money Adviser.
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