If you ask people what creates stress in their lives, money is often at the top of the list. Stress in America: Paying With Our Health found money was a somewhat or a very significant source of stress in the lives of 64 percent of Americans, primarily parents, younger generations, women, and lower-income households.
In many cases financial stressors are exacerbated by a lack of communication. After examining the answers of 1,800 Americans who are in relationships, NerdWallet.com determined lack of communication, in tandem with a failure to save and too-conservative investment choices, has contributed to many couples’ lack of retirement readiness.
We tend to skim the surface when talking about retirement and never delve deeply enough into the topic to develop an actual plan that will help make retirement a reality. For instance, do you know how much your spouse/partner is setting aside for retirement? Does he or she know how much you’re saving?
America may be the home of the brave but we’re not very courageous when it comes to talking about finances. Last year, Time Magazine reported, “Most Americans would rather have a talk about the birds and the bees than any conversation related to finances.” If you’re one of them, and a life goal is retiring comfortably, then you need to reconsider your position.
Americans actually talk about money a lot in general conversation. Think about it. How many times have you talked about tuition, the cost of food or gas, income, interest rates, taxes, the economy, stocks, banking, loans, or a similar topic? People talk about money all the time. However, when the conversation turns to specifics, they often get uncomfortable.
Even if conversations about money trigger discomfort, it’s important for couples to have them.
The goals of the conversation, and it may take several conversations to reach these goals, are to develop a shared vision for retirement and a plan for achieving it. You’ll need to talk about how much you have saved already, how much you need to save (this may require you to examine spending patterns and identify ways to save), how you want to invest those savings, the sources of income you’ll have during retirement (Social Security, pensions, etc.), and when and how you’ll generate income during retirement.
If discussing money is an issue, then engaging a neutral third party to lead the discussion may help. A good candidate is your financial advisor, particularly if he or she has experience with retirement planning.
Once you have set goals and expectations for retirement, determined how much money will be needed, shared how much money you are saving, learned how much your spouse or partner is saving, and talked about how your savings are invested, you can work with your financial advisor to develop a retirement plan. Remember, having a plan is not enough. You must implement the plan to reach your goals!
Securities offered through LPL, Member FINRA/SIPC. Investment advice offered through Private Advisor Group, a registered investment advisor. Private Advisor Group and Antoine Williams & Associates Financial Services are separate entities from LPL Financial. This material was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.