For people on a retirement journey, a life partner may not just be a reason to live, but also a reason to plan
As financial advisors with married clients are well aware, money is at the root of many conflicted and strained relationships. Whether it’s due to differences on how to prioritize expenses, how to manage debt, or what goals they should save for, a lot of marriages end in divorce because of such financial concerns.
With all the tension that comes from sharing one’s financial fate with someone else, people may wonder whether love is really all worth it. A new survey suggests that, at least from a retirement-planning perspective, it actually is.
According to data from US-based Global Atlantic Financial Group’s Retirement Spending Study, retirees who are married or living with a significant other have fewer financial regrets than those who are alone. That includes retirement planning regrets, which were reported by 64% of single retirees but only 49% of those in relationships; regrets over not saving enough money (45% of single retirees vs. 30% in relationships); and regrets in relying too much on Social Security (28% vs. 15%).
“The findings may speak to the human tendency to want to plan better when the wellbeing of a loved one is involved,” said Paula Nelson, president, Retirement at Global Atlantic. “Regardless of relationship status, individuals who are saving for retirement would benefit from working closely with financial advisors to assess their retirement income needs and consider different strategies for generating that income.”
While the study didn’t look into how open and honest couples about their finances, it found that retirees in loving relationships have more diverse income streams than their single counterparts. Among the respondents to the survey, 24% who are married or cohabiting reported having an annuity, as opposed to only 15% of those who aren’t. The same basic story played out when It came to defined-contribution plans (33% vs. 17%), investment portfolios (39% vs. 19%), and savings accounts (58% vs. 42%).
Another important distinction was that retirees in relationships were less likely to cut back on discretionary expenses, which included:
- Restaurants and entertainment (39% of participants in relationships vs. 56% of single respondents);
- Travel and vacations (33% vs. 43%);
- Charitable giving (23% vs. 28%); and
- Housing (14% vs. 33%).
“While those in relationships may have some financial advantages, single people can absolutely thrive in retirement,” Nelson said. “They can mitigate the risk of facing financial regrets by diversifying their income streams. For example, they may consider annuities to add protected income streams that they can collect for the rest of their lives.”
