Find your sounding board for retirement planning

Professional financial planning increasingly emphasizes the importance of including both spouses in planning conversations.  This helps ensure their individual expectations for retirement are on the same wave length. Each has input on family as well as personal goals. Sometimes the unexpected will arise in these planning conversations and the couple benefits from the availability of time to resolve differences since they have not yet retired and feedback from a third party, in this case the financial planner, can be helpful in working through differences. Although the professional adviser can share experiences of others who have grappled with similar challenges (while protecting confidentiality of course), they are limited on the depth of feedback they can or should provide regarding personal goals.

More recently retirement research has determined that spouses who plan together in their pre-retirement years are more likely to experience a satisfying retirement. Curiously the health of the couple’s relationship is not a factor in this successful outcome. In other words, they don’t need to be a happily married couple in order to prepare well together for retirement. As the research points out, no one knows exactly what these couples are talking about when they do plan their retirement. It’s just the fact that they talk about retirement that makes the difference, as long as there are no financial problems. It is important to note that in this study money was not an issue otherwise the outcome may have been quite different.

The research allows us to speculate that couples, regardless of the health of their marriage, are a sounding board for one another. Singles may not have a similar sounding board.  There is no one person who knows their history, their preferences and can use these insights to challenge their plans. This may mean that singles are at greater risk of retirement dissatisfaction if they don’t receive similar feedback during their planning. Considering that there are many more people who are single at mid-life than in previous generations, this could be problematic for the next wave of retirees. Long-term friends or even siblings may be adequate substitutes but research hasn’t explored this. Since research is lagging the reality of pre-retiree demographics, singles need to take it upon themselves to find an approach that helps them prepare. They might consider the sounding-board approach, finding someone who will challenge their responses to:

• How will you spend your time in retirement after that holiday feeling fades?  Have you ever done this before and if not, why not?
• What groups or individuals do you want to be involved with?  Are you already connected with them and if not, how will you make this happen?
• Do you need to relocate and if so what relationships and community ties will be severed and what are the implications of this?
• What’s stopping you today from doing any of the above?
• Is this affordable?

See MoneySense’s Director of Fee-only Planners

Lee Anne Davies has worked as a consultant for insurance, wealth management, banking and financial education companies. She has a PhD in Aging, Health and Well-being and a Masters of Arts (MA) in Gerontology and Health Studies from the University of Waterloo and an MBA from Athabasca University’s Information Technology Management program. She’s also successfully completed the Canadian Securities Course and the Professional Financial Planning Course. To read more from Davies, visit her blog Agenomics.