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Fidelity® Couples Study Uncovers Disconnects on Retirement Expectations, Social Security—and Even How Much the Other Half Makes

4 in 10 Miss the Mark on How Much their Partner Earns; Study Shows Planning Together Makes a Big Difference; Fidelity Offers Solutions to Help Couples of All Ages Build Stronger Financial Lives

BOSTON – When it comes to how much money your other half makes, how close could you get to the actual figure? According to Fidelity Investments®' 2015 Couples Retirement Study, although the overwhelming majority of couples (72 percent) say they communicate exceptionally or very well when it comes to financial matters, more than four in 10 (43 percent, up from 27 percent in 2013) couldn't correctly identify how much their partner makes—and of that, 10 percent were off by $25,000 or more. Which begs the question: if so many couples can't get this most basic item in their financial lives correct, what other disconnects exist that are unknowingly causing cracks in their financial foundation? (Note: an infographic on key findings can be found here; go here for a video on couples testing their financial compatibility.)

The biennial survey, which has been conducted since 2007 and is unique in testing agreement between married partners and those in long-term committed relationships on communication and knowledge of finances and retirement planning issues, identified a number of other critical misunderstandings and knowledge gaps. Such as:

  • 36 percent of couples disagreed on the amount of the household's investible assets.
  • When asked how much they will need to save to maintain their current lifestyle in retirement, nearly half (48 percent) have "no idea"—and 47 percent are in disagreement about the amount needed. This level of disagreement is highest among those who are closest to retirement—Baby Boomers (born 1946-64).
  • 60 percent of couples and almost half (49 percent) of Boomers don't have any idea how much their Social Security benefit might be, even though the information is readily available on the Social Security website.
  • Couples aren't on the same page when it comes to describing their expected lifestyle in retirement—with one in three disagreeing about how comfortable that lifestyle will be.

"We know couples don't always agree when it comes to money, but we were surprised how many missed the mark on the question of their partner's salary," said John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity. "If gaps exist around basic questions like salary, couples might have other opportunities for improvement on the financial front, such as sorting through and tackling important issues together around the next big milestones in their lives, how and where to spend retirement and later-in-life issues involving eldercare and estate planning. By taking time to engage in conversation and plan, your chances of creating a strong foundation and achieving your goals are greatly enhanced."

American Couples Worrying More, Planning Less

A strengthening economy is apparently not enough to ease anxiety about rising costs in the future. In fact, nearly three-quarters (74 percent) say they worry about being able to afford unexpected health care costs in retirement, up from 70 percent in 2013. More than half (51 percent) worry about outliving their savings in retirement, a number that is significantly higher than what was reported in 2013 (42 percent).

Despite these concerns, only 21 percent have developed a retirement plan to ensure they do not outlive their savings and the number putting off planning is on the rise, with 36 percent indicating they haven't even thought about doing so yet (up from 28 percent in 2013). In addition, despite the fact it's the top concern, 37 percent have yet to consider the impact of potential health care costs on their savings in retirement (up from 30 percent in 2013). For younger investors, only 11 percent of Generation X (born 1965-1978) have developed a plan, although some will be approaching retirement in 10-15 years. This lack of cooperative planning between couples may be a major contributor to a general lack of knowledge and heightened anxiety around retirement, according to Sweeney.

The good news: the results strongly suggest planning for the future can go a long way toward achieving greater peace of mind and alignment as a couple. By and large, those who have a detailed plan in place feel far better about their retirement prospects:

People who have a Retirement Plan in place are: With Without
Twice as likely to expect to live a "very comfortable" retirement 42% 18%
More likely to be "completely confident" in assuming full financial responsibility for retirement if needed 67% 42%
More likely to be "completely confident" in their partner's ability to assume full responsibility 63% 43%
Less likely to have "no idea" when it comes to how much they need in retirement 28% 54%

Financial Advice for Younger Couples—and for Couples at Every Stage

"When we asked couples for their best advice to younger couples about handling finances, the top suggestions were to save as early as possible for retirement and make financial decisions together, " said Sweeney. "Clearly, the findings show that couples of all ages—from those just getting married to those approaching retirement—feel financially stronger when they heed this advice and take the time to plan together. When couples do, they clearly feel more confident, more closely aligned and better equipped to take on the future."

Fidelity suggests partners of all ages set aside time to make sure that, in addition to salary, they feel equipped to answer the following:

  • What are those next big goals? All stages of life come with big financial milestones, whether it's buying a new home, saving enough for the kids to go to college, or having enough to retire. Work together to identify what you want to achieve in the next 3-5 years, how much you can realistically afford, and make disciplined saving a habit to achieve your dreams. For a fast and simple way to check how your budget is doing, here's a free checkup tool.
  • Have you set aside money for an emergency fund? You never know when life is going to throw you a curve ball, such as a job layoff, an illness or even the furnace malfunctioning or car breaking down. Fidelity recommends setting aside money for an emergency fund—three to six months' worth of living expenses.
  • Do you have a shared vision of what your retirement might look like? Are you looking to travel the globe or simply tend the garden at home? Do you want to downsize and live near your kids or at least live in the house where they grew up, or pack it up and move to a warmer climate? Talk it over, make sure you are the same page and start planning how you can afford that vision.
  • Are you prepared for the unexpected? No matter what your age, it's best to plan for the inevitable, which is why it's important to have discussions around topics such as inheritance, estate planning and eldercare arrangements to ensure your wishes are carried out. Key documents every couple should consider include a will/estate plan, a durable general power of attorney and a health care proxy. In addition, designating a beneficiary for investment accounts and insurance policies is important, because it can help avoid complications in the event of a death or divorce, or the assets going to probate.

Want to Know Where You Stand?

Fidelity offers an interactive Couples Quiz to help couples learn more about their financial personalities, which can be taken separately and then shared with your significant other, to compare your responses and see how you stack up. Upon completion, a Conversation Starter guide can help you more easily navigate the retirement process together. The quiz is available for desktop, tablet and mobile users at www.fidelity.com/couplesquiz.

Fidelity offers other resources, including a Fidelity Viewpoints article on "Four things to talk to your spouse about now," which provides additional information on essential financial questions every couple should ask. Other related Viewpoints articles include "Five ways to protect what's yours," "Money lessons from three families," "Meet a family that plans together," "Five financial tips for newlyweds," and "When the family's financial boss dies." In addition, online retirement guidance and planning tools provide easy ways for couples to tell if they are on track to meet goals. People can discuss short- and long-term savings strategies with a Fidelity investment professional at one of Fidelity's 183 Investor Centers or by calling 1-800-FIDELITY (1-800-343-3548).

Curious to learn more on how to talk to your partner about money? Join @SweeneyFidelity and @Fidelity for a live Twitter chat on Couples & Money (#FinancialBliss) on June 30 from 2-3:00 p.m.

For more information on Fidelity Investments' fifth Couples Retirement Study, a fact sheet (PDF), video and infographic (PDF) can be found on Fidelity.com.

About the Study

The 2015 Fidelity Investments "Couples Retirement Study" analyzed retirement and financial expectations and preparedness among 1,051 couples (2,102 individuals). Respondents were required to be at least 25 years old, married or in a long-term committed relationship and living with their respective partner, and have a minimum household income of $75,000 or at least $100,000 in investable assets. This online, biennial study was launched in 2007 and is unique in that it tests agreement of both partners in a committed relationship on communication, as well as their knowledge of finances and retirement planning issues. Fidelity Investments was not identified as the sponsor. GfK's Public Affairs & Corporate Communications division executed the study, which was fielded in April 2015. For more information on Fidelity Investments' fifth Couples Retirement Study, a fact sheet (PDF), video and infographic (PDF) can be found on Fidelity.com.

About Fidelity Investments

Fidelity's goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.3 trillion, including managed assets of $2.1 trillion as of May 30, 2015, we focus on meeting the unique needs of a diverse set of customers: helping more than 24 million people invest their own life savings, nearly 20,000 businesses manage employee benefit programs, as well as providing nearly 10,000 advisory firms with technology solutions to invest their own clients' money. Privately held for nearly 70 years, Fidelity employs 41,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit www.fidelity.com.

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