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  • CFO Magazine

Can This Retirement Be Saved?

When spouses disagree about when, where, and how to retire, each may wonder just what they were working for all those years.

Whether you are contemplating retirement in the near term or further down the road, you’ve no doubt run plenty of numbers, from asset-allocation percentages to investment returns to vesting schedules. Maybe you’ve even taken a guess at your estimated lifespan.

But you may not have calculated the potential damage to your marriage. According to a recent survey by Fidelity Investments, 41 percent of married couples disagree about whether one or both of them will work in retirement, and more than a third argue about when to retire. During the first two years of retirement, according to a 2001 Cornell University study, couples fight much more and are significantly less satisfied with their marriages. “When we ask couples to describe how they envision retirement, one starts talking and then looks over and sees the puzzled look on the other one’s face,” says Helen Modly, a certified financial planner and executive vice president at Focus Wealth Management. “And that’s the end of that conversation.”

Not all couples are at odds over how they’ll spend their retirement years. “We like to say we grew up together and developed similar interests over time,” says William Steul, 65, who retired last October as CFO of Eaton Vance Corp., a financial-services firm in Boston. He and his wife, Judy, married for 43 years, have mapped out a retirement that combines continuing involvement in the business world with volunteer activities, trips to visit their children in London and San Francisco, and plenty of sailing.

Idyllic? Yes. Possible? Yes. Easy? Not necessarily.

The prospect of a longer, more active, and more affluent retirement creates expectations that are vastly different from those of previous generations. New York Times columnist David Brooks recently noted that whereas there used to be simply adulthood and old age, a new life phase, “active retirement,” has emerged. Many retirees embrace the concept, forging elaborate plans for their postwork years that may lead to problems if spouses have different ideas.

It can be so daunting that people may prefer to simply keep working. A survey from Phoenix Wealth Management found that 44 percent of high-net-worth individuals plan to work at least part time in retirement, while only 40 percent plan to retire full time. That marks the first time that those planning to retire full time actually constitute a minority. And while an enjoyment of work certainly factors into their plans, Modly says that in many cases couples “don’t want to face the reality that they don’t have a workable plan for living together without work.”

That reality can be bleak: in the United States, the divorce rate is highest among those 55 and older. An analysis by Prince & Associates found that, among high-net-worth individuals, concern about losing money in a divorce or family conflict increased in direct proportion to wealth.

So Many Questions

While it can be difficult to ascertain how much of that discord can be traced to retirement issues, there are certainly plenty of things to disagree about, beginning with when to retire. The Cornell study found that marital conflict early in retirement is worse when spouses retire at different times, yet it’s not always practical — or desirable — for both members of a couple to retire at the same time. A common scenario: the husband is ready to retire just as his wife, after taking time out to raise children, is hitting her stride at work.

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