Four questions retired couples should ask themselves about their finances—today

If the financial steward dies or becomes mentally incapacitated, the surviving spouse is too often left in a state of financial confusion. (Image: Pixabay)
If the financial steward dies or becomes mentally incapacitated, the surviving spouse is too often left in a state of financial confusion. (Image: Pixabay)

Summary

Too many couples don’t have these crucial money conversations until it’s too late, write these married reporters.

Among older couples, one spouse often oversees the family finances. The other doesn’t worry so much about it.

Until it is too late.

If the financial steward dies or becomes mentally incapacitated, the surviving spouse is too often left in a state of financial confusion. In particular, wives stand a good chance of being thrust into the role during widowhood, because average life expectancy for women in the U.S. is nearly six years longer than it is for men.

Advisers encourage couples to share their financial information and responsibilities for that very reason. Getting there, however, can require some hard work—and open discussion.

In our case, we have been married for almost 52 years. Michael retired well before Joann, leaving ample time for him to focus on our finances and apply investment knowledge gained as a journalist covering financial markets for Dow Jones Newswires. Though Joann also is a veteran business writer and former career columnist for The Wall Street Journal, she found taking personal investment risks stressful and was puzzled by some of the ways Michael managed their assets.

We have successfully worked through a lot of our financial issues as a couple, learning along the way what conversations are the most productive. To that end, we offer four questions we think couples should ask themselves to avoid the survivor trap that so often plagues couples when the financial steward must be replaced.

1. Do we talk enough about our money?

Marital partners frequently carve out distinct roles.

Joann long paid household bills and balanced our checkbook. But she delegated oversight of her 401(k) to Michael and rarely questioned our financial adviser during meetings. She admits it was because she feared her limited investment knowledge would make her sound stupid.

Investment reports can seem daunting, says Justin Flach, managing director of wealth strategy in the San Diego office of U.S. Bank’s Ascent Private Capital Management division. Before discussing specific investment strategies, a couple can start by talking about shared financial goals, Flach suggests. Goals might include setting aside money for overseas travel, gifting funds to family members or donating to favorite charities.

After jointly developing a financial plan, review it together at least yearly. Heather Osborn, the Nashville-based director of wealth planning at Baird, proposes a deeper dive at least every five years—or immediately after a life-changing event such as selling a business or retiring.

We often discuss our financial goals, which have shifted a little. We now have three grandchildren with “529" education-savings plans that regularly receive our contributions. We have also decided to spend more on international trips sooner rather than later.

2. Are both partners on the same page about investment risk?

It can be a problem if spouses have different levels of tolerance for investment risk. Eric Kirste, a principal wealth manager at Savvy Advisors in New York, says he has seen divorces result from conflicts caused by different investment philosophies.

David Salsburg, founding partner at Gresham Partners in Chicago, says one spouse shouldn’t accept more investment risk than he or she is comfortable with just to go along with a partner. One way to satisfy both spouses, he says, is to set aside enough assets in a conservative bond portfolio to meet their income needs while putting the remaining portion into higher-growth, and thus riskier, investments.

A spouse who lacks financial expertise needed for riskier moves could gain confidence by opening a brokerage account in his or her own name and buying shares of a few companies, mutual funds or exchange-traded funds, says Blair duQuesnay, a senior adviser at Ritholtz Wealth Management in New York.

Joann long kept silent about her lower risk tolerance. But in late 2023, she asked Michael to trim the stocks in her retirement account because she worried that year’s big market gain might presage market pain. She now says our frank discussions about our attitudes toward risk have helped her better grasp the role that investment risk plays in pursuing our strategic goals.

3. Is there a backup plan if the financial steward dies first or develops dementia?

If Michael couldn’t continue overseeing our assets, Joann hopes our son, who is an attorney, would help guide her decisions. But when we raised this idea with our son, he expressed concern that this kind of advisory role might unfairly exclude his sister.

Experts point to other possible downsides of enlisting a family member’s assistance. For instance, this relative must be prepared to perform time-consuming tasks. The person also must be trusted by other future beneficiaries of an estate, says Flach of Ascent Private Capital.

Our plan now is to have our son assist Joann, supported by a financial adviser, whose neutral presence offers assurance that both siblings are being treated fairly.

To develop a good advisory relationship, both spouses should be involved in choosing and working with that professional, experts say.

4. Are good financial records being kept?

In our household, we recently reorganized financial files, adding investment account information and maturity dates for bonds. But we keep discovering information gaps. When Joann wanted details of our water-utility account, we realized that Michael had stored its password in an unusual location.

Anyone who needed to quickly take over our financial affairs could face similar problems. For example, this person would have to know how to get access to password-protected financial websites, possibly by using our cellphones for two-step verification.

Salsburg of Gresham Partners recommends creating a “just in case" binder, placing it in a safe location and informing family members about how to access it. The binder should list owned assets, how they are titled and names and phone numbers of important contacts such as advisers and account administrators. Also useful would be a list of major regular expenses, including utility bills, mortgage payments and property taxes, as well as how those were being paid, Salsburg says.

If one spouse has been paying all the bills, set aside time as a couple to go through records such as credit-card and bank statements to capture all items and passwords. Pulling this information together can be tedious, but it is then much easier to maintain and update.

There is a critical detail about credit cards both parties should know about: When the primary account-holder for a card dies, that card cannot be used for any further transactions—even if the surviving spouse is designated as an authorized user. Someone who ignores that prohibition could be held liable for fraud. The surviving partner must have a new card issued in their own name.

Joann recently got a credit card in her own name. Through Savvy Ladies, an educational nonprofit for women, she also recently took an online class about investment strategies— and scored 83% on the final quiz. These two minor declarations of independence boosted her financial confidence in a major way.

Michael A. Pollock and Joann S. Lublin are writers in Pennsylvania. They can be reached at reports@wsj.com.

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