How to keep your marriage financially pure!
Baby Boomers and Financial Infidelity
by Gary Foreman
How to Stop an Overspending Spouse
Reducing Expenses After Retirement
Baby Boomer's Financial Timeline
Financial infidelity! It can be just as devastating to your marriage as the other kind of infidelity. And, according to a 2016 study, 42% of Americans admit to being financially unfaithful with 75% saying financial deceptions have affected their relationship!
Baby boomers may be particularly susceptible to financial infidelity. Most are making multiple financial decisions. And retirement is a time when most couples review their finances, which would reveal any hidden accounts.
To help us understand what baby boomers need to know about financial infidelity and how to avoid it, we contacted Marlow and Chris Felton, authors of The Prosperity Factor and Couples Money.
Q: As baby boomers approach retirement, they're making more financial decisions now than at any time since their 20s. Does this pose any risk for married boomers?
Marlow and Chris Felton: Absolutely. Many baby boomers are finding out they are not as prepared for retirement as they thought. This often puts stress on even the best relationships and starts the "blame game." Many boomers are forced to make financial decisions they never thought about or planned for. They are more than likely thinking about their finances more now than at any other time in their life, and finding out they are not as prepared as they need to be or, in many cases, not prepared at all.
Q: You emphasize that couples need to communicate. Are there certain financial topics that boomers should discuss? And, if so, what are they?
Marlow and Chris Felton: Many boomers are behind on retirement savings and are looking for additional streams of income. Many baby boomers are still very active and healthy, so fortunately many are still able to create income. It is important for boomer couples to brainstorm about creating another (or multiple) streams of income, rather than focusing on the lack of retirement savings. They should also take into consideration their potential to live longer than they expect and that they can potentially have more health related expenses and/or nursing home costs than they expected. They need to be open to finding a solution for this issue, making the conversation about creating multiple streams of income more important.
Q: Often retirees find both their income and expenses are reduced. Is that a potential problem for boomer couples?
Marlow and Chris Felton: It is difficult for most people to live on less money. This can put stress on a relationship when a new budget has not been agreed upon. We see many couples continue with their old spending patterns in retirement, only to sacrifice their nest egg. This can be more destructive when one spouse is doing more of the spending (which happens a lot!). Resentment and anger can weigh on even the best relationships. Also, expenses may be reduced initially. However, boomers are at risk of their expenses going up significantly in their retirement due to inflation, medical, or long-term care expenses.
Have you started preparing for retirement?
Our pre-retirement checklist will walk you through the steps you need to take.
Q: What are the main sources of financial conflict for couples?
Marlow and Chris Felton: Spending! Couples argue about spending more than anything usually, complaining about what the other is spending money on. This is why we believe segregating funds as a couple is so important. That way, you have funds earmarked for certain categories and it becomes more evident where money is being overspent. It also creates more accountability.
Q: Are there warning signs that your finances are doing real damage to your marriage?
Marlow and Chris Felton: Yes. They include revenge spending, financial infidelity, hiding purchases, and lying about purchases. Also, when couples are not willing to have a financial conversation, that is a big warning sign. Couples desperately need to be on the same page with their finances, just as they would be on the same page with any other important issue as it relates to their relationship.
Q: Are there any habits or practices that couples with a healthy financial relationship often exhibit?
Marlow and Chris Felton: Healthy relationships are built on trust. The healthiest financial relationships are transparent, share well, and are willing to compromise. They share their wants, desires, goals and dreams and take the other's needs into consideration when making financial decisions. They are open and honest with each other and communicate on a regular basis about money.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
Take the Next Step:
- Determine if debt could derail your retirement and what you can do about it now. Our checklist can help you. Afterall, one of the most important ingredients for a comfortable retirement is to be debt free when you retire.
- Use this tool to maximize your retirement by determining the best age to take your Social Security benefits. Don't leave thousands on the table by taking Social Security at the wrong time.
- Subscribe to After 50 Finances. You've learned how to work smarter, not harder. This weekly newsletter is dedicated to people just like you. Subscribers get a FREE copy of our After 50 Finances Pre-Retirement Checklist, a list of everything you need to do to be ready for retirement.
Share your thoughts about this article with the editor.
Baby Boomer Tools & Resources
- A tool to determine the best time to take Social Security benefits
- Get out of debt before you retire
- Get free answers to financial questions
- Get free answers to legal questions
- Retirement shortfall calculator
- Life expectancy calculator
- IRA required minimum distribution calculator
- More retirement planning calculators
Trending in Baby Boomers
- Investing retirement money that you may never need
- Financial tips when nearing retirement
- Why pay off your mortgage with a reverse mortgage loan?
- 3 ways retirees can tap into their home equity
- 5 steps to an easier senior move
- Tax considerations for those retiring outside the U.S.
- 6 ways boomers can help grandkids pay for college
- This week's Readers' Tips