Romancing Retirement:
Managing Love And Money In Later Life

5 minute read

“What’s love got to do with it?,” Tina Turner famously asked. She probably wasn’t talking about money at the time — but if she was, the answer would be “a lot,” especially as we age.

According to a recent survey, the number one source of discord in couples is arguments over money. The occasional spat may be glossed over, but the more they happen the more likely they are to lead to divorce — which is increasingly common among older Americans. Since 1990, the divorce rate for people 45+ has gone up according to research from Bowling Green University while the rate for younger couples has fallen.  More striking — and spurring talk of the phenomenon is known as “gray divorce” — the rate among those over 65 tripled from 1990 to 2001.  Whether you’ve been married for decades or have partnered up later in life, are there ways to manage your relationship–and your money–to achieve harmony in both areas?

Myra Strober, a labor economist and Stanford Professor Emerita who taught a popular course called “Work and Family” and Abby Davisson (a former student who went on to marry the boyfriend she was taking the class with) say yes.  They’ve teamed up to write a new book called Money and Love: An Intelligent Roadmap for Life’s Biggest Decisions.

In their book, Strober and Davisson highlight the fact that many of the choices we make as couples (even ones we might not expect) concern both love and money.  Whether you’ve been with your partner for decades or you just started dating someone new, Strober and Davisson say there are several keys to preventing money matters from getting in the way of lasting love.

WATCH Your Money Map: Managing Love And Money In Later Life

It’s Never Too Late To Build A Solid Foundation

For couples just starting out, the authors say it’s critically important to get on the same page about finances. “We urge them to talk about money before they think they’re ready to talk about money,” says Strober. Doing so can help couples avoid major issues down the road, especially as they approach retirement and the many financial decisions that come along with it. “If a couple does that and spends their lives on the same page, or learns how to negotiate being on different pages when you come to retirement, it’s not such a shock,” adds Strober. “If you’ve spent your whole life not even realizing that you’re not on the same page, or shoving it under the rug every time it comes up, then you’ll have a real problem in retirement.”

If you’re inching toward retirement but aren’t having regular conversations regarding your finances, or about what retirement will look like (or cost) for you as a couple, it’s not too late. Oftentimes, the best way to get the conversation started is by working with a third party, the authors say. “Financial advisors, couples therapists, financial therapists…there’s a whole range of experts out there who can be helpful in shifting the dynamics,” says Davisson. “We are big advocates of working with someone to help you sort through some of those challenges.”

The Changing Nature Of Pre-Retirement

As ALI has highlighted in its new research report, The Peak 65® Zone is Here – Creating a New Framework for America’s Retirement Security, retirement as we know it is changing. But so are the years leading up to it.  With Americans realizing they’re both living and working longer, many are deciding to pursue joy in the moment — not putting it off until retirement.

For Davisson, the realization of just how important this is came when her mother had a life-altering accident the day before she retired. “That absolutely affected and imprinted the way I think about my career and caused me to make some very dramatic changes, including leaving the job that I worked in a full-time corporate career for a decade,” explains Davisson, who led Gap Inc.’s corporate foundation. “I knew that I would regret not following a more entrepreneurial path.”

Making A Big Decision? Know The “Five C’s”

Whether it’s deciding where to retire or if you should work part-time in retirement, Strober, and Davisson say there’s a framework we can all use to make big life decisions. They call it “5 C’s,” and suggest following the steps below to help frame the major choices you face as a couple. (Note: Although these were developed for couples, they’re helpful no matter what your relationship status happens to be):

• Clarify: First, take some time to think about what you want–and you don’t want–by self-reflecting.
• Communicate: Talk with those who will be impacted by your decision and take their feedback into account.
• Choices: Broaden your perspectives and make sure you’re evaluating all options.
• Check-In: Ask trusted friends and family for their advice, guidance, and resources.
• Consequences: Consider the effects of your decisions and how they may impact all aspects of your own life, as well as your life as a couple.

As you make decisions using the “5 C’s” it’s critical to be self-aware. For example, if you’re impulsive, put some “guardrails up,” suggests Davisson, so you force yourself to think things through. On the other hand, if you’re someone who overanalyzes and takes a long time to make a decision, set a deadline. Pick a date in the future to revisit the issue at hand. At that time, be prepared to make a decision.

Work With Your Financial Professional To Define Yours, Mine, And Ours

Finally, it’s important to consider that for many people these days marriage isn’t a once and done affair.  For those who are married, but not for the first time, there are other complexities to consider.  The combining of two families, as well as answering the question of how children and stepchildren fit into the picture. “What does that mean for finances? And what does that mean for trying to minimize future discord when one of these people passes away, the other one is still alive and all the stepchildren are around? It’s an enormous problem and people don’t think it through,” notes Strober.

To address the issue, Strober and Davisson say financial professionals should work more closely on family-related matters with their clients. “So when they counsel their clients about finances, the conversation is broader,” notes Strober. “It includes family issues…what we put under the rubric of “love,” as well as the strictly financial issues. They’re all intertwined.”

 

Find out where you and your money stand when it comes to retirement with these simple tools and guides.