In many marriages, one spouse will often take the lead in handling the couple’s financial tasks, including retirement planning, while the other is happy to let the finance person handle all the details.
This can be frustrating to the planner spouse. Not only could the less interested spouse be vulnerable if something happened to the “money person,” but decisions about your future should be made jointly.
So how do you bring a partner who just doesn’t like dealing with finances on board with your financial planning? The Retirement Budget Calculator can help.
In addition to using the RBC to design your retirement spending plan, you can also use it to introduce your beloved to the pleasures of financial planning. Here’s how:
Start by Dreaming Big
Suggesting you and your sweetheart spend a romantic evening totaling up your living expenses may result in them leaving a person-sized hole in the nearest wall as they make a speedy exit. Which is why it’s important to start your campaign to encourage joint retirement planning with something more fun: dreaming about the things you both want to do most.
So have a big dream conversation together. Over a nice dinner, ask your spouse where they most want to travel in retirement or what they would do with an unexpected million dollars. You can both have fun with conversation, since it’s thrilling to think about these kinds of dreams, and it’s far removed from the types of painful or boring discussions your spouse may associate with financial planning.
Pick a Dream and Crunch the Numbers
After your big dream conversation, you can start using the Retirement Budget Calculator to plan. Let’s say your partner told you about their lifelong dream of getting a Master of Fine Arts, which they think is just an impractical, pie-in-the-sky fantasy.
Show them that not only do you take their dream seriously but that it’s achievable. Ask your spouse how much their preferred MFA program would cost and when they would like to attend.
With those numbers, you can create a new spending category for the MFA in the RBC Budget Data page. (You’ll likely want to put this expenditure under the Giving & Miscellaneous category, although the calculator allows you to create your own expenditures in any category.)
Now you can invite your spouse to come play with the numbers with you. Determine how you can afford their advanced degree by working together to fill in the monthly budget on the RBC. It’s much easier for them to buy in to the process when you center the conversation and initial calculator usage around your spouse’s dream.
Even if your spouse isn’t interested in the nitty-gritty details of entering monthly expenditures, ask if they’ll help you look over the budget categories as you take care of the “boring” stuff. Make it clear that you want their opinion about how to free up money.
Using their big dream as a budget line item can be a great way to help them see how the calculator can help organize your finances and make dreams more achievable.
Timing Is Everything
Of course, the Retirement Budget Calculator is more than just a tool for monthly budgeting. It shines in helping you plan for your retirement income and expenditures so you can estimate how long your nest egg will last.
As with the budgeting specifics, it’s likely that you will be the one entering the numbers in the Assets & Liabilities section of the RBC. Go ahead and do that yourself—but then ask your spouse to come help you figure out timing. Ask them when they want to retire and enter that information into the calculator.
Then you can show them the RBC Future View tab, which details what your projected retirement income will be, year-by-year, from the day you retire through your life expectancy.
Making Adjustments
If your current investments aren’t enough to fund the retirement you both want, invite your spouse to help you figure out how to make it work. There are four things you can try to shift in order to make your nest egg last longer:
1. Invest in securities with higher potential returns. (This comes with higher potential risks, as well.)
2. Invest more money for retirement.
3. Push back your retirement date.
4. Reduce your monthly expenditures.
The Retirement Budget Calculator allows you adjust each of these numbers and see how they affect your annual retirement income.
If you want to shift some of your investments into securities with higher potential returns, go to the Assets & Liabilities tab and navigate to the Liquid Investable Assets. For each account that you would like to increase your potential return, you can manually enter a rate of return for each account whose returns you hope to increase. Once you have done this, head back to the Future View to see how it would affect your retirement income.
Alternatively, you can adjust the number in the Future View tab by toggling the Estimated Growth Model to 70/30 Stocks/Bonds -Aggressive. Switching to the aggressive growth model can show you the potential changes to your retirement income.
(Please remember, however, that aiming for higher potential comes with higher risk of losing principal.)
If you can afford to invest more in your retirement portfolios, go to the Budget Data tab and navigate to Deductions. Increase the monthly deduction amount for each retirement account you can afford to send more money to. Then switch back to the Future View to see how it changes your retirement income.
If you’d like to play around with your retirement date, head back to the Time tab and try pushing back your last work day to see how that timing affects your annual retirement income in the Future View tab.
And if you’d like to see how your nest egg will fare if you reduce your monthly expenses, simply make adjustments to each expenditure you can reduce in the Budget Data tab. Under that tab, you can change the amounts you pay monthly, put an end date on monthly expenditures that you intend to stop making, or even adjust the amount of inflation you expect to see per year. Each of these adjustments will affect your annual retirement income and you can see those changes in the Future View tab.
Invite your spouse to see how each of these changes affect the Future View. Even for someone who is less than enthused about inputting numbers, there is something very satisfying about seeing the changes you can make to your future finances with little tweaks today. The RBC spells out exactly what to expect for your annual retirement income by year, which means that satisfying sense of improvement feels very real.
Money, Marriage, and Retirement
It’s natural for one spouse to take over a task because the other spouse isn't interested in it, and that seems especially true with financial planning. But retirement planning needs to be a joint endeavor, even if you usually do the lion’s share of financial tasks.
Using the Retirement Budget Calculator’s powerful organization and projection tools can help you bring a reluctant spouse on board with your retirement planning. By centering your initial conversations around big dreams, using the calculator to plan for those dreams, and showing your spouse how you can easily affect your future retirement income with small changes, you’ll soon be planning your ideal second act together.
