Fidelity Couples Study Finds Husbands and Wives Not Having Critical Conversations Needed to Achieve Retirement Goals

Wives Significantly Lag Husbands in Engagement, Awareness and Confidence Regarding Retirement Planning and Finances

BOSTON--(BUSINESS WIRE)--Fidelity Investments^®, the No. 1 provider of workplace retirement savings plans and Individual Retirement Accounts (IRAs)¹, today released the results of its Couples Retirement Study². The study, conducted in May 2011, is unique in that it tests agreement of both spouses in a marriage on communication and knowledge of finances and retirement planning issues.

The results show couples both approaching and living in retirement are struggling with overall communication, planning and management of their retirement finances. With less than half of couples (41%) handling investment decisions for retirement savings jointly, the data highlights key areas for improvement on many key financial and retirement planning topics. For example:

• Only 17% of couples are completely confident that either spouse is prepared to assume responsibility of their joint retirement finances, if necessary
• One-third (33%) of couples either don’t agree, or don’t know, where they plan to retire
• Nearly two-thirds (62%) of couples approaching retirement don’t agree on their expected retirement ages
• Nearly half (47%) of couples approaching retirement don’t agree on whether they will continue to work in retirement
• Three quarters (73%) of all couples disagree on whether or not they have completed a detailed retirement income plan

“Millions of American couples have worked very hard to save for retirement. However, far too many don't take the time, or have the comfort level, to jointly discuss their plans for the future,” said Kathleen A. Murphy, president of Personal Investing at Fidelity. “To ensure alignment between spouses, and the best course of action, couples should sit down long before they retire to discuss key financial topics, such as when they plan to retire, where they want to live, whether they plan to work and what lifestyle they hope to enjoy.”

Once couples agree on their vision for retirement, Fidelity recommends that those who have not yet completed a retirement plan start the process by evaluating their essential and discretionary expenses and comparing them to anticipated sources of income, including Social Security, pensions and personal savings. Doing so will help them assess whether they are on track to meet their retirement goals.

Results Show Wives Less Involved in Critical Areas

The study also found wives are often not as involved and/or are less knowledgeable about their retirement finances than husbands are – especially regarding financial confidence, engagement, awareness and approach to investing. Specifically the data show:

• Confidence: When asked if they feel confident they could assume full responsibility of their household retirement finances, if needed, only 35% of wives say they are completely confident in their ability to do so vs. 72% of husbands.
• Engagement: A small percentage of wives (8%) report they are the primary retirement financial decision-maker in their household, compared to 37% of husbands. Further, fewer wives (15%) than husbands (40%) consider themselves to be the “primary contact” with their investment professional.
• Awareness: Wives generally have a lower awareness of retirement income-related topics than husbands have. For instance, when asked how much money they expect their income sources to generate monthly in retirement, twice as many wives (32%) as husbands (15%) say they do not know.
• Investment Style: Wives tend to have a lower risk tolerance and invest less aggressively than husbands. For example, 21% of wives say they are most interested in preserving wealth and therefore willing to settle for lower returns vs. 16% of husbands. In addition, only 5% of wives describe themselves as investors, rather than a spender or saver, vs. 20% of husbands.

To help address these husband-wife differences and improve couples’ joint retirement readiness, Fidelity encourages wives to:

• Understand their financial situation and savings and investment goals
• Be an active participant in all financial planning and investment decisions – together with their spouse and investment professional
• Make sure their objectives and risk tolerance are reflected in their investment strategy
• Be prepared for potential threats that could jeopardize their financial security, such as longevity, an unexpected illness or disability, inflation and/or increasing tax liabilities
• Learn as much as they can about investing and maintain an appropriate asset allocation for their age and life stage
• Know where critical documents are kept and what they would need to do if their spouse is no longer able to assist with financial decision-making.

“It’s essential that both husbands and wives have a voice in setting and achieving financial goals and that each is comfortable asking questions and providing input on key decisions,” Murphy said. “This is particularly important for wives because they tend to outlive their husbands and likely will need to manage their finances on their own, or work with an investment professional, later in life.”

Relationship with an Investment Professional

For the first time in 2011, Fidelity also explored the relationships between couples and their investment professional, including how they work together with the professional, who is involved in planning sessions and what they discuss. The results show that more than half (58%) of couples work with an investment professional, but only one-third (35%) agree they work jointly with that professional.

The study also explored whether couples are involving their adult children in planning discussions about critical topics such as healthcare proxies, long-term care, life insurance and wills. More than half (55%) report they have had at least some of these discussions with their adult children, yet only 1% of those who have done so agree their investment professional was involved. Of those who have not had discussions with their children, one-third (32%) say they either ”have not gotten around to it,” or “there is plenty of time left” to do so.

“More than a third of the time, Fidelity’s investment professionals find that couples have different views of what retirement means to them, or they are putting off these discussions because they are not comfortable with the topic,” said Murphy. “To help alleviate this, Fidelity makes it our policy to encourage couples to participate together in retirement and investment planning sessions. Doing so can help ensure their plans are aligned with their goals and realistic for both spouses, so they can take action together and make the most of their retirement savings.”

Planning Resources for Couples

To help couples of all ages start and/or continue these critical retirement planning conversations on their own, Fidelity offers a wide range of resources at no cost to both Fidelity customers and non-customers, including:

• New educational Fidelity Viewpoint articles discussing topics such as: 10 retirement questions couples should consider when planning for retirement (www.fidelity.com/couplesviewpoint) and how women can increase their financial success in retirement by taking an early and active role
• A new online interactive quiz (www.fidelity.com/couplesquiz) for couples to take and compare answers, with a new detailed checklist of steps to help guide couples through the retirement planning process together
• Online retirement guidance and planning tools that allow couples to test different savings and investing strategies and learn how they will be affected by different market conditions
• Daily seminars on a variety of retirement topics to help couples better understand key issues they may face in retirement and how best to prepare for them

Couples can also visit one of Fidelity’s 158 Investor Centers or call 1-800-FIDELITY for a joint consultation with a Fidelity investment professional.

About the Study

The 2011 Fidelity Investments Couples Retirement Study analyzed retirement expectations and preparedness among 648 married couples (1,296 individuals). Respondents were required to be at least 46 years old, married and living with their respective spouses and have a minimum household income of $75,000 or at least $100,000 in investable assets. In 2011, 196 retiree couples also were represented in the study, which previously included only couples who had not yet entered retirement. Retired couples are defined as both spouses being retired from their primary occupation, even if they continue to work in retirement. Fidelity Investments was not identified as the sponsor. Richard Day Research, Inc., an independent research firm, executed the study, which was fielded in May 2011.

About Fidelity Investments

Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.7 trillion, including managed assets of more than $1.6 trillion, as of May 31, 2011. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.

Fidelity Investments and Fidelity are registered service marks of FMR LLC.

Neither Richard Day Research nor Knowledge Networks, Inc. is affiliated with Fidelity Investments.

The experience of the couples who responded to the 2011 Fidelity Investments Couples Retirement Study may not be representative of the experiences of all investors.

Although consultations are one on one, guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917

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© 2011 FMR LLC. All rights reserved.

¹ Cerulli Associates Quantitative Update Retirement Markets 2010 and Cerulli Edge Retirement Edition, First Quarter 2011.

² 2011 Fidelity Investments Couples Retirement Study. The survey was fielded in May 2011 through Knowledge Networks Inc.’s nationally representative panel and conducted by Richard Day Research. Additional waves of the study were conducted in 2007 and 2009.