When doing retirement planning, do you count your spouse's savings?

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doss
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When doing retirement planning, do you count your spouse's savings?

Post by doss »

Here's a newbie question....

When doing retirement income planning (I'm 37) , do I also add my wife's retirement savings to my calculations ? Do I plan retirement in terms of a couple or a single person ? In other words, right now I make 150k/yr but I think my wife and I can live off of 60-70% of that in retirement. Adding my wife's savings to the mix would make the financial picture better, but it's also nice to not have to include that in the overall picture (that may cause me to save less?).

Hope this makes sense. Thanks for any advice!
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PFInterest
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Re: When doing retirement planning, do you count your spouse's savings?

Post by PFInterest »

are you going to stay married to her? if not, then dont count it...
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bligh
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Re: When doing retirement planning, do you count your spouse's savings?

Post by bligh »

Depends on how you do your finances. Do you and your wife separate your finances? If so, then yes she will pay for her retirement while you pay for yours. I personally two married couples that keep their finances separate, and one couple that keeps their finances separate and has chosen not to marry due to the tax implications. None of those three couples have kids, so I think that definitely makes it simple for them.

My wife and I combine our finances completely. There is no 'wife's savings' and 'my savings'. We manage it all as 'our savings'. So yes I do count my spouse's savings. :)
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ruralavalon
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Re: When doing retirement planning, do you count your spouse's savings?

Post by ruralavalon »

doss wrote:Here's a newbie question....

When doing retirement income planning (I'm 37) , do I also add my wife's retirement savings to my calculations ? Do I plan retirement in terms of a couple or a single person ? In other words, right now I make 150k/yr but I think my wife and I can live off of 60-70% of that in retirement. Adding my wife's savings to the mix would make the financial picture better, but it's also nice to not have to include that in the overall picture (that may cause me to save less?).

Hope this makes sense. Thanks for any advice!
I suggest counting your spouse's savings, and planing in terms of a couple.

In our family there was and is our savings, not his and hers.
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runner3081
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Re: When doing retirement planning, do you count your spouse's savings?

Post by runner3081 »

I think you would have to count the spouse's savings as well, well, unless you don't like you spouse and don't see being with them for the long run. The money we have in different accounts is "our" money anyways (regardless of who has their name listed on the 401K).
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Re: When doing retirement planning, do you count your spouse's savings?

Post by tibbitts »

doss wrote:Here's a newbie question....

When doing retirement income planning (I'm 37) , do I also add my wife's retirement savings to my calculations ? Do I plan retirement in terms of a couple or a single person ? In other words, right now I make 150k/yr but I think my wife and I can live off of 60-70% of that in retirement. Adding my wife's savings to the mix would make the financial picture better, but it's also nice to not have to include that in the overall picture (that may cause me to save less?).

Hope this makes sense. Thanks for any advice!
Sorry, this question makes no sense. Why would plan on expenses for your spouse but not assets? You have to do it one way or the other.
BanquetBeer
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Re: When doing retirement planning, do you count your spouse's savings?

Post by BanquetBeer »

I don't. I know how much I want for myself to spend. If we stay married I'll have extra $$ if not I'll be fine. She has her own savings and we don't mix savings (communal family spending is equal $ contribution) so if I want to retire early I can still pay my share while she likely will enjoy working longer. This is a conservative choice for me (worst case) and because we are equally driven, this isn't a disadvantage to either of us.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by hicabob »

If you are married w/out a pre-nup her/his savings and retirement accounts(since marriage) are 50% yours and vice versa in most places so I would think yes.
Good Listener
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Re: When doing retirement planning, do you count your spouse's savings?

Post by Good Listener »

I'm sure glad I didn't after getting divorced twice. Also, if one spouse dies or becomes disabled that can muck up planning as well. I tend to assume the worse.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by J295 »

Yes..
staythecourse
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Re: When doing retirement planning, do you count your spouse's savings?

Post by staythecourse »

As long as a you have a traditional relationship, i.e. everything is thrown into a pot when it comes to money and life planning then yes. If you have a relationship of my money and her money and both have plans have doing your own thing in retirement (living apart) then you need different plans since needs will be different.

Good luck.
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HomerJ
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Re: When doing retirement planning, do you count your spouse's savings?

Post by HomerJ »

doss wrote:Hope this makes sense. Thanks for any advice!
Hmm.. well, I would think any married couple would plan around joint expenses and joint assets.

But if you are scared of divorce, save more anyway.

I certainly would never make a PLAN around getting divorced, but I guess I can understand throwing another 30% buffer in there in case of divorce.

Don't let your spouse read this thread. Sheesh.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by mega317 »

doss wrote: it's also nice to not have to include that in the overall picture (that may cause me to save less?).
I think some people plan for retirement using "alternate realities". I see some of my colleagues purposely ignoring social security when running their numbers, and then just calling it a "bonus". Or using very small projected rates of return. If I save X% I can retire at 50 with 1% real returns. I wonder if this is OP's way of doing that. I think it's good to plan for contingencies but may lead to saving more or working longer than you need.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
staythecourse
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Re: When doing retirement planning, do you count your spouse's savings?

Post by staythecourse »

HomerJ wrote:
doss wrote:Hope this makes sense. Thanks for any advice!
Hmm.. well, I would think any married couple would plan around joint expenses and joint assets.

But if you are scared of divorce, save more anyway.

I certainly would never make a PLAN around getting divorced, but I guess I can understand throwing another 30% buffer in there in case of divorce.

Don't let your spouse read this thread. Sheesh.
Actually know 2 set of couples it did make a difference. Due to customs and religion they did not get divorce and stayed married. They basically, live 2 separate lives withdrawing from the same portfolio. As you can imagine that put even more stress on their already stressful situation. So, for a minority of folks as odd as it sounds does have some merit. Totally agree for most it is not normal.

Good luck.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by Ron »

I/we do.

From the time we got married (48 years ago, this September) and had very little, financially speaking, to today when we're both retired and "financially comfortable" we've shared all finance goals and results.

It makes a difference when investing, since my wife is a bit more conservative. While our joint portfolio has an achieved target AA of 60/40 (60% equity) at age 69, her current equity holdings are at 54% and mine at 62% reflecting our individual desires for accepting risk.

- Ron
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Re: When doing retirement planning, do you count your spouse's savings?

Post by Thesaints »

Planning separately eliminates separation and premature death risk.
Planning jointly may open further optimization opportunities
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Will do good
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Re: When doing retirement planning, do you count your spouse's savings?

Post by Will do good »

Yes, the bonus is "two can live as cheaply as one." :beer
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Re: When doing retirement planning, do you count your spouse's savings?

Post by Grt2bOutdoors »

When making decisions, do you include your significant other/wife in the decision making process or do you exclude her? Of course you should include it, unless of course both have an understanding with each other that what is yours is hers, but what is hers is HERS! :twisted:
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runner3081
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Re: When doing retirement planning, do you count your spouse's savings?

Post by runner3081 »

HomerJ wrote:
doss wrote:Hope this makes sense. Thanks for any advice!
Hmm.. well, I would think any married couple would plan around joint expenses and joint assets.

But if you are scared of divorce, save more anyway.

I certainly would never make a PLAN around getting divorced, but I guess I can understand throwing another 30% buffer in there in case of divorce.

Don't let your spouse read this thread. Sheesh.
Our retirement/financial plan:

1) Stay married and retire early
2) Divorce and I will work the rest of my life due to spouse staying at home

Big incentive to stay married.
MathWizard
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Re: When doing retirement planning, do you count your spouse's savings?

Post by MathWizard »

Yes, of course.

I plan using both savings and expenses.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by H-Town »

doss wrote:Here's a newbie question....

When doing retirement income planning (I'm 37) , do I also add my wife's retirement savings to my calculations ? Do I plan retirement in terms of a couple or a single person ? In other words, right now I make 150k/yr but I think my wife and I can live off of 60-70% of that in retirement. Adding my wife's savings to the mix would make the financial picture better, but it's also nice to not have to include that in the overall picture (that may cause me to save less?).

Hope this makes sense. Thanks for any advice!
I use "plan for the best and prepare for the worse" approach. Meaning that I prepare to save enough to cover 40 times of bare minimum annual living expense for both, without counting my spouse' savings. I also guide my spouse to save for her retirement as if I were not there with her till the end. It's part of my risk management process.

It's tough to think of it that way, at least for me. But I believe that the rewards at the end will be very worthwhile. If the worst does not happen, we'll end up having four or five times the money we need to live out our retirements or we can retire 5-10 year early.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by BanquetBeer »

I think the advice here is pretty expected - if you currently share all finances together (unless you expect to get divorced) plan for retirement together. If you do not share finances or expect to get divorced - do not plan on being in retirement together.

When we got married we had equal net worths but we had different priorities on money. I like to track expenses and am very frugal. My SO like luxury expenses and is more qualitative with finances. We have a joint account for expenses - no restrictions on spend but they must provide receipts for large expenses to verify charges when I do monthly validation of bills. In the joint account probably 50% of our spend is on things I do not believe are required but because I have my separate account I can reach my saving goals with it doesn't really bother me. It's a cushy life.

However on the savings front, she earns a bit more than me so after her higher spending we still are on equal footing with savings. I am setting my retirement goals for what I will need: joint expense + misc family support/solo goals and/or if need be, cover the upgrade in cost from joint expenses to solo expenses (not much as fancy joint -> not fancy single will probably be about the same cost)
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goingup
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Re: When doing retirement planning, do you count your spouse's savings?

Post by goingup »

To me it's a question about your marriage not your finances. Because I'm so throughly ingrained in coupledom, it's hard to imagine planning for solo. If you feel differently, you should plan for that contingency.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by mhalley »

Two can live as cheaply as one is the adage, but I think I read somewhere that the actual number is 2 can live as cheaply as 1.6
I suppose what you actually have to do is save 4 times as much as you think a couple would need. Wife takes half in divorce, the other quarter spent on the trophy wife.
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nedsaid
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Re: When doing retirement planning, do you count your spouse's savings?

Post by nedsaid »

This is not a dumb question. I have seen divorce hit pretty close to home: family members, friends, acquaintances. Unfortunately, this has to be in the back of the minds of many people. What I would do is count your spouse's savings in your planning and then allow extra margin or cushion in your retirement planning.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by deskjockey »

As you can see, there are many different opinions on the topic. My personal take, if you combine your finances, do joint planning. If you keep finances separate (either completely or to some degree), plan separately. If you're thinking divorce is a possibility, plan for the worst case--look up the laws on how property is divided in a divorce in your state and use that to set up your plan.

For us, all of our finances are joint, so all planning is joint, but includes the possibility of an early death by one of us (that's where our life insurance calculations come into play).
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Re: When doing retirement planning, do you count your spouse's savings?

Post by digit8 »

My wife has a state pension and 403(b) plan that I do not count in our retirement planning- partly because I'm just too lazy to figure out how to best add it in, partly because I figure it never hurts to have a hedge compensating for the (IMHO) overly rosy projections of some retirement calculators.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by TimeRunner »

My wife has an income stream. Should I count her as a bond? :twisted:
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island
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Re: When doing retirement planning, do you count your spouse's savings?

Post by island »

We do. All our finances have been joint from day one. We were married 10 or 11 years by your age, saving, but certainly not crunching numbers for retirement projections at that age.
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doss
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Re: When doing retirement planning, do you count your spouse's savings?

Post by doss »

THanks for the replies, and sorry for my late response.

The reason I asked whether to include spouse savings in retirement planning is because it seems like most of the retirement planning calculators (e.g, Vanguard's Retirement income Calculator) out there are slanted towards yourself (they only ask for your age, your salary, etc).
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Re: When doing retirement planning, do you count your spouse's savings?

Post by Grt2bOutdoors »

doss wrote: Wed Sep 06, 2017 10:04 am THanks for the replies, and sorry for my late response.

The reason I asked whether to include spouse savings in retirement planning is because it seems like most of the retirement planning calculators (e.g, Vanguard's Retirement income Calculator) out there are slanted towards yourself (they only ask for your age, your salary, etc).
That is true, but there are others out there that do incorporate "couples" in their calculators - sites like TRowePrice.com/retirement income calculator, Fidelity.com, etc. Dig around, there are plenty of financial websites that offer more comprehensive planning tools. I agree, Vanguard's is too simplistic and only permits a maximum contribution of $60K in annual savings - when there are many different ways of being able to save more including have access to more than just a traditional 401k/403b plan, such as deferred comp plan/457, IRA's, taxable accounts, annuities, etc. The amount one can save is practically unlimited.
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DrGoogle2017
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Re: When doing retirement planning, do you count your spouse's savings?

Post by DrGoogle2017 »

Plan as a couple and not just the money aspect. I also rely on my husband's retiree health plan, otherwise it's going to cost more.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by flamesabers »

OP,

If you're going to stay married and live together in retirement, I think you should count your spouse's savings in your retirement planning. One exception to this is if you and your wife have completely separate finances and always split all of your expenses between yourselves.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by ResearchMed »

We definitely pool everything, except things that cannot be "shared" such as most tax-deferred accounts (IRA, 403b).
But we count the total sum of all of it, as one big "pot".

Most (almost all) of the retirement calculators I've used have a place for each spouse, spouse's age and sex (especially needed if annuities are involved), and inputs for each, such as SS or retirement accounts, etc.

I miss the Fidelity retirement planner, which allowed for varying amounts/percentages of annuitizing, and even had an optimization choice, where it figured what the most likely best amount to annuitize would be, assuming maximizing lifetime income. Or one could choose to annuitize nothing (e.g., serious bequest desires or such).

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Re: When doing retirement planning, do you count your spouse's savings?

Post by Nowizard »

Interesting question that possibly reflects a dynamic in the relationship. For those who pool and combine incomes and are in a stable relationship, the answer is yes. For others there may be a "no" answer, but it is difficult to comprehend why the answer would be anything other than a "Yes" unless one spouse essentially had limited or no income.

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Re: When doing retirement planning, do you count your spouse's savings?

Post by galectin »

While I agree with most of the responses that you should regard all your savings as joint assets for retirement (My wife and I have done so from the day we were married.), an important question to answer is "What does your wife think?" If she views this as "her" money, you might have a problem if you are counting on it and she decides to spend "her" money on something like a luxury car, jewelry, etc. You and she need to be in agreement as to what are your retirement funds.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by mega317 »

doss wrote: Wed Sep 06, 2017 10:04 am it seems like most of the retirement planning calculators (e.g, Vanguard's Retirement income Calculator) out there are slanted towards yourself (they only ask for your age, your salary, etc).
"Your" can be plural too. In most parts of the country you wouldn't ask for "y'alls" or "you guys's" salary.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
David Scubadiver
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Re: When doing retirement planning, do you count your spouse's savings?

Post by David Scubadiver »

doss wrote: Sat Jul 22, 2017 12:11 pm Adding my wife's savings to the mix would make the financial picture better, but it's also nice to not have to include that in the overall picture (that may cause me to save less?).
You don't "have to" do anything. If you want an accurate picture of things based on all of your assets, you get that by including all of your assets. If you want to feel as though you have less than you do, don't count all of your assets.

For me, I don't look at the value of my house, but I include the mortgage on it when I calculate my net worth. This does not give me an accurate picture of my net worth, but it does give me what I want, which is to know how much I have without selling my house.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by CJF »

Whenever I do my yearly financial review, I include all our assets. Our intention is to be together in retirement, so that is the most accurate picture of where we are on that road financially.

The only thing I insist we do is that we both commit to saving for retirement in separate accounts. We've had family go through divorce, and find out only one individual was saving for retirement and the other was paying all/most of the bills. So one of them now has to almost completely relay on Social Security in a few years. With both of us committed to saving, there will never be a position of later on in life one of us suddenly being put in a bad financial situation on that front.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by David Scubadiver »

CJF wrote: Thu Sep 07, 2017 6:15 am Whenever I do my yearly financial review, I include all our assets. Our intention is to be together in retirement, so that is the most accurate picture of where we are on that road financially.

The only thing I insist we do is that we both commit to saving for retirement in separate accounts. We've had family go through divorce, and find out only one individual was saving for retirement and the other was paying all/most of the bills. So one of them now has to almost completely relay on Social Security in a few years. With both of us committed to saving, there will never be a position of later on in life one of us suddenly being put in a bad financial situation on that front.
If you don't both save for retirement and there is a divorce, the non-saver would get a QDRO to get the fair share of the other's retirement account. In my opinion, the reason to both invest is to reduce the risk of having to split the one account in two.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by CJF »

David Scubadiver wrote: Thu Sep 07, 2017 8:05 amIf you don't both save for retirement and there is a divorce, the non-saver would get a QDRO to get the fair share of the other's retirement account. In my opinion, the reason to both invest is to reduce the risk of having to split the one account in two.
This is getting off topic. But Yes, while that law exists the reality of the situation is things don't always work like that. We have family members who did not get a "fair share" for various reasons, and they would be far better off financially in life if they had been able to save for themselves.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by David Scubadiver »

CJF wrote: Thu Sep 07, 2017 9:41 am
David Scubadiver wrote: Thu Sep 07, 2017 8:05 amIf you don't both save for retirement and there is a divorce, the non-saver would get a QDRO to get the fair share of the other's retirement account. In my opinion, the reason to both invest is to reduce the risk of having to split the one account in two.
This is getting off topic. But Yes, while that law exists the reality of the situation is things don't always work like that. We have family members who did not get a "fair share" for various reasons, and they would be far better off financially in life if they had been able to save for themselves.
Certainly it is in the low/non-earner's interest to have the earner save for them. I was speaking from the earner's point of view, that it makes sense to save for the non-earner, to reduce the risk of having the earner's account split into two.
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Re: When doing retirement planning, do you count your spouse's savings?

Post by Ice-9 »

Each year, I run our numbers into Firecalc and save screenshots of the results. I run three scenarios and save three screenshots: Me by myself living to age 100, my wife by herself living to 100, and both of us together living until the younger one of us reaches age 100.

Yes, our finances are combined, but we do make separate incomes and make separate decisions as to how much to contribute from each paycheck. I think it's helpful for both of us to see all three scenarios and review periodically.
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