Navigating Retirement When One Spouse Handles the Finances
In many relationships, responsibilities are rarely split 50/50. Whether it’s household chores, home maintenance, cooking, or managing finances, one spouse often takes on a larger share of certain tasks.
This is especially true when it comes to personal finances. In most cases, one spouse is more engaged in day-to-day money management or long-term financial planning. Sometimes, this is due to a simple lack of interest, a deferral to the more financially inclined spouse, or even an intimidation factor—especially when working with financial advisors.
Unfortunately, some advisors contribute to this issue by overcomplicating financial matters or focusing their attention on only one spouse. This dynamic can leave the less-involved spouse disengaged and unprepared for financial decision-making, which becomes especially problematic if they one day find themselves solely responsible.
The Reality of Financial Preparedness in Marriage
Consider this: If something happened to the spouse who primarily manages the finances, would the surviving spouse be prepared to take over? This is a question you need to consider when one spouse handles the finances.
If you have a trusted advisor who has built a relationship with both spouses, that’s great.
Having professional guidance can provide peace of mind. However, this isn’t always the case. Studies have shown that nearly 80% of women will become the sole financial decision-maker at some point, and of those, 80% switch advisors within the first year of their spouse’s passing. This suggests that many advisors fail to build strong relationships with both partners.
A Real-World Example: John & Sue
Recently, I had the privilege of working with a couple—let’s call them John and Sue. John was diagnosed with terminal cancer, and in one of our last meetings, he looked me in the eyes and said, “You take care of her now.”
That conversation still gives me chills.
John had always been the main financial decision-maker, while Sue, though engaged, didn’t have the same level of interest. Since his passing, we’ve worked closely to simplify her financial situation, settle the estate, and create an income and tax plan that aligns with her new reality. This ongoing process highlights the importance of ensuring both spouses are prepared for the financial transition that may come.
The Importance of Feeling Heard
If you’re working with an advisor, ask yourself and your spouse:
Do both of us feel heard in financial meetings?
Would my spouse be comfortable managing our finances alone?
If something happened to me, would my spouse want to continue working with our current advisor?
For those who manage their own investments, these questions are even more crucial. DIY investors often assume full control of financial decisions, leaving their spouse in the dark. This can create significant challenges if the non-financial spouse suddenly has to take over.
Understanding the Value of Financial Guidance
A good financial advisor should provide much more than just stock recommendations. True value comes in various forms, such as:
Investment optimization
Ongoing communication
Tax efficiency
Peace of mind knowing your family is financially secure
If you’re paying for financial advice, ensure you’re receiving value beyond investment management.
Action Steps
Have a Financial Check-in with Your Spouse
Treat this as part of your estate planning.
Ensure both spouses understand their financial situation.
Discuss whether both of you feel comfortable with your current financial advisor.
Questions to Ask Each Other
Do you feel confident managing our finances if needed?
Would you be comfortable working with our advisor alone?
For Those Without a Spouse
Introduce your executor to your financial professionals.
A simple meeting can help set expectations and ease the transition when the time comes.
Ensuring both spouses are financially informed and comfortable with their advisor is crucial. If you haven’t already, take the time to have these important conversations.
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All comments are of a general nature and should not be relied upon as individual advice. The views and opinions expressed in this commentary may not necessarily reflect those of Harbourfront Wealth Management. While every attempt is made to ensure accuracy, facts and figures are not guaranteed, the content is not intended to be a substitute for professional investing or tax advice. Please seek advice from your accountant regarding anything raised in the content of the podcast regarding your Individual tax situation. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.