If Retirement Planning Is a Game Show, Most Couples Are Failing

Mark Miller - Retire Smart

Remember "The Newlywed Game"?

Host Bob Eubanks would isolate just-married men and women and ask a series of questions to determine how well the couples knew one another -- and embarrassed everyone in the process.

The show started back in the '60s but has never really gone away; there have been numerous remakes over the years and it's even kicking around right now as a racy reality TV series called "Here Come the Newlyweds."

Meanwhile, Fidelity Investments just did a re-make of its own that might be called, "The Retirement Game."

Fidelity's version is a survey designed to determine if married men and women are on the same page when it comes to personal finance and retirement planning. And it really is reminiscent of the Eubanks method in that Fidelity went out and separately interviewed the two sides of actual couples -- the survey isn't just a random sample of married people.

The results of Fidelity's Couples Retirement Survey should be embarrassing for anyone age 45 to 72 who is married (the range of ages studied). It seems husbands and wives are doing a remarkably poor job of communicating, managing and planning for retirement.

For example:

- Only 45 percent of couples make decisions jointly regarding the day-to-day financial decisions of the household, such as budgeting and bill payment.

- Even fewer couples jointly discuss investment decisions for retirement savings (38 percent).

- On critical retirement decisions, 60 percent of couples don't even agree on when they plan to retire; 44 percent are not in agreement on whether they will work in retirement, and 42 percent have different ideas regarding their expected lifestyle in retirement.

- Only 15 percent express confidence in one another's ability to manage their joint retirement finances.

- Fifty-nine percent of couples agree they own an IRA, while 26 percent don't agree.

"If this study reflects how married couples are behaving, we all need to renew our financial vows as soon as possible," said Kathleen A. Murphy, president, Personal Investing, Fidelity Investments.

There's more: 39 percent of couples couldn't agree on whether they own an annuity, or if they did, how much income it would pay in retirement. That's actually not surprising, considering that use of annuities isn't nearly as widespread as other types of financial products, and product offerings are still fairly complicated.

But life insurance? You'd think couples would at least be able to agree about how much insurance they carry and whether their coverage is adequate.

The general rule of thumb is to have total coverage of five to 10 times annual income. While 80 percent of couples surveyed told Fidelity that at least one of them had life insurance, 95 percent didn't know about the rule of thumb; when they learned what it was, about half said they were under-covered.

The Fidelity data is in line with many other surveys reflecting a generally casual attitude and lack of focus on retirement planning. But it's a little surprising that Fidelity's report doesn't show any increased effort to communicate and shore up finances following the economic crash last fall. Several research reports have pointed toward this recently.

For example, the 19th annual survey about retirement conducted by the Employee Benefit Research Institute (EBRI) suggests people are getting more serious about retirement planning in a very pronounced way. More people said they expect to work longer to secure their retirement, cut back on expenses and change their patterns of investing.

Lest I sound too much like a scold, an admission:

Had my wife and I been included in the study, our numbers would be sub-par. I'm making a note to myself to improve our own information sharing and communication on retirement planning; we need to be ready, just in case Bob Eubanks calls.