Dear Quentin,
I'm 64 and my wife is 61. We've been married 28 years, with two grown kids, three grandkids and a paid-off house outside Columbus, Ohio. I'm an engineering director making $190,000, and between my 401(k), an IRA and a brokerage account, I have about $2.2 million. I figured we'd both be done working in three years or so.
In August, I was digging through a filing cabinet for refinance paperwork we ended up not needing, and I found her latest 401(k) statement from the school-district office where she works: less than $80,000. I sat in the garage with it for 20 minutes.
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I knew she had less than I did. She worked part time when the kids were small, then took a job with shorter hours so she could handle pickups and, later, look after her mother, who spent her last two years in our spare room. I never expected matching balances. I just never expected this.
I ran the investments our whole marriage. She ran the household money: groceries, utilities, soccer fees. I never asked what was in her account. When I brought up retiring last spring, she said she was ready whenever I was, and I took that to mean we were in good shape.
When I told her how shocked I was, she went quiet, then got upset. She said she'd spent nearly 30 years holding this family together and never thought of us as two competing retirement accounts. She reminded me that we agreed she would be home more, and that nobody ever talked about what it would cost her later. She thought we'd worked it out. Apparently I did too, without ever saying so.
Hers, mine and ours
Her view is that it's all our money. Mine is that I put in the hours, skipped trips I wanted to take and turned down a chance to go part time at 58 because I wanted us secure. I don't want her to be insecure for a second. But part of me wants those years to count for something, and I know how that sounds. She says I'm running our marriage like a partnership where everyone submits receipts. Maybe I am. I still can't pretend the two numbers don't exist.
She's right that I wouldn't be where I am without her. I was on the road constantly in my 40s. She was the one at urgent care at 2 a.m. I can't put a dollar figure on that.
She wants to stop working in a year or two. She wants to travel, volunteer at the library and be around the grandkids while we're both healthy. I'd rather work until 67, maybe 70, for a bigger cushion. I worry about health insurance before Medicare, inflation and long-term care.
My father needed long-term care for six years. She says those are things to plan for, not reasons to keep postponing, and that she doesn't want to spend her 60s waiting for me to feel comfortable with a number that might never be big enough. We'd also like to help the grandkids with college and maybe leave them something.
We met with a financial adviser last month. He said to look at our combined finances and spending before deciding anything. That seems reasonable, but I left feeling no better. I love my wife and don't want money to damage 28 years.
So am I wrong to feel this way? Should savings built during a long marriage be treated as shared no matter whose name is on the account? And how do we make a fair plan when one of us has so much more, partly because of choices we made together?
A 64-Year-Old Husband
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Dear Husband,
I need to issue a correction. Your wife has a lot more put aside for retirement.
Your wife does not just have $80,000 saved for retirement; legally, morally and ethically, she actually has $2.2 million plus $80,000 saved for retirement. The same is true for you. That's the good news. Congratulations to you both! Given that you're in your early 60s, you're in good shape, as long as you manage your expenses for the next 30 years or so.
High expectations lead to disappointment, but I'm wondering: What exactly did you expect? You never expected her to have as much as you do in your 401(k). She worked part time while taking care of the kids and, by the sounds of it, she didn't have a 401(k) match for all the years she worked and/or she did not work enough hours in a well-paid job to accumulate six figures.
If your wife did take care of the household expenses, while you oversaw the investments, they clearly only included the investments contributed from your career, not your wife's teaching career (assuming she was a teacher, given that you refer to the school district where she worked). You both had a responsibility to lay all these figures on the table.
Your wife's reaction to your "discovery" speaks volumes about your collective relationship to money. Her reaction suggests that, yes, she was aware that she didn't have a lot, and she felt under the microscope by you presenting her 401(k) account to her in this way. The frankly unfair implication is that she should have more and, perhaps, has some explaining to do.
Her tears, perhaps, also reveal feelings of guilt that she did not contribute enough financially and — I'm speculating here — shame about not having more saved in her 60s or having failed to discuss her own financial situation with you, given that you lived together for three decades and raised two children. Those tears and any feelings of shame, if they exist, are misplaced.
Guilt and shame
For the record, I don't believe she has reason to feel either guilt or shame. Whatever complicated emotions underlie those tears are likely what led to this disconnect, in terms of your expectations and knowledge of her 401(k) balance, in the first place. No doubt she feels judged and objectified by what must have felt like a confrontation.
As I told this reader , who wrote in asking whether he had a legal duty to share his retirement fund 50/50 with his wife, women often contribute a lot to a marriage and relationship in physical and financial terms that are not always recognized — from pregnancy and childbirth, to school runs and cooking and childminding. Plus, they give up their place in the workforce to do so.
Your wife contributed her time to building your $2.2 million retirement fund, as well as contributing to her own when she could, and probably did not expect her contribution and status in your marriage to be reduced to an $80,000 401(k). Yes, you should have talked openly about your expenses, sacrifices and investments. But no, your wife had nothing to hide.
To take the 4% withdrawal rate — a very loose rule of thumb designed for your retirement fund to last 30 years or more — you would have $88,000 a year in income, or more than $7,300 a month, before tax. That's a good start, particularly if you no longer have a mortgage to pay (although you do have property insurance and property tax, in addition to all your other household bills).
Add to that your Social Security, and you are off to a good start. Let's say you get $4,000 a month in Social Security; your wife can claim up to 50% of that if her own benefits fall below that threshold, depending on when she decides to claim. In theory, therefore, you could end up collecting $4,000 a month, with your wife collecting $2,000.
Spousal benefits exist for several reasons. Primarily, they exist so that a husband or wife with little or no earnings of their own is not left with no income in retirement. They also recognize the many economic contributions of the lower-earning spouse and are designed to treat a marriage not as two separate entities building two independent nests, but as a lifelong partnership.
Long-term care
Long-term care is a real concern, but your wife is not to blame for that. You could choose to take out long-term-care (LTC) insurance, which does get more expensive in your early 60s, or you could self-fund using your savings and/or equity in your home, if/when that time comes. Alternatively, you may get by with in-home care.
Medicare, as you no doubt are aware, does not cover long-term care. The cost of LTC insurance effectively doubles between your 60s and 70s, so you still have time to go down this route, if that's what you choose. This is the perfect opportunity for you to course-correct by having these discussions together, rather than operating in separate silos.
Most people in their 60s can expect to pay a premium of $300 or more a month, compared with $500-plus for someone in their 70s, according to estimates from SmartAsset. It's more expensive for women due to their longer life expectancy. Once you hit your 70s, the premiums escalate because you are closer to potentially needing such care.
Turn your question ("Should savings built during a long marriage be treated as shared no matter whose name is on the account?") into a statement, and deliver it with commitment and compassion, with a side order of humble pie: "My darling wife, our savings built during a long marriage should be treated as shared no matter whose name is on the account."
You ask if you are wrong to feel this way. You should feel how you feel. You have a right to your feelings. It's not my job to police your feelings, but it is my job — since you asked — to point out that feelings can evolve with understanding and not a small amount of self-reflection. Your wife does not deserve a "gotcha" moment, two children and three grandchildren later.
She does, as she tried to explain, deserve your thanks.
