A Message for Husbands: Your Wife Should Drive the Retirement Planning

One of the most common things I hear from many couples is that the husband likes investing and planning, and thus wives are all too happy to let him handle the retirement strategizing.

Big mistake.

Not because I am doubting the skill and intentions of men. Rather, my concern is that it’s women who typically are the most at risk in terms of retirement security for a very simple fact: Women tend to outlive men.

Quick quiz:

Guess what percentage of women between the ages of 75-84 are widowed?:

Now guess what percentage of men between the ages of 75-84 are widowed?:

The answer to both is C. More than half of women will be widowed at that life stage, compared to less than 20% of men. That’s why women need to be drivers of the retirement planning: Because they are the ones who typically will be the surviving spouse. I think it makes plenty of sense for the person with the most at stake to be in charge here.

I want to be clear: both of you should be involved in the planning. But you and I know that it’s often natural for every relationship to have a divide-and-conquer approach where you each drive different tasks. I highly recommend that women be the ones driving the retirement planning. That just tilts the odds a bit toward acing the most important retirement planning step: making decisions that will ensure the financial security of the surviving spouse. That can entail delaying when the high earner begins to receive his or her Social Security benefit (waiting to age 70 entitles you to the largest payout), which in turn will leave the surviving spouse with the highest possible benefit.  And if the husband has a traditional pension, you will want to carefully consider how to take that annuity payout. Quite often the smartest move for the benefit of the wife (the surviving spouse typically) is to take a reduced benefit that will continue to make payments even if the husband does indeed die first.