Aging Couples Can Find Common Ground on Finances

As you’ve gotten older, do you and your partner have different financial needs? Use these smart strategies to get in sync.

One Couple, Different Needs

Maybe you’re still working while your significant other enjoys retirement. Perhaps you want to travel the world, but your spouse doesn’t want to spend the money. Or maybe one of you needs expensive long-term care.
 
Life changes (and differing viewpoints) are a given, so it’s important to work as a team to navigate through them. If you and your better half are in different places, read on for some guidance on tackling thorny money issues so you can keep your financial life – and your partnership – on track.

Start Talking

According to a survey conducted by Bread Financial, 64 percent of couples report being financially incompatible. That can get further complicated if, as you age, you have diverging financial wants or needs.
 
You’ve heard it before, but communication is key. Fidelity’s 2024 Couples and Money study confirms that effective discussions help couples with both their finances and overall wellbeing. In fact, 27 percent of surveyed Baby Boomers – people in their sixties and seventies – said that building a financial plan is their “love language.”
 
So start by having an honest money conversation. It’s best to enter the discussion with curiosity. Set aside any assumptions about your partner’s money mindset and listen with compassion. Share your goals and any concerns, and ask your partner to do the same. If you have a disagreement and things get heated, take a breather and continue the discussion when you’re both feeling more calm.

Agree on a Budget

Gather the details of your financial life. List sources of income, regular expenses and indulgences to get a clear picture of where you stand.
 
Then create a budget together. To prevent either partner from feeling too hemmed in, consider allotting each person a discretionary fund for no-questions-asked spending. That way, if your partner wants to splurge on a vintage record player or a new golf club guilt-free, they can simply use their “fun money.”
 
A discretionary fund can also come in handy when one partner overspends in a particular category. If you agreed to a budget for family birthday presents, for example, and your partner goes overboard, the overage can come out of his or her discretionary spending.

Squabbling About Money? You’re Not Alone.

More than one in four couples say that money is their chief relationship challenge, according to Fidelity’s 2024 Couples and Money study. But working as a team to plan can help.

Reassess for Retirement

When one partner – or both – retires, your household income may dip. If so, you might need to make some spending adjustments. (Some couples actually practice living on less before they retire.)
 
Try to come to an agreement with your partner about your retirement budget and, if necessary, curtail spending. If you reach an impasse, bring in an objective third party to help. A financial planner can offer expert guidance. You might also consider seeing a financial therapist, who can help you manage your finances in accordance with your goals and shared values. You can find a financial therapist through the Financial Therapy Association.

Plan for Long-term Care

As we age, it becomes increasingly likely that we’ll need long-term care, which can be pricey. Costs vary widely by location, but the mean cost of an assisted living facility is around $5,000 a month, while the mean cost of nursing homes is roughly $8,500 to $9,500 a month, according to a Cost of Care survey by Genworth Financial.
 
If one of you needs long-term care, you’ll want to make sure that the cost doesn’t undermine your partner’s financial stability. So it’s important to know how you’ll pay for it. Private health insurance and Medicare don’t cover long-term care, but long-term care insurance does.
 
It’s best to buy long-term care insurance when you’re younger, because it’s less expensive and you must be in good health to buy a policy. But older people who are in good health can qualify, so shop around to get the best price. Many insurers offer a discount to couples when both get a policy.
 
Many older adults who don’t have long-term care insurance rely on Medicaid to cover the costs of long-term care. In the past, people whose annual household income was too high couldn’t qualify for Medicaid, so couples made the difficult decision to give up some of their income and assets to qualify. But now, thanks to spousal impoverishment protection policies, people can get the long-term care they need without their spouse having to relinquish income.
 
A financial advisor can help you put a plan in place for long-term care should you or your partner need it.

Revise as Needed

Once you’ve ironed out the details of your shared plan, do something fun (within your new budget) to celebrate! But keep in mind that this isn’t a one-and-done task. Moving forward, schedule a day each month to revisit your plan and make any needed changes.
 

 

 
Sources:
 
Bread Financial, “Making cents of love & money: 64% of coupled consumers admit to financial incompatibility with their partners,” published February 21, 2023
 
Fidelity, “Love & Money: Most Couples Give Themselves High Marks in Communication, Yet Fidelity Study Reveals Hidden Frustrations in Couples’ Financial Future,” published February 1, 2024
 
AARP, “5 Steps to Successful Budgeting as a Couple,” published March 22, 2022
 
Genworth, “Cost of Care Trends and Insights,” accessed November 21, 2024
 
National Council on Aging, “How Much Does Long-term Care Insurance Cost and Is It Worth It?” accessed November 21, 2024
 

 
This article was created in accordance with the Patelco editorial policy.