Saving for retirement: Why you and your partner need to talk about your plans ASAP

Every couple fights, but when it comes to arguments about money, the conversation can get especially awkward. Americans have a very personal relationship with finances: Nearly a fifth of U.S. adults have never disclosed their salary to anyone at all.

Unfortunately, avoiding money discussions out of fear could be getting in the way of some important talks about the future, according to Capital One’s latest Financial Freedom survey. The bank, which surveyed more than 1,000 U.S. adults 18 and older, found that only 64% of couples have discussed financial priorities like retiring — which means 36% of couples have yet to do so.

More alarmingly, people are even less likely to talk about their retirement plans now than in previous years, according to survey results. In 2014, 71% of people said they’d discussed retirement with their partners — compared to 64% today.

Experts aren’t saying you should put retirement ahead of more urgent financial priorities, like paying off high-interest debt, providing for your family or finding a place to live. And since 20% of U.S. adults — the highest percentage since 1950 — live in “multi-generational” households, it might be hard to think about saving for a future that’s 40 years away when you’re still living with mom and dad.

But even if you’re sure every penny in the family budget is accounted for, there’s still a case for bringing up your long-term financial plans. The sooner you can break the ice around money topics, the less likely you are to be forced into the conversation by an unplanned career change or some other financial emergency.

Why you and your partner should talk finances

There are a few reasons why two heads are better than one when it comes to money. Your partner may have some money skills — whether patience with the family budget or a dogged desire for hunting down deals — which you lack. Being more vocal with your partner about your goals may also provide a degree of accountability you were missing when you tried to go alone.

But the strongest argument for why couples — younger couples in particular — should talk about retirement? They’ll have to rely on savings far more than their parents or even their grandparents, according to a recent brief from the Center for Retirement Research at Boston College. Factors such as the decline of fixed-income pensions have made retirement savers more susceptible to income shortfalls.

How to have the retirement talk with your main squeeze

To start, take stock of your resources. Maybe your partner has a more generous retirement plan, making the case for you to focus on becoming debt-free or to start saving toward a down payment. It’s also a good idea to run both incomes through a retirement calculator to get a realistic assessment of how much retirement income you can expect to have with your current savings rate.

If you’re not on track for your age — for example, a common rule of thumb is to save the equivalent of your annual salary by age 30 — then how will you come up with the rest? Most likely it will involve a mix of strategies, whether that’s saving more now, working longer or cutting expenses by relocating to a new town or city where your money will stretch farther.

How to save more for retirement

This part is especially tough, since we aren’t naturally inclined to save for retirement. For one, the brain is hardwired to prioritize short-term goals ahead of long-term objectives, a phenomenon called temporal discounting. Plus, the process can be intimidating, especially when you consider the inevitable market crashes and dizzying array of investment options.

But intimidation shouldn’t delay retirement, since starting a plan while you’re young can be incredibly beneficial in the long run. Thanks to compounding interest, a person who starts saving at age 25 only needs to save about $50,000 over 10 years to wind up with more than $600,000 by the time they’re 65, assuming they’re earning about 7% annually on average. A person who starts saving at age 35, though, can save three times that — $150,000 — and still wind up with less.

So, if you and your partner consider yourselves on the track to forever, it’s worth spending a little time to discuss saving for your future and strategizing how to better prepare, whether that’s by upping your 401(k) contributions or finally opening up that Roth IRA.

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