Could Your Spouse Manage Your Retirement Plan Without You?
By Undrea Smith, RICP®
East Valley Wealth & Retirement
Over the years, I have met with many couples where one spouse handles nearly all the finances.
They know where the accounts are, how income is generated, which insurance policies are in place, and who to call when there is a question. The other spouse may have very little interest in any of it. And I don't necessarily think there is anything wrong with that. We all have different roles in a marriage. Your spouse doesn't need to become a financial expert just because you are the one who handles the money.
But every couple should be able to answer one important question: If something happened to the spouse who handles the finances, would the other spouse know who to call?
Your Spouse Doesn't Need to Know Everything
Both spouses should understand the overall retirement plan, but that doesn't mean both need to manage it. Your spouse doesn't need to know every investment you own, follow the markets, or understand exactly which account should provide next month's income. In fact, if we've done our job correctly, they shouldn't have to. What matters is that they understand the big picture and, even more importantly, have a relationship with the people who already know the answers. When both spouses know their advisory team, the surviving spouse isn't left with a stack of statements and instructions to figure out alone. They have a phone number to call.
That's When the Relationship Matters Most:
Losing a spouse is not the time someone should be trying to understand Social Security survivor benefits, pension elections, investment accounts, taxes, or how next month's bills will get paid. That's a time to be with family, remember the person you loved, and begin healing. The financial plan should already be prepared to support you. There will eventually be decisions to make, but the surviving spouse should be able to make one phone call and ask: “What do I need to do?” And someone on the other end should already know the family, understand the financial picture, and be prepared to guide them through what comes next. To me, that's financial peace of mind.
Plan for the Surviving Spouse Today:
Retirement income can change significantly when one spouse passes away. One Social Security benefit will generally end. Pension income may change. Taxes can eventually look different. Yet property taxes, utilities, insurance, healthcare, and home maintenance don't suddenly cost half as much. That's why retirement planning shouldn't only ask, “Do we have enough income today?” It should also ask, “What happens to either one of us if the other isn't here?” Those conversations should happen while both spouses are sitting at the table.
Both Spouses Should Know the Advisory Team:
This is why I encourage both spouses to participate in the larger planning conversations, even when only one handles the day-to-day finances. I'm not trying to turn someone who hates finances into someone who suddenly loves spreadsheets. I want them to be comfortable with us. I want them to know our team, know how to reach us, and know that if something happens, they won't have to start searching for answers on their own. The same applies if a spouse becomes ill or unable to manage the finances. Proper powers of attorney, healthcare directives, and estate documents, prepared with qualified professionals, can help ensure the right people are able to step in. The objective is simple: don't make the other spouse become the financial manager overnight. Build a plan and a team that can step in when needed.
What Peace of Mind Really Means:
At East Valley Wealth & Retirement, we call our approach the Peace of Mind Process for a reason. Peace of mind isn't knowing the ticker symbol of every investment you own or checking your accounts every morning. It's knowing there is a plan. It's knowing your income, investments, taxes, healthcare, and legacy have been thought through together. And it's knowing that if life changes suddenly, you have people you know and trust who already understand your family and can help you through it.
So instead of asking whether your spouse could manage your retirement plan without you, perhaps the better question is: If I couldn't manage our finances tomorrow, would my spouse know who to call? Because someday, the greatest value of your financial plan may have very little to do with investment performance. It may simply be knowing that the person you love can pick up the phone and have someone they trust say, “We're here. We'll help you through this."
That's peace of mind.