E*TRADE Study Reveals Varying Ways Couples Approach Saving and Investing
While most couples discuss or make investing decisions as a team, willingness to give discretion to one's partner varies significantly by generation
- Most share or discuss investing in one form or another. For married couples, over half (55 percent) either share investing responsibility equally (17 percent) or have a discussion with their partner before making a decision (38 percent).
- Yet Millennials are significantly more likely to be comfortable giving discretion to their partner. Whether due to the longer time horizon to recover from investing decisions gone wrong, or perhaps simply from trust and confidence in their partner, three out of four millennial investors (75 percent) are comfortable with their partner making an investment decision without their input. This population is also the most likely (53 percent) to be making decisions on their own, without discussing with their partner.
- And Baby Boomers are far more likely to feel the opposite. Conversely, older generations are actually more likely to be uncomfortable giving investing discretion to their partner (58 percent). Given Boomers' proximity to retirement, perhaps this generation feels too much is at stake not to be involved and aware. Further, this generation is also the most likely of all the age groups to actually be making decisions as a team.
"I think we can all agree that trust and communication are essential elements of any successful relationship, and especially so when making financial decisions," commented
- Review your assets holistically. It's good to know what investing accounts your partner has, how aggressive his/her portfolio is, and when your partner envisions retiring. This helps a couple align investment strategies and come up with a cohesive plan.
- Diversify across paths. Look to optimize contributions across your 401(k) and IRA accounts. If one partner has a dollar-for-dollar employer match and another has a 5 percent match, it may be better to direct contributions to the account that has the bigger payoff.
- Find the right level of risk. Finding the right level of risk doesn't need to be a tug-of-war. Consider each prospective retirement date and be open to using each other's different perspectives to create the appropriate level of risk within the investing portfolios.
- Fortify your financial house. There are a number of steps you can take to ensure you are prepared should the unforeseen occur. For instance, make sure all beneficiary forms are completed and up to date, and don't forget emergency savings. Three to six months of expenses is a good start and will allow for some flexibility if you are faced with an unexpected emergency.
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About the Survey
This wave of the survey was conducted from
|Please select which of the following best describes how your family's primary investment portfolio is overseen within the family.|
|I am solely responsible||45%||53%||49%||34%|
|I am mostly responsible, but I discuss the decisions with my partner||36%||35%||33%||44%|
|It is an equal responsibility between my partner and me||17%||12%||17%||20%|
|My partner is mostly responsible, but we discuss the decisions||2%||0%||1%||2%|
|My partner is solely responsible||0%||0%||0%||0%|
|How comfortable are you with your partner making an investing decision without your input?|
|Top 2 Box||55%||75%||58%||42%|
|Bottom 2 Box||45%||25%||42%||58%|
"Millennial" defined as age 25-34 // "Gen X" defined as age 35-54 //
"Baby Boomer" defined as age 55+
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The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.
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