How couples are sabotaging their retirement

Coupling up has a lot of perks, but when it comes to retirement saving, many twosomes don't take advantage. 

Coupling up has a lot of perks, financial and otherwise. Married people have more wealth, a nightly couch companion and automatic rescue — via an agreed-upon I’m-just-scratching-my-eyebrow signal — from the token close-talker at a party.

Yet, many twosomes don’t take advantage of the benefits. Research on the number of couples who aren’t using a “save me” signal is thin, but Harris Poll recently surveyed more than 1,800 Americans in a relationship — defined as married or living with a partner — for NerdWallet, and a third of respondents said neither they nor their partner is saving for retirement.

In fact, Americans in a relationship may be making mistakes that could seriously undermine their financial advantage, according to the survey. Here are three of the most worrisome missteps:

1. When couples save, it’s often in the wrong accounts

Here’s the general order when it comes to where you should save for retirement: Contribute to your 401(k) or other employer-sponsored plan, at least to the point where you earn all possible matching contributions. Then turn to a traditional or Roth IRA. If you max that out, you can add more money to the 401(k).

Unfortunately, many Americans in a relationship who are saving for retirement have somehow worked into that hierarchy a savings account, which showed up in the NerdWallet survey as the second most common home for retirement savings.

Thanks to low interest rates, growing your money in a savings account is nearly impossible. Money for retirement should be invested in a mix of low-cost stock and bond funds via a tax-advantaged retirement account. You can do that even without earned income: If you file taxes jointly, you can open a spousal IRA based on the income of the working spouse.

2. Couples are letting one partner shoulder the responsibility

It’s not unusual to have an income gap in a relationship; the pay gap actually widens with marriage and expands more when children come into play.

According to salary comparison site Payscale, married women without children make 21% less than married men without children. That gap widens to 31% when you compare married women with children to their male counterparts.

So it’s not surprising that in the NerdWallet survey, only 24% of Americans in a relationship said both they and their partner are saving for retirement, or that men in a relationship were more likely to report saving for retirement than women in a relationship (65% versus 46%).

Saving for retirement is a solo game until you’re married. After that, it should be a shared effort. That’s not because the nonsaver could be left with nothing in a divorce — how retirement assets are split depends on your state, but they do get split — but because that person could be giving up tax advantages and employer-matching dollars.

Even if one spouse earns less, the couple should be planning retirement account choices together. If only one of you has access to an employer match, use your shared retirement savings to contribute enough to catch that match, which is free money and a guaranteed return on your investment. If you both have an employer match, you should each contribute enough to take advantage of it.

3. Couples aren’t putting a dollar sign on their dreams

It isn’t hard to talk about the fun parts of retirement, like how and where you’re going to spend it. I’m not saying these chats aren’t important — my husband should know that I’m out if he ever buys an RV — but how you’re going to pay for those dreams should also be part of the conversation.

The trouble is that, according to the NerdWallet report, almost a third of Americans in a relationship who are saving for retirement haven’t discussed how much they need to save. This isn’t a fun part, but it also isn’t hard: An effective retirement calculator can shoulder some of the work.

How much you save makes all the difference in retirement. It means you can live in a beach house instead of a sandcastle. It’s what gives you a choice about how you’ll spend retirement. Without savings, you could spend it working, and that’s if you’re lucky. Nearly half of retirees left work earlier than planned, most commonly due to health issues, according to a recent survey by the Employee Benefit Research Institute.

When you plan for your future, you can hope for the best while being prepared for the worst.

METHODOLOGY

This survey was conducted online within the United States by Harris Poll on behalf of NerdWallet from Aug. 10-12, 2016, among 3,068 U.S. adults ages 18 and older, of whom 1,832 were married or living with a partner. This online survey is not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, contact Jessica Ayala atjessica@nerdwallet.com.

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Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com . Twitter: @arioshea.

This article was written by NerdWallet and was originally published by Forbes.