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What do you know about your joint finances?

July 15, 2015

Mrs. POP posted a link to a study by fidileity that found that “more than four in 10 (43%) failed to correctly identify how much their partner makes—and of that, 10% got it wrong by $25,000 or more. There were other important disconnects between couples including: 36% of couples disagreed on the amount of the household’s investible assets.  When asked how much they will need to save to maintain their current lifestyle in retirement, nearly half (48%) have “no idea”—and 47% are in disagreement about the amount needed.”

Personally, I’m surprised that so many couples (64%) agreed on the amount of investible assets.  Were they allowed to check their accounts before answering?  I always thought T & I communicate well about money.  However, we are not counting down to retirement, so these numbers aren’t what we communicate about most often.  We could answer how much we are saving this year for retirement/investments, but knowing how much we need to have saved in ~20 years is more nebulous.

For fun, I gave us Fidelity’s survey to see how we would do.

How much will SP make this year (gross)?
T:  $X
S:  $X
Yay!  We both know this because I recently negotiated it, its a round number, and bonuses aren’t part of my compensation anymore (predictable!).

How much will T make this year (gross)?
S:  Y minus $3k?
T:  “I don’t know, $Y?”
Correct answer:  Somewhere around Y is correct, but I can’t tell you without doing more calculations than I feel like doing right now.  We’re within $5k.  He gets these small raises at odd points in the year that I find mysterious, but they are surely predictable.

How much do we have in investible assets?  This should include retirement, investment accounts and cash, but definitely not home equity.
My answer:  About X.
His answer:  About X + $100k
Correct Answer:  About X + $40k.    I was surprised I was off by so much, but I tend to look at net worth rather than investible assets.

How much we will need to save to maintain our current lifestyle in retirement?
My answer:  “This is a dumb question, because there are way too many assumptions that go into this.”
His answer:  “Yeah”
Correct answer:  I’m right that it isn’t a good question when framed so vaguely.  Still,  we get to define our own parameters and assumptions, and we should have a rough answer.  Unfortunately, I don’t.  The calculation I tried in December assumed a few things incorrectly, and I want to live in our home for a year before trying to estimate this.   I know we are saving enough and neither of us has a goal to retire early (at least not extremely early).  I will revisit this calculation at the end of the year based on this year’s spending.

T is also right, because he agreed with me.  🙂

What do you estimate your Social Security payout in retirement will be?
My answer:  “Whatever the max payout is at the time, unless they make it need-based, but it is not factored into our retirement plans for now.”
His answer:  “No idea, probably not a lot.”
Correct answer:  I think we are both right.

3 Comments leave one →
  1. July 15, 2015 2:11 pm

    Interesting exercise. I don’t have joint finances yet, but I’d like to try to have a similar conversation with my boyfriend to make sure we’re on the same page about everything.

  2. July 20, 2015 4:05 pm

    My husband and I are definitely on the same page when it comes to finances and goals and review our finances quarterly, however, there would be some questions here that I think we would struggle to answer correctly. Some are a bit tricky!

  3. August 8, 2015 7:16 pm

    I sort of want to take the quiz but have a feeling that I’d want to cheat to make sure we are on the same page 😀 Well now I feel like we have to take it because I have to prove that I can be honest. Drat.

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