Financial Questions Couples Should Ask

As my mom, grandmother, and I barbecued on a community grill in Florida earlier this year, we chatted with a woman struggling to keep her flame lit as she cooked hamburgers. "My husband always did this for me," she said, adding that last year, at the age of 60, she became a widow.

Before we parted, after she had successfully mastered the grill, she offered me some advice. "Women today should learn to do everything themselves," she said. "Don't wait until you have to."

New research on women in retirement underscores just what sound advice that is. A study from the Hartford Financial Services Group and the MIT AgeLab found that couples who divide up financial tasks, where one spouse handles day-to-day bill paying and the other investment management, fare better than those who hand over the financial reins to one person while the other takes a back seat. The couples with the so-called divide-and-conquer approach were more likely to have more savings and to develop a financial plan for the surviving spouse. Yet only 11 percent of respondents practiced this kind of shared division of labor.

Half the income. In couples where one spouse (usually the husband) took charge of all financial matters, the other spouse (usually the wife) often faced financial struggles later in life. The problem with that approach, practiced by one third of the couples, is that when husbands die, women often find themselves with less money than expected, and they don't know how to manage it, says Maureen Mohyde, the Hartford's director of corporate gerontology. On average, Mohyde says, women experience a 50 percent decrease in income upon becoming widowed and only a 20 percent decrease in expenses. "That's a negative surprise that should not happen to women," Mohyde adds.

Although women 65 and over are three times as likely as men to survive their spouses, many men face the same challenge. David Porinchak of Ambler, Pa., recently became a widower after his wife died at 73 from stroke complications. Porinchak says his wife was the computer expert in their marriage, and he depended on her completely for any tasks requiring the Internet, which many financial chores do. "I should have taken the initiative and asked her for help to learn basic computer skills," he says. Now, he's taking classes to catch up but says it's a struggle to learn on his own.

That's why it's important for women—and men—to stay involved in managing their finances. Mohyde says every couple should be able to answer these three questions, well before retirement:

• If my spouse were to die, how would that affect the household's income?
• What would an expensive illness do to our retirement savings?
• If either spouse were to die, would the survivor be prepared to take over management of the finances?

Each spouse should also know how much the couple spends each month, the location of savings and investments, and how to access the funds. Mohyde also suggests involving a trustworthy financial adviser, especially if one spouse is not comfortable with investment decisions.

As spouses have long known and behavioral economists confirm, a chief benefit of marriage is that it lets individuals focus on what they are good at—whether it's earning money, running a household, or a mix of the two—and benefit from their partners' skills as well. But too much specialization can one day leave a widow or widower in the dark when it comes to essential financial skills and knowledge. A system that involves both partners, as our barbecuing buddy suggested, keeps either from having to teach him- or herself under stress later.