Question: My husband is a spendthrift and I worry he'll quickly go through our $1.3 million nest egg. We are 62, but how can I ever retire?
Answer: You’ll be able to retire, but first, you’ll need to address two issues: How to make sure your nest egg will last through retirement and how to get your husband to manage his spending.
The first can help you with the second.
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It’s not unusual for couples to disagree about managing money. A 2024 Fidelity Investments survey of couples and their finances found that more than 1-in-4 of them said money is their greatest relationship challenge. A similar number admitted they are often frustrated by their partner’s money habits, but let it go to keep the peace.
Overlooking a spouse’s spendthrift habits can work while you’re both employed and have paychecks to cover expenses. But retirement changes that.
“Often, it’s the first time that the couple visualizes that there is only money going out and no money coming in,” says Ashley Agnew, a certified financial therapist and director of financial wellness at Centerpoint Advisors in Needham, MA. Women are likely to worry more about running out of money in retirement because they tend to live longer than men, she says.
Do this first if you're married to a spendthrift
If you’re worried about your husband’s spending, a smart first step is to get a good financial plan, Agnew says. And the earlier you do so, the better.
“So often couples who are in this situation will put off the financial planning process until there is no runway left,” Agnew says. That leaves them with little or no room to adjust their finances to secure their retirement, she says.
A financial plan will put numbers to the vision you both have for retirement and show how to budget and invest so you don’t run out of money. A plan could convince your husband that he needs to rein in his spending. Or it may reveal your husband’s money management isn't as harmful to your retirement security as you fear.
Create a sustainable retirement budget
Of course, $1.3 million is a sizable nest egg. But if spending goes unchecked, you can quickly drain even a million-dollar nest egg.
“Very quickly,” says Eric Walters, a certified financial planner with Summit Hill Wealth Management in Greenwood Village, CO.
For example, the 4% rule is a popular guideline for determining how much retirees can safely withdraw from their portfolios over a 30-year retirement. Under this rule, retirees withdraw 4% from their savings the first year of retirement and thereafter adjust the dollar amount of their annual withdrawals by the previous year’s inflation. So, if they retired in 2025 with a $1 million portfolio, they could withdraw $40,000 the first year. If inflation runs 3% in 2025, they would increase the withdrawal to $41,200 in 2026.
But, say, a newly retired couple with a $1 million nest egg plans to take two luxury vacations a year that cost $15,000 to $20,000 each, Walters says. They would be spending as much as 4% of their nest egg that first year on vacations alone.
A financial adviser can customize projections for you and come up with a sustainable withdrawal rate from savings. Seeing hard numbers can be a wake-up call for spenders.
When Walters deals with big spenders, he runs projections to show how their overspending could lead them to run out of money. “I then ask the spendthrift partner if that is what they would like to happen. Of course, they say ‘no,’ ” Walters says. “Then I explain the importance of creating a budget and sticking to it. For some, this is enough.”
Find a win-win for both
Still, your husband might chafe at a budget that he feels will reduce his enjoyment in retirement. To maintain marital harmony, consider ways that both of you can come away with a win.
For example, Pete Bosse, a certified financial planner in Boerne, TX, says he worked with a couple in their fifties who wanted to retire in their early sixties. The husband worried that his wife’s shopping habit would seriously damage their finances, and he was also concerned about having a stable monthly income in retirement.
Bosse ran the numbers, demonstrating the impact on the couple’s resources if the wife spent $300, $500 or $1,000 a month on shopping trips.
“They looked at the impact of those three numbers and said, ‘Wow, I didn’t realize that could take this many years off our funds,’” Bosse recalls. “It was really an ‘aha’ moment and opened up a dialogue” about how each could achieve a win.
The solution: The wife was allotted $500 a month to spend as she liked. And the couple purchased an annuity that would provide about 20% of their retirement income to supplement Social Security. “He wanted to feel secure and have that check coming in every month,” Bosse says.
Often, setting a limit on how much a spendthrift is free to spend each month can make both sides happy. You can add money to a prepaid card and once that’s gone, more money won’t be added until the next month, Bosse says.
Or you can look for inexpensive ways to spend in retirement on things that each of you wants. Walters, for example, asks each spouse to list the top three things they are most excited about enjoying in retirement. Travel, golf, pickleball and visiting grandkids often make the list.
They then find ways to do those things, but less expensively, Walters says. For instance, instead of a beach vacation in Fuji, they may try the white sands of Clearwater, Florida. Or they could play golf at a municipal course rather than a country club.
Communicate, communicate, communicate
Your husband may not even be aware that you worry about running out of money in retirement, so it’s important to start the conversation.
Money is an emotional topic, though, and can quickly escalate into an argument. Agnew, the financial therapist, suggests raising your own money concerns as a way to get the discussion going.
“Just saying, ‘Hey, I’m having a lot of feelings about retirement. I’m doing a lot of self-reflecting, but I want you to know that I’m a little scared,’ ” Agnew says. “That is way more impactful for starting a financial discussion than ‘You spend too much money and we’re going to be broke by the time we’re 80.’ ”
A planner or financial therapist can facilitate these conversations. When doing this on your own, Agnew recommends setting aside time quarterly to discuss your finances, including upcoming expenses.
You both should agree on the meeting rules, she says. For example, you might set a time limit of, say, 45 minutes. You could hold the meeting at home or choose elsewhere. You may decide to focus on only three things or take a broader review of finances. And consider rewarding yourselves for holding a money meeting, say, by going out to dinner the next night, she says.
Avoid name calling, such as “spendthrift” or “cheapskate,” which can quickly blow up a meeting, Agnew warns. Also avoid using words like “never” or “always,” as in “You always do this” or ‘You never listen to me,” she says. And don’t raise unrelated issues.
Though money meetings might be a bit difficult at first, Agnew says, they do get easier over time.
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