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My partner is 11.5 years older than myself. She has saved virtually nothing toward her retirement. I am 33 years old, while she is 45.

My question is as to whether couples should act separtely according to age while investing or not. Meaning, should her asset allocation be according to her age, while mine is according to my age, even though I will be continuing to work while she is retired? Or should she take more risk because she does have a partner who will be working after she has retired?

In addition, we are planning to buy a house in the next year and I am wondering if our approach should be based on both of our current salaries, even though she will be retired within 20 years of the purchase. I suppose since we will refinance over time this may not be too much of a concern?

Any thoughts are appreciated.

-MTBer
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It is my general feeling that couples should be treated as a single entity.

So the total risk that you would take if investing on your own should be somewhat reduced because of your partner age and current lack of retirement funds. Your partner's assumed risk would be more than what it would be without having a partner who is younger and going to work for longer.

BEN
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I would run through different scenarios.. what if you both live to old age, what if one of you lives and the other dies, etc. Then you will see that the relative differential of your ages with respect to dying really means you should have term life insurance until your investments get to a high enough level that you could retire. (the term insurance making up for the loss in future savings)

But really, expenses should go down considerably with only one of you alive.. I would come up with budgets for all eventualities, rough ones, and then plan an investment strategy which works for any eventuality. Come to think of it, I should do this myself for my family, good idea.

However, women tend to live to be about 10 years older than men, so your probable death is probably very close to hers. Don't get so wrapped up in your youth that you neglect to notice that in fact she in all probabability may still have a longer life than you ;)

I would buy a house you can afford to pay off in 20 years (which is surprisingly close to one you can afford with a 30 year mortgage), and get a 20 year mortgage. I actually have a 10 year mortgage. Am I bragging? Yes I am bragging I have a smaller house and like it.

I am not sure I totally agree that she gets off the hook of working because she reaches a certain age. Do I get off the hook from working when I reach a certain age? Please tell me I do. Instead, I would look at it as.. you both want to retire in 20 years, how can we achieve this together?

Frankly, your age gap isn't all that huge and almost could be ignored in your planning. My grandfather is happily married to a woman 24 years is junior, and they are both going strong. Historically I think even larger age gaps were the norm.

Good luck,




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It's great you're thinking about these issues, and I completely agree with yttire- your wife will probably live to be older than you anyway, so your relative lifespans are closer than they appear. I'd allocate based on your age, which would be mostly stocks.

Nick
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My partner is 11.5 years older than myself. She has saved virtually nothing toward her retirement.

Rather than try to figure out who should take more risk with investments you should first address the issue above. If she has not saved anything then determining investment risk is way down the road after creating a budget, identifying areas for savings, etc.

Not to sound harsh but I've already been down that road. Then I gave her half the money and we said goodbye.

FuwlEd
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Hi, Fools! Thanks for your thoughts. However, I need to throw a bit of a wrench in the mix.

We are both women. :-)

Therefore, the idea of our life spans equaling out based on gender alone is out of the question.

So, can we start over?


<<If she has not saved anything then determining investment risk is way down the road after creating a budget, identifying areas for savings, etc..... Not to sound harsh but I've already been down that road>>

Nope. It doesn't sound harsh at all. I appreciate you saying this. It is so very true. I thought it may have been harsh too, when I told her how important this issue was to me when choosing a life partner (I mean, come on, retirement is just WAY too important). So, things have changed. She sees the usefulness of it, and has begun saving in her retirement plan, sets a certain amount of money aside per pay for our house savings, etc. But, yes, I agree with you.

Looking forward to everyone's thoughts.

-MTBer
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