AFTER 42 YEARS OF MARRIAGE, Jerry and Gussie Isler have become experts in the art of good-natured banter. Take the way they talk about their different financial philosophies.
To Jerry's way of thinking, Gussie is "a prolific spender and needs me to rein her in." According to Gussie, Jerry is "an obsessive-compulsive saver" who starts setting aside money for their next vacation the minute they return from one. And the investing styles of the Farmington Hills, Mich., couple? He's the one who can handle a little risk, venturing into growth-oriented equity mutual funds, while she's uncomfortable with anything more aggressive than a CD.
The Islers, in other words, are a fairly typical couple, in that each views financial matters quite differently from the other: Spenders often marry savers, and risk-takers are attracted to risk-avoiders. Conventional wisdom may peg men as conservative spenders and aggressive investors—and women as the opposite—but, in many cases, the stereotypes don't match reality. Still, couples with diverse money styles tend to be the rule, not the exception.
Talk Through Your Differences
Different approaches to money matters can, however, complicate financial lives—especially when it comes to retirement. Maintaining an open dialogue is important. "Couples procrastinate about discussing specific retirement goals because they think they'll have plenty of time to talk about them later," says Karen Burns, head of the Goals Based Consulting Group for Merrill Lynch. "They may avoid the topic if they don't feel they're on track with their savings." Or they may avoid financial topics in general because they fear the disagreements that inevitably arise.
But spouses who never articulate their financial goals, for retirement or otherwise, may later regret that lack of communication, says Debra Greenberg, a director in the Personal Retirement Solutions Group at Bank of America Merrill Lynch. Someone outside the relationship, like a good friend, a family member or a financial advisor, can pose questions that help a couple address the topics they've been avoiding. "Asking you about your family's health history so that you can project future medical expenses, for example, can lead naturally to conversations about the sorts of activities each of you would like to pursue in retirement. Once you agree on the kind of life you want to lead in retirement, you can begin to create a blueprint for a shared life after work," says Greenberg.
Find Common Ground
Use this "Retirement Checklist: 5 Questions Every Couple Should Ask—and Answer" to start a conversation about your finances and your future with your partner.Read More
Sharon Oberlander, the Islers' longtime Merrill Lynch Financial Advisor, encouraged the couple to open the lines of communication about retirement early on. During their working years, Gussie managed an apartment complex for her family, and Jerry owned a distributorship that supplied stainless steel and aluminum to the Detroit auto industry. In discussions about the couple's financial future, Oberlander helped establish common ground by showing them how, despite their differing money styles, they had many shared values, including a commitment to saving for their two sons' education and for their own retirement. "I like doing things in a big way, but I would never have jeopardized my family's future by overspending," Gussie says.
Looking ahead to retirement, the Islers and Oberlander explored a number of scenarios based on different retirement dates and what they planned to do with their lives afterward. Oberlander showed them how the various permutations might affect their cash flow and retirement lifestyle. Eventually they settled on a strategy that called for Jerry to retire from his business at age 55, then for both of them to run Gussie's rental properties for 10 years before retiring together.
But life, as it has a habit of doing, threw the Islers a curve. Jerry developed a neuromuscular disease that causes severe leg pain if he stands for more than 10 minutes. He closed his company on schedule, but after helping at the apartment complex for six years, he found the work too physically demanding. So Gussie and her business partner, who had taken over ownership of the apartments from her family, sold the complex in 2008. The timing of the sale, just before the Michigan real estate market slumped, solidified the Islers' retirement finances and helped them weather the economic crisis.
Once they were both retired, their lives took another surprising turn. They decided to support the research of a young doctor at the University of Michigan who had helped Jerry manage the symptoms of his disease. An initial gift turned into a devoted cause—the Jerry Isler Neuromuscular Fund at the university's medical school—which became a new goal to be factored into their retirement budget. Just as Oberlander had helped Gussie and Jerry develop their original life strategy, now she worked with them to consider how their charitable giving might affect their financial situation in retirement.
When Gussie and Jerry seemed to pull in opposite directions, Oberlander would remind them of their shared goals. And she would note that, despite their different approaches, they had both contributed to an overall financial situation that made it possible for them to reach those objectives.
In the end, the Islers' careful strategy and decades of saving provided them with a retirement portfolio that appears well suited to this new phase of their lives. Jerry still jokes about Gussie's expensive tastes, but they both believe that the plan Oberlander helped them develop will continue to accommodate their divergent approaches to spending, saving and investing, while also supporting their philanthropic interests.
"We're on the same page now," Gussie says, "and we feel very fortunate."
Connect with an advisor and start a conversation about your goals.
Give us a call at
9am - 9pm Eastern, Monday - Friday
Case studies are intended to illustrate brokerage and banking products and services available at Merrill Lynch and Bank of America. You should not consider these as an endorsement of Merrill Lynch as an investment advisor or as a testimonial about a client’s experiences with us as an investment advisor. Case studies do not necessarily represent the experiences of other clients, nor do they indicate future performance. Investment results may vary. The investment strategies discussed are not appropriate for every investor and should be considered given a person’s investment objectives, financial situation and particular needs. Clients should review with their Merrill Lynch Financial Advisor the terms, conditions and risks involved with specific products and services.
Diversification and asset allocation do not ensure a profit or protect against loss in declining markets.
Any information presented about tax considerations affecting client financial transactions or arrangements is not intended as tax advice and should not be relied upon for the purpose of avoiding any tax penalties. Neither Merrill Lynch nor its financial advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.
Bank of America Merrill Lynch is a brand name used by several Bank of America Corporation businesses, including, but not limited to, Retirement and Philanthropic Services. Bank of America Corporation is a financial holding company that, through its subsidiaries and affiliated companies, provides banking and nonbanking financial services.