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My husband and I are both 40. We have 2 children, one in 3rd grade and one in 9th grade. When I try to talk about planning for retirement, my husband says he doesn't want to retire, that he wants to work until he dies. Having witnessed my parents' emotionally and physically miserable retirement, I too want to die on the job. However, I do not believe that "work until you die" is actually a feasible or adequate plan.

My company puts away a little into a 401k for me. I'm going to add my max contribution to the 401k from my salary starting this month. My husband's company is too small (<10 people) to provide a 401k or any other retirement planning.

Our debt consists of our house and one car which we bought just last year. We are paying more than the minimum payment on both of these debts. We carry no credit card debt, paying them off in full each month.

Given my husband's unwillingness to even consider retirement, what conservative, simple, non-threatening financial baby steps would you recommend I suggest to my husband as a way to prepare for the inevitable?

For example, we currently pay ~$500/month for after school care for our younger child. We also spend another ~$3k for her summer care. This expenditure will end in 2.5 years or so. I want to convince him to divert that money somewhere safe for the future instead of just spending it, but don't know what to suggest or where to begin.

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    Retirement isn't inevitable. Age, and age-related expenses are. Financial planning as if you were going to retire gives you more freedom in the future; try selling it that way rather than arguing about retirement as such. – keshlam Jan 6 '17 at 5:04
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    I wonder if he sees retirement as a lot of sitting around doing nothing (my grandma was like that at first). What other goals do you have? You could save up money for extended travel, working part-time on a hobby, starting your own business, etc., or even just to leave an amount for your children or charity. There's also the less happy thought that health care expenses will increase as you age. Maybe you could find something that's not "retirement", but will still motivate him to build up long-term savings. – user40002 Jan 6 '17 at 14:24
  • @whrrgarbl: Yes! I retired with less than a tenth of what the experts said I would need. I'm not only comfortable, I'm able to travel and loving it. – WGroleau Jan 8 '17 at 4:56
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I would suggest you do three things:

  • start a long term saving plan based simply on the fact that you can afford to. The money that isn't going to child care is a great candidate for that. Don't call it retirement savings, call it long term savings. It could be used for a cruise in 10 years, or a round-the-world 6 month trip in 30 years, or a wedding, or whatever. Long term savings. If you can do it, you should do it, you won't regret having that cushion in the future.
  • Talk about your careers and how you see them progressing. For example, some careers lend themselves beautifully to part time work (whether that's less than 8 hours per day or less than 50 weeks per year) and others do not. You'd both like to keep working indefinitely, but 40x52 indefinitely? Or would it be fun to "dial down" a little when you didn't need that much income some day? What do you need to do now to move yourself towards that position decades from now?
  • Don't let "saving for retirement" be the reason not to do something he wants to do now, and don't offer "we can do that when we retire" as a consolation prize. Your budget should include some long term saving and some current largish spending (furniture, vacations, cars) in a balance that ensures long term saving is never the "enemy" that is preventing all the fun.

If you do all three of these, the time will come when "2 months off to go to Italy this winter and ride bikes through wine country" is something you both want to do, can afford to do, and have arranged your lives to make it feasible. Or whatever wow-cool thing you might dream of. Buying a vacation property. Renovating an old house. The time may also come when you can take a chance on no income for 6 months to start a business that will give you more flexibility about when and where you work. Or when you can switch from working for a pay cheque to volunteering somewhere all day every day. You (as a couple) will have the freedom to make those kinds of decisions if you have that safety net of long term savings, as long as you also have a strong and happy relationship because you didn't spend 40 years arguing about money and whether or not you can afford things.

  • Career-wise, he's doing extremely well. I am underemployed. This is with good reason: as a computer programmer, many jobs are very high pressure and demand >40 hour weeks. A job like that would destabilize my bipolar disorder. I'm making about $10k-$30k/yr less than I could be (I work for a non-profit). I'm concerned that at some point, my bipolar may make me unemployable, which is one of the reasons I want to plan and save now. Your advice against the "consolation prize" of retirement is very wise; I will keep the balance that you recommend in mind as we work through this. – SnappingShrimp Jan 6 '17 at 18:07
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    So using programming as an example, quick little 3-6 weeks contracts, with gaps in between that could be a week long or a year long, let you work less than 52 weeks a year and go traveling. But you probably can't work 2 hours a day, 5 days a week, 50 weeks a year the way a music teacher could. Long term thinking for both of you about the shape of a career that lets someone travel or volunteer for weeks at a time is the best way to create a joyful retirement. 40x52 isn't the only way to work, and you can steer yourself where you want to be. – Kate Gregory Jan 6 '17 at 18:38
  • The path to savings has started with "we need a new washer/dryer because these ones are broken down." I changed jobs, make a bit more, and my check drops once a month. Right now, on the the first of the month, I say "Hey, put $x in the savings account for the w/d." He's already agreed to then take that amount, keep skimming it, and then using it to fill up our "deep savings" and then start paying down debt aggressively (just a car and the house; we have no cc debt). – SnappingShrimp Jun 19 '18 at 16:08
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    Your answer also sparked a discussion about how to have that post-full-time career. It's been a good conversation and we're looking forward to building out those second careers. – SnappingShrimp Jun 19 '18 at 16:13
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You can take a queue from any sales opportunity and position it in ways that will still appeal to someone who intends to continue working perpetually. Here are some of the points I would make:

  • 401k matching funds are free money that you will have access to in ~20 years whether you retire or not.

  • Long-term savings that grow in the stock market turn into residual income that will add to your standard of living whether you retire or not.

  • There are tax advantages to deferring income if you are in a high tax bracket now. You will have flexibility to withdraw that money in future years where you might have lower earnings. (For example, in a future year, you could take a sabbatical trip to Europe for a few months without pay and draw on your savings during that time that you are not making money.)

  • Even if you don't invest in a 401k, you and max out HSA accounts if you are eligible, and position that as money for medical expenses. If you never have medical reasons to spend that money, you can still withdraw at retirement age like a 401k or IRA. (Though it gets taxed as income if not used for qualified medical purposes at retirement time.)

With an unwilling partner, it's difficult to make a lot of progress, but if you have matching funds from your employer, do make sure that you are getting at least those for yourself. Ultimately if he doesn't want to save for himself, you should for yourself. There are no guarantees in life. If he dies or leaves, you must be prepared to take care of your own needs.

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To answer your question:

  • I would find out his the "why" behind his desire to "work until he dies." Is his concern that there won't be enough money or the money will be worth less by retirement? $1M may be worth less in 20 plus years, but it will still be considerably more than nothing.
  • As a bare minimum, I would strongly consider an index mutual fund (or index fund for short) that tracks the S&P 500, this just means the value of the fund will rise and fall with the stock market.
  • Tip: Don't sell when the market is down - that's when you lose your money.
  • Do it lovingly and kindly. Discover his fears and use information to lessen them or make them go away. You will do better if work together. If going slower means he gets on board, then go slower. I have found the more I know about something, the less I fear it.

As far as what's available in addition to your 401(k) at work (most financial types will say to contribute up to the match first), you may qualify for a Roth IRA (qualification is based on income), if not, then you may have to go with a Traditional IRA. You and your husband can each have one and contribute up to the limit each year. After that, you could get just a straight up mutual fund, and/or contribute up to limit on your 401(k).

My two cents:

This may sound counter-intuitive (and I'm sure some folks will disagree), but instead of contributing to your 401(k) now, take whatever that amount is, and use it to pay extra on the car loan. Also take the extra being paid on the mortgage and pay it on the car loan too. Once the car loan is paid off, then set aside 15% of your gross income and use that amount to start your retirement investing.

  • As an example, let's say you had $15,000 to invest (15% of $100,000 household income, because the math is easy).
  • Your income is half of that ($50k), so your 401(k) target is $2,500/year.
  • $15,000 - $2,500 (401(k))= $12,500
  • You and your husband qualify for Roth IRAs at $5k/year each
  • $12,500 - $10,000 (Roth IRAs) = $2,500
  • Put the remaining money into an Index Fund or into your 401(k) and you're done.

Any additional money beyond this can then go into the mortgage. Once it's paid off, then you can take the extra you were paying, plus the mortgage and invest that amount into mutual funds.

You may want to check out Chris Hogan's Retire Inspired book or podcast as well.

  • I appreciate the bullet point format. :) I think we are disqualified for a Roth IRA, though. We make a bit over $200k/yr but live in a high-expense urban area. Does that have any kind of impact on your recommendations? Would putting money into a traditional IRA and dropping our tax rate (if possible--I'm not sure how much we'd have to shed before we dropped our tax rate) be worthwhile? Also, I will check out your book/podcast recommendation to help broaden my understanding of what's possible. – SnappingShrimp Jan 6 '17 at 17:55
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    @SnappingShrimp You are probably above the threshold for deducting contributions to a Traditional IRA. You can still contribute to a Roth IRA though through "Backdoor Roth Contributions" where you contribute post-tax money to a traditional IRA and then roll this over into a Roth IRA. If you have no other money in a traditional IRA, then there are no tax consequences for this. If you do have money in a traditional IRA, then it is a bit more complex, but you can find ample information here and on the internet on how it works. – Eric Jan 6 '17 at 18:57
  • One point on his "plan": While one might not desire to retire unless you die of something sudden there will be a period of forced retirement that you need to prepare for. – Loren Pechtel Jan 6 '17 at 20:34
  • @Eric I had no idea there was an income cap on deducting the contribution to a traditional IRA. I appreciate the heads up. Is the "backdoor Roth contribution" a commonly-used tactic in our situation? Will it make the IRS suspicious? I don't want to do anything shady, but if it's just an ordinary loophole then...no reason not to avail ourselves of it. – SnappingShrimp Jan 6 '17 at 22:22
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    @SnappingShrimp I don't see that as being afraid of his own mortality, but rather being afraid of dying in a slow way. That doesn't mean we get a choice, though. – Loren Pechtel Jan 6 '17 at 23:41
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I can understand your nervousness being 40 and no retirement savings. Its understandable especially given your parents.

Before going further, I would really recommend the books and seminars on Love and Respect. The subject matter is Christian based, but it based upon a lot of secular research from the University of Washington and some other colleges. It sounds like to me, this is more of a relationship issue than a money issue.

For the first step I would focus on the positive. The biggest benefit you have is: Your husband is willing to work! Was he lazy, there would be a whole different set of issues. You should thank him for this.

More positives are that you don't have any credit card debt, you only have one car payment (not two), and that you are paying additional payments on each. I'd prefer that you had no car payment. But your situation is not horrible.

So how do you improve your situation?

In my opinion getting your husband on board would be the first priority. Ask him if he would like to get the car paid off as fast as possible, or, building an emergency fund? Pick one of those to focus on, and do it together.

Having an emergency fund of 3 to 6 months of expense is a necessary precursor to investing, anyway so you from the limited info in your post you are not ready to pour money into your 401K.

Have you ever asked what his vision is for his family financially? Something like: "Honey you care for us so wonderfully, what is your vision for me and our children? Where do you see us in 5, 10 and 20 years?"

I cannot stress enough how this is a relationship issue, not a math issue. While the problems manifests themselves in your balance sheet they are only a symptom. Attempting to cure the symptom will likely result in resentment for both of you. There is only one financial author that focuses on relationships and their effect on finances: Dave Ramsey. Pick up a copy of The Total Money Makeover, do something nice for him, and then ask him to read it. If he does, do something else nice for him and then ask him what he thinks.

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    I agree there's a relationship issue here. Sadly, I couldn't find a relationships Stack Exchange! ;) I will be sure to read your book recommendation. – SnappingShrimp Jan 6 '17 at 22:38
  • @SnappingShrimp despite money fights and money issues being the top two causes for divorce many treat money issue as purely mathematical. In your case, once the two of you get "on the same page", you will build wealth quickly. BTW the book is a pretty easy read. My wife finished it in an afternoon. – Pete B. Jan 9 '17 at 13:05
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I'd try to (gently) point out to your husband that what he thinks he wants to do now and what he might want to do in 20 or 30 years are not necessarily the same thing. When I was 40 I was thinking that I would work until I died. Now I'm 58 and have health problems and I'm counting down the days until I can retire. Even if your husband is absolutely certain that he will not change his mind about retiring in the next 20+ years, maybe something will happen that puts things beyond his control. Like medical problems, or simply getting too old to be able to work. Is he sure that he will be able to continue to put in 40 hour weeks when he's 80? 90? 100?

Just because you put money away for retirement doesn't mean that you are required to retire. If you put money away, and when the time comes you don't want to retire, great! Now you can collect the profits on your investments in addition to collecting your salary and live very well. Or have a nice nest egg to leave to your children. Putting money away for retirement gives you options.

Retirement doesn't necessarily mean sitting around the house doing nothing until you waste away and die of boredom. My parents were busier after they retired then when they were working. They spent a lot of time on charity work, visiting people in the hospital, working with their church, that sort of thing. Some people start businesses. As they have retirement income coming in, they don't have to worry about the business earning enough to provide a living, so they can do something they want to do because they think it's fun or contributes to society or whatever. Etc.

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Bringing your spouse on board a financial plan is key to success. The biggest part is to have a shared dream. Having retirement saving doesn't mean that you can't work. It does mean that you both will have some level of security as you age.

Does your husband really want you to be impoverished when he dies? I doubt it, he probably just hasn't given it much thought. A strong nest-egg can help you after his is gone even if you are still working.

My wife and I follow Dave Ramsey's baby steps. It has worked like a champ for us and can help you as well. You can look up his plan, most of the materials are free.

A few highlights:

  • Stop using your credit cards entirely. If you pay them off every month then you don't need them. Debt is risky, don't fool with it.
  • Stop contributing into your 401k until your are out of debt excepting the house mortgage. It sounds like your are close, pay the car off as fast as possible or sell it
  • Take all of your saving an put it towards your debts (car). Only leave 1000 as an emergency fund.
  • Stop paying extra on the house. Put the money towards the car. Get out of debt and stay out, forever
  • Save an emergency fund of 3 to 6 months after you are out of debt, excepting your house
  • Once you have done all of that, starting setting aside 15% of your income in 401k or similar retirement funds.

So in short, don't worry about retirement until you two are out of debt. Once you two are out of debt then save for your retirement, kids college and pay off your home early.

Building a shared dream with your husband is the best way to get him onboard. Talk about helping the kids, freedom to vacation, your parents struggle, whatever gets him to see the importance of having some savings.

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