Different households handle finances in different ways, but there is a pattern based on whether a member of the household has a defined contribution retirement plan.
According to Spectrem’s latest Defined Contribution Market Insights report Financial Attitudes and Concerns of Retirement Plan Participants, 62 percent of all defined contribution plan participants pool all of the finances in the household. Just over one quarter pool most of their financial assets, but each member of the household maintains individual accounts as well.
Nine percent of defined contribution plan participants actually go for individual finances, while some financial decisions and purchases pooled, while only 4 percent say they live separate financial lives form the person they live with.
As far as making financial decisions, the percentage for joint decisions is similar to the percentage of households with joint accounts. Sixty-one percent of all plan participants make all financial decisions jointly, while 29 percent say the husband of the household makes the decisions. Only 9 percent have the female spouse making the decisions,
Financial conversations can have adverse effects on relationships, which is why marriage counselors always suggest lengthy discussions about finances before marriage. But according to the Spectrem report, among defined contribution plan participants, spouses are generally agreeable.
Using a sliding scale, in which “0” indicates less agreement and “100’ means more agreement, plan participants rate their relationship with their spouse on financial issues at 76.51, a significantly high rating in that format. In general, the older the participant, the more agreement there is, reaching as high as 81.56 among investors aged 65 and higher.
There is also greater agreement among plan participants with higher balances than those with low balances. Among participants with balances upwards of $50,000, the rating is above 80, while those with balances below $50,000, the rating does not reach 73.
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