How Cupid's Arrow May Save Your Retirement

Over $23 trillion sits in various types of retirement accounts across America, according to the Employee Benefit Research Institute. Even that figure may be low.

Since 2011 – when that figure was calculated -- markets have risen to record levels and retirement savers have contributed even more to their plans, adding thousands of dollars to the average person’s retirement plan balance. No doubt, trillions more sit in bank accounts, brokerage accounts, mutual funds and other types of “non-qualified” investment accounts. 

But if you thought your most important retirement asset was some sort of financial account, you would be wrong.  According to research done by the Center for Retirement Research at Boston College, staying married may be the key to financial security in retirement.

Their research found that those families that had experienced divorce one or more times or had never married at all were also the most likely to be ill-prepared for retirement. While that may not surprise you, when you consider that more than half of baby boomer marriages end in divorce, you begin to realize that the biggest threat to your financial security in retirement may not be a volatile stock market or who sits in the Oval Office.

Gray divorce. Divorce rates among people over age 60 are on the rise for many reasons. Known as “gray divorce” many couples call it quits even after decades of marriage. While no one should stay in an abusive or dangerous relationship, many marriages end simply because the love is gone. Today people live longer, healthier lives. A 60-year old in an unfulfilling relationship may simply decide that spending the last 25 years of her life in an unhappy marriage isn’t worth it.

Divorcing has obvious financial consequences for both spouses: assets are split in half, two households need to be maintained, social security, pension and other benefits are reduced – to name just a few.

Anyone who has experienced divorce knows that splitting from your spouse isn’t cheap. According to some estimates, attorney and other divorce-related legal fees can be as high as $30,000 or more. If you have significant assets, kids are involved or the divorce is contested, fees can be even higher. Rather than shell out $30k to slice your net worth in half, a better option may be to make an investment in your most important relationship.

The National Federation of Retailers reports that the average couple spent nearly $150 on Valentine’s Day last year; however, the amount of money spent drops sharply the longer you’ve been with your partner. Almost half of all married couples don’t celebrate Valentine’s Day at all.

I wonder. Of those couples over age 60 who divorce, what percentage of them made a habit of celebrating Valentine’s Day every year? Probably not many, I am guessing.

While Valentine’s Day may be just another overly commercialized holiday designed to get you to spend more money, making an investment in your marriage is time and money well spent.

Buy some flowers, splurge on a night out or if your relationship is really in need of a lift, spring for a pair of plane tickets to a warm weather destination. Your marriage, your personal happiness, and your retirement account balance will benefit.

Besides, I hear the Bahamas are nice this time of year.