Couples and Retirement: Sharing Expenses - UNI Blog
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Nearing retirement and in a new relationship? Here's how to (fairly) share expenses

Posted on Thursday February 28, 2019

Nearing retirement and in a new relationship? Here's how to (fairly) share expenses

A new relationship when you're a little older can be an unexpected source of happiness. From regular companionship to occasional fun, the enjoyment of one another's company rather than the fulfilment of obligations, and greater personal freedom, many types of relationships become possible once our children are (finally!) out on their own and we have the chance to get to know someone else better. However, these new couples also face certain challenges, including how to share expenses fairly. The following are some ideas for arriving at a financial arrangement that works for you.

What, you're still paying your daughter's rent? Combining your pasts without laying the ground for future conflicts

Young couples starting up a family build a life together, whereas couples who find each other later in life need to find ways to combine their backgrounds and aspirations.

Everyone has his or her own way of managing credit and savings, financial aid extended to children (and sometimes even grandchildren) and household expenses as well as retirement plans developed before meeting the other person. A number of factors can arise to complicate the sharing of expenses, and to overcome this challenge, it's important to look at it as a joint project and an opportunity to build something new together.

So, how much do you make? Talking about money without discomfort or taboos

In a recent interview with Radio-Canada, Hélène Belleau, professor at the Institut national de la recherche scientifique (INRS) and co-author of the book L'amour et l'argent : Guide de survie en 60 questions, confirmed that talking about money is stressful for many Canadian couples. That said, the first step toward sharing expenses fairly is to set aside any taboos about money! Without open dialogue, financial issues can easily become a source of frustration for one or both partners. No subject should be left unaddressed, including: 

  • income disparity
  • (over)spending habits
  • sharing of recurring expenses
  • debts and investments
  • retirement plans
  • shared dreams and options for financing them

Through open, honest conversation, you can identify the expense-sharing model that's best for your situation. Above all, don't forget to talk about your retirement plans especially if the time for them is right around the corner as they will have significant impact on the model you choose and how it evolves over the coming years.

You pay for the groceries, I'll pay for our winter vacation. Every situation is different

Every couple's situation is unique, making it impossible to prescribe a single model. The goal is to find a solution that fits the realities of both partners. According to a Statistics Canada study, there is a correlation between the income management strategies adopted by couples and the nature of their relationship (including common-law), the length of their relationship and whether or not they have children. Multiple approaches are possible when it comes to sharing expenses. Here are the most common.

50/50: Each person pays an equal share of the common household expenses. This popular method is made even simpler by opening a joint bank account. However, it may not be the right approach if you are not living together or if your retirement plans don't match, as is occasionally the case in relationships later in life.

Proportional: Each partner contributes toward the expenses based on his or her financial situation as a proportion of pay or pension income. This model helps to avoid leaving one half of the couple feeling at a disadvantage. Regardless, it's important to talk about gaps in income and differences in spending habits before going with this model. Our financial situation simulator may be helpful in determining where each of you stands financially.

Sharing by type of expense: Joint expenses are divvied up by type. For example, one half of the couple may look after paying for groceries, while the other pays for restaurant meals. To keep any disparities to a minimum, however, it's wise to go in together on all major expenditures, such as those related to sharing the home or vehicle.

These models make a good starting point for discussion, keeping in mind that most couples end up adapting aspects of each model to their situation and the type of expense, even on a case-by-case basis. Open communication and honesty are the best tools in deciding on the model that works best for you. As always, don't hesitate to make an appointment with us if you have any questions!

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