Planning retirement finances is not only about how much money a couple has when they give up work.
In most cases, a fateful date when both partners leave work for good just does not happen.
Many couples have a two or three year age difference which means the state pension for one is delayed.
Even personal and workplace pensions have different pay out dates.
But the hidden traps can trip up even the most careful financial plans.
For instance, a friend’s pension provider had the power to claw back almost £100,000 of contributions if they died before the retirement date set in the pension.
When approached, they promised they would put the fund into trust should they die before drawing down the fund.
Had the clause remained in the pension contract and the friend died before drawing down on the fund, losing that missing £100,000 could have had a devastating impact on the couple’s retirement planning.
According to recent research by financial firm Prudential, fewer than a third of over 40s have talked about securing a retirement income for the surviving partner if they should die.
The same research found only one in five couples had ever discussed retirement finances and that one in 10 women were entirely reliant on their partner’s income in retirement and had no provision of their own.
Many couples have no idea how much money they will receive in retirement (62%) and 18% do not know how much their partner has saved in a pension.
Poor financial planning also leads 28% of over 40s to worry they will run out of cash in retirement, while 16% are concerned about paying tax, 11% fear they will fall prey to fraudsters and 11% are flummoxed by too much financial choice in retirement.
Kirsty Anderson, a retirement income expert at Prudential, said: “Life is busy and it is tempting to avoid difficult conversations, but couples really do need to talk about their finances and retirement planning. A conversation about what might happen to a couple’s finances if the worst should happen to one partner can be difficult but it could make the difference between the survivor being left with nothing or having a comfortable retirement.
“Couples who don’t talk about their retirement finances may end up making plans separately and missing out on making the most of the pension saving tax relief available between them. They may also have unrealistic expectations of what their combined retirement savings are worth.”