Couples hit with $14,000 average retirement shortfall from uncoordinated planning

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Many married and cohabiting couples are missing a simple chance to boost retirement savings: directing contributions to the spouse with the better workplace match. New research published in the American Economic Review (2025) finds that when partners don’t coordinate, they can leave meaningful money on the table today and over a lifetime.

The study, by Taha Choukhmane of MIT Sloan, Lucas Goodman of the U.S. Treasury Department and Cormac O’Dea of Yale, estimates that one in five couples could raise their household retirement contributions by about $750 annually simply by shifting money to the account offering the higher match. Over decades, the researchers say, this lack of coordination translates into an average shortfall of roughly $14,000 in retirement wealth — and for the most affected 10% of couples, the gap can reach about $40,000.

Why this matters now

As employers tweak benefits and match formulas, timing matters. Small differences in match rates compound over years, and failing to favor the higher match is a low-effort, high-return mistake many households make without realizing it. That makes the issue relevant not just to retirement planners, but to anyone managing a dual-income household in 2025.

What the research measured

The authors set out to see whether couples act as a financial unit or as separate decision-makers. In the “separate” scenario, partners behave much like roommates: they save and prioritize independently, even when coordination would raise household wealth. When they coordinate, couples combine information and channel contributions to the most efficient account.

Choukhmane and his co-authors emphasize this is not purely theoretical. Small administrative choices — which spouse’s 401(k) receives contributions, how aggressively each partner contributes, or who claims employer matching — can add up to large differences in lifetime savings.

Who tends to coordinate better

Couples who coordinate effectively generally share more financial history and trust. The study finds that longer marriages and couples who opened joint bank accounts before tying the knot are more likely to treat finances as shared decisions.

Conversely, newer partnerships or those that maintain fully separate finances are more at risk of leaving employer matches unclaimed or misallocated. “Failing to coordinate can be a deliberate choice, but it often carries a real cost,” Choukhmane said in an interview describing the findings.

Practical household examples show how simple coordination matters: one partner might be carrying credit card balances with interest rates in the high teens or twenties, while the other keeps spare cash in a checking account earning little to nothing. Redirecting liquidity to pay down high-interest debt can produce immediate savings that exceed modest investment returns.

How couples can close the gap

Financial advisors and workplace benefits specialists recommend regular check-ins to spot missed opportunities. Kate Winget, chief revenue officer at Morgan Stanley at Work, says couples who set recurring “money dates” are far less likely to overlook timing windows for enrollment, contribution increases or other employer programs.

Compare employer match rates: Identify which workplace plan offers the highest effective match before allocating contributions.

Prioritize the higher match: Contribute first to the plan that returns the largest immediate employer contribution, then top up the other spouse’s plan if needed.

Coordinate around life events: Job changes, a new child or a salary increase are moments to revisit contribution strategy.

Address high-cost debt: Use idle household cash to pay down credit cards with high interest rather than leaving it in low-yield checking accounts.

Schedule regular money dates: Quarterly or semiannual meetings help couples track benefits deadlines and adjust contributions.

Winget adds that even short, focused conversations can uncover simple fixes: timing an increased contribution to capture an employer match, enrolling in an employee stock purchase plan when advantageous, or coordinating emergency savings to avoid costly borrowing later.

Small administrative moves — switching which account receives contributions, consolidating information, or agreeing on a household priority for savings — rarely require complex financial advice but can materially change outcomes. For many couples, the first step is simply opening the conversation.