Marriage and Money
Marriage has had its trouble in recent years with about half of them ending in divorce. Still, it survives and offers financial advantages over remaining single. For the 70 percent of people who will be married at some point in their lives, financial advisors say there many ways to benefit from the power of two. Here is a list of some financial advice for married couples.
Talk openly about money even before you marry
As soon you are seriously dating, or engaged, you should start talking about your goals and financial assets with each other.
Define shared goals
In building a life together, you should be talking about– buying a home, having children, their college education and how you will protect each other’s health care and retirement. Financial planning might not be romantic, but there is peace of mind in sharing the same goals. You’re in it together!
Stay in harmony with your shared financial plan
A financial plan is just the starting point. Life happens and you need to make adjustments. A financial plan can serve as a reminder of what your big goals are and how to reach them. Financial planners can also act as intermediaries on tough financial questions.
Sharing is caring and there are efficiencies. By combining savings, couples can qualify for lower fees on bank transactions and retirement accounts. Aggregated assets and accounts will generally qualify for lower fees in just about all instances.
Communicate about what you need
Women need to be more confident so they can engage in discussions about investing for retirement. While most women say having financial expertise matters, less than half are confident that they have any and or want to build their knowledge. Couples need to plan together, and women are too inclined to stay on the sidelines. Get engaged! Dealing with financial matters after the death of a spouse can be overwhelming if you haven’t been engaged during the marriage.
Combine, Share and Diversify assets for maximum growth and safety
When you combine your resources, you have more for down payments, better access to credit and you can invest more in growth opportunities that you may not otherwise have in a smaller account. A compounding effect. For homeowners, joint ownership can also add a layer of protection from creditors.
Take advantage of tax benefits
Married filing jointly on your tax returns might make you pay a bit more in income tax going from single to married, but there is a savings in taxes overall and a greater benefit in wealth transfer for estate tax planning purposes.
Respect each other’s money skills
Couples rarely have the same financial expertise. The spouse with skills can lead but both need to be involved with decisions or it can lead to problems. Find tasks for both and involve both on a regular basis.
Support each other through ups and downs
No one said it would easy and sometimes “LIFE” gets in the way. Stay focused and united and support each other. Don’t start the blame game…no one wins at that!
Use flexibility in retirement Social Security and employer benefits
Social Security pays spousal benefits even for those who don’t work. Know your benefits. Check your SS statement or go online to get it. As you get closer to retirement you may want to stagger your retirement with that of your spouse. Rarely do couples retire the same day. More often than not, there are benefits to structuring the timing of these events. Healthcare, employer benefits, Social Security, children and finances at the time all play a role. Regular financial checkups should be performed more frequently at least 5 years before retirement.