Investing to meet your shared goals can forge a special bond between you and your spouse.
Investing together may not strike you as especially romantic, but it can be a very satisfying part of marriage, something that you can do, and benefit from, together. If one of you has had some experience with investing, or is accustomed to working with a financial advisor, you’ll be off to a head start. But it can also be fun to learn new skills together.
Sharing investment decisions may come about naturally if you handle the other parts of your financial life together. Or you may want to split up the responsibility, with one of you taking the lead on long-term investment decisions and the other on meeting short-term goals.
If you and your spouse have been postponing working together on investment decisions, other people’s experiences can jar you into action — or encourage one of you to press for change.
For example, you may have a divorced friend who made decisions she later regretted because she was uncomfortable handling investments. Or you may have tried to help a relative cope not only with the grief of widowhood but the trauma of sudden financial responsibility.
Here’s one schedule for getting started:
- Talk with your spouse about the financial goals you share.
- Discuss what you’ve done to help make them realities.
- Make a list of your investment questions.
- Find a financial advisor to help provide answers and plan future investments.
- Review all your investment decisions together on a regular schedule
A marriage bonus
Marriage has lots of benefits, financially speaking. Consider just a few:
As a married couple investing together, you have some advantages in accumulating the money you need and putting it to work for you. While it may not be true that two can live as cheaply as one, you can certainly live more cheaply together than you could apart, leaving the balance for investment. If you both work outside the home, you may have more income to invest plus the added benefit of two tax-deferred retirement plans to which you can contribute. Remember, though, that IRAs and retirement savings plans are individual accounts, not joint ones.
It can be easier for a married couple to follow some of the basic principles of investing, such as diversification. The whole notion of diversification is owning various types of investments that perform differently as the economy changes. But the problem often is having enough money to do it.
If you have two incomes, you can buy a diverse mix of investments for each of your retirement and regular investment accounts. Or perhaps you’ll decide to work together to diversify your overall investments. One of the advantages of planning your investments across the board is that you have a lot more flexibility in getting the diversification you want.
Married couples should do estate planning to ensure that the surviving partner has lifetime income, that their assets are distributed as they both wish, and that the smallest possible gift and estate taxes are due.
Married US citizens can give or leave each other assets valued at any amount without gift or estate tax. But assets left or given to other people, including your children or grandchildren, may be taxed if the total value is higher than the amount that’s exempt from tax.
By estimating your current estate value and what it has the potential to be, you can begin to make decisions that will accomplish your goals. It’s essential to work with an.
Working with an advisor
If your investment partnership is going to be effective, you and your spouse must both be comfortable working with your financial advisor. One of you may already have a working relationship that can be expanded to include a third person. If the three of you can consult as equals, it probably makes good sense to build on the existing association.
But, if either you is treated like a third wheel or feels ignored, it probably makes sense to look for a new advisor together.
You both may be more comfortable asking questions or expressing opinions if you’re starting with a clean slate. You can make your partnership approach clear if you both participate in the conversation, both ask questions, and consult with each other, instead of having one of you seem to be making all the decisions.
Investing And Marriage: What You Should Know? by Inna Rosputnia
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