Retirement Planning Checklist for Newlyweds

Getting married is an adjustment on many fronts. You have to get used to each others bad habits, adjust to living together and in most cases, become one financial unit. Whether you’re fresh from the altar or buying your first home together, here’s how you and your spouse can get your finances together and start planning for retirement.

9 Steps to Retirement Planning for Newlyweds

From setting goals to meeting with a financial advisor, this financial checklist for newlyweds can help you and your loved one build a solid foundation on your journey to retirement, an often difficult hurdle for couples. As you prepare to discuss financial goals, sit down separately to make a list of the liabilities and assets you are each bringing to the marriage.

1. Prepare a Joint Net Worth Statement

A good starting point for any newlywed couple is to sit down and look at their combined assets and liabilities. You should be open about everything from your bank account balances to your car loan and student loan debts. To determine your combined net worth, subtract what you owe from the value of what you own. Whether your net worth looks grim, knowing where you stand as a couple can help you establish a starting point for your finances.

2. Set Savings Goals as Newlyweds

Setting short- and long-term financial goals together can help you and your spouse see where your finances are heading, and how you can best use your money to your benefit. On this, Russ Thornton, a financial advisor and founder of Wealthcare For Women, said:

“Both a challenge and opportunity for newlyweds of any age is getting on the same page financially. This doesn’t necessarily mean combining checking and other accounts, but it does call for some discussions around each of your values, goals and priorities.”

Typical savings goals include building an emergency fund, saving for a home and contributing more to your 401k. As you discuss your finances, create a list of savings goals and put your highest priority goals at the top. Over time, you can visit this list to check in on your performance.

See: 6 Reasons Why a Joint Bank Account Is Good for Your Marriage

3. Decide How to Limit Spending

Newlyweds should come to some agreement about spending, especially in the case of big purchases and money spent on recreational activities. Keeping spending in check can generate additional funds you can use to save for retirement or pay down debts. By establishing and adopting healthy spending habits, you and your spouse share a common ground, helping alleviate some of the friction that comes with money management.

4. Update Beneficiaries on Accounts

H. Jude Boudreaux, CFP and founder of Upperline Financial Planning, emphasized the importance of updating beneficiaries:

“Have they updated their beneficiaries? Are there old pensions with survivorship benefits that need to be re-run with a new spouse? If the intent is to keep assets separate to pass those along to children of previous marriages, have they completed pre- or post-nuptial agreements to make that legally binding?”

Many couples forget to update the beneficiaries on their retirement accounts, life insurance policies and annuities. But keeping your designated beneficiaries up to date can protect your spouse from financial turmoil if you die. Have an honest conversation about how you want your assets distributed in case of your death to avoid any sticky legal battles.

5. Review Your Tax Situation

Combining incomes can result in an unpleasant surprise when filing your first tax return together. Filing jointly or separately are both viable options, and the best choice will depend on your specific situation. However, combining your incomes might put you in a higher tax bracket, while filing separately can make you ineligible for certain deductions and benefits.

6. Meet With a Financial Advisor

Financial planning for newlyweds should include a visit to a financial advisor. Meeting with an advisor can be especially important for newlyweds who have accumulated many assets prior to marrying or have children from previous marriages. A financial advisor can help you determine how much you can reasonably contribute to your retirement accounts and how you want to invest your money.

Related: The ABCs of a Happy Retirement

7. Discuss Your Preferred Retirement Lifestyle

Thornton also recommended newlyweds discuss their vision of an ideal retirement. For young newlyweds, this step should involve discussions of when they want to retire and how they want to spend their golden years together. For older newlyweds, this step will involve analysis of existing retirement accounts. You should also calculate how your savings will support you in retirement and any adjustments you need to make to your savings strategy.

8. Discuss Your Investment Risk Tolerance

Knowing how your risk tolerance compares to your spouse’s can help you establish a middle ground for how you invest. On this, Thornton said:

“… one of you may be very risk averse while your partner is willing to be more aggressive. You need to discuss and reach a balance that works for both of you. Or agree to employ different levels of risk in your respective retirement accounts.”

9. Make a 10-Year Goal

For young couples, planning 30 or more years in advance for retirement age can be difficult. Your finances and priorities change over time. To help you create a realistic action plan, consider what financial goals you want to meet in the next decade, and then determine how those goals will affect your ability to save enough for retirement. Knowing where you’re heading in the short term can help you align for the long term.

Married Couples Save More for Retirement

Married couples who work together can save significantly more than single individuals. A 2012 study by economists from MIT, Dartmouth and Harvard showed the differences in the amount saved for retirement for married couples and single individuals between the ages of 65 and 69. The study revealed how much more married couples can save compared to single individuals, highlighting the cost benefits of sharing a space and working together toward a common goal.

The above graph does not take Social Security, pensions or housing wealth into account.

7 Tips for Newlyweds Looking to Save More for Retirement

If you and your spouse are looking to save more for retirement, consider these action steps:

  1. Establish a concrete number for your retirement savings.
  2. Consider how aggressive and conservative investments can affect your savings.
  3. Tackle more aggressive investments, if your time horizon permits it.
  4. Find ways to trim the fat off your monthly budget to maximize contributions.
  5. Automate savings to keep savings on track.
  6. Put any financial windfalls toward your retirement savings.
  7. For older couples, check in on Social Security benefits and see how your benefits will support your ideal retirement lifestyle.

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