It’s that time of year again, as summer sets off the traditional season for tying knots and ringing wedding bells. Many women are paying close attention to the details of the big moment when they say “I Do,” but a couples’ financials deserve a close scrutiny as well. A marriage is a time to prepare for the beginning of a long-term financial relationship also, and the better the preparation, the stronger financial foundation you have to build off of. If it’s not too late, take the time to exchange credit scores before the nuptials. Along those lines, here are a few vows you should make to yourself:
I Do…Plan to be Financially Involved
While many women are taking a more equal role in their family’s finances, the majority of women are still not as involved as they should be with their family’s investments or long-term financial planning. Since money can be such a contentious topic in many marriages, take the time to develop an honest and open dialogue about your finances.
I Do…Have a Separate Retirement Plan
Women have unique financial challenges, especially as we enter into retirement. On average, women earn less over their working years than men and they tend to live longer, which comes with significant risks. Many couples create a single retirement plan, but if it does not factor in the extra years and costs you are more likely to experience, you could be left vulnerable. Figure out what you will need, and put money away early and often.
I Do…Know Who the Primary Beneficiary Is on Our Retirement Accounts
Don’t assume that you are the primary beneficiary of your spouse’s retirement plans. Not all retirement accounts automatically designate a spouse as the primary beneficiary. For example, workplace retirement plans are not governed by the same regulations as individual retirement accounts. So a good first step is to exchange all the relevant documents. Then, the newlyweds can designate each other as the beneficiary on all workplace plans and any other insurance policies or IRAs. In fact, many IRAs allow you to change the beneficiary status online.
I Do…Have Assets in My Own Name
Always keep some assets in your own name, such as savings accounts, retirement and/or other investments, and bills. This will help you stay financially involved and allow you to have direct access to your own separate financial accounts if and when you need them.
I Do…Know Where our Family’s Important Documents are Located
Always know where your family’s important financial documents are kept and keep these documents updated and organized. This will prevent any confusion or delay if and when you have to access them.
I Do…Understand the Importance of Keeping Up with the Working World
If your future plan includes taking time away from work to raise kids or to care for other family members, make sure that you keep up your professional contacts and technical skills. Also, consider that you can open up a Spousal IRA and contribute to it so that you don’t lose out on the momentum to save for retirement. Both will help you reenter the workforce when you are ready.
For same sex couples, financial issues can be different and more complicated. Many same sex couples consult with a financial planner before they marry in order to get on steady financial footing from the very beginning.
For new brides, this is a wonderful and exciting time in your life. Keeping these financial vows will help get your new life together off to a happy and healthy start.