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Marrying later in life? 3 things to talk about first
Getting married when you’re older—when you have an established career, more assets, and possibly kids—requires different financial considerations. Here are a few to discuss together.
Getting married is different when you’re older. You already have the dishes, fancy mixer, and guest towels. But you may also own a home. Or have a (bigger) savings account. Maybe credit card debt. Maybe kids.
Marrying later in life—when you’re more established—requires different financial considerations.
1. Talk about how you’ll manage money day-to-day.
Discuss whether you’ll comingle your funds. Older couples have had more time to manage their “own” money and may find it’s an adjustment to share.
“You’re not just merging your money, but also your lifestyles,” says Heather Winston, assistant director of financial advice and planning at Principal®. “Think about how you’ve been managing your money separately. Then talk about what you’ll do differently.”
- Combine money and pay bills from joint checking and savings accounts.
- Keep some accounts separate and open a joint account or two. You may have some bills you want to pay from your own accounts (think college funds for your kids) and others you’ll pay together (like a new mortgage).
- Continue to maintain separate accounts. Decide who will pay which bills and how you’ll save for goals separately and together.
Tip: Understand how marital assets are handled in your state. Every member of a joint account could have legal rights to the money. It also means if one person gets sued or fails to make debt payments, the money in a joint account could be at risk. Consult an attorney to understand the legal implications.
If you maintain separate accounts, consider how you’d access the money in case of an emergency or if someone was incapacitated.
2. Decide how to handle assets and debts.
Set a time to talk numbers, laying all your cards on the table. This is really about setting priorities, not airing dirty laundry. Share what you each bring to the marriage, prioritize what matters most to you as a couple, and then build a budget based on that.
Some conversation items:
- Assets. Bank accounts, investments, real estate, or retirement savings (like a 401(k)s or IRAs).
- Income. Paychecks, rental property, or other sources of income.
- Debt. Cars, credit cards, mortgage, student loans (for you or your kids), or personal loans. If you’re planning on making some big purchases together (a vacation home, a new car, etc.), consider sharing your credit scores, as well.
- Child support, alimony. If it applies to you.
Tip: You may want to spell it all out in a prenup, an agreement meant to ensure your wishes are clear in case of divorce (who’s entitled to property and who’s responsible for debt). Consult an attorney to understand the legal implications.
3. Figure out what else you need (financially).
When you have a feel for your cashflow as a couple, work through the remaining aspects of your overall financial plan.
Some topics to consider:
- Health and dental insurance. Getting married is considered a “benefit event” at work, meaning you can make changes outside of the normal election period. If you each have coverage available, consider whose is a better fit for your joint needs.
- Life and disability insurance. Do you have adequate coverage? If you’re not sure how much you need, use our disability insurance calculator. And update your beneficiaries while you’re at it.
- Long-term care insurance. Once you marry, you’re responsible for your spouse’s medical debts. Medicare doesn’t cover most nursing home care, and a married couple’s combined assets are counted when determining eligibility for Medicaid.
- Retirement plans. Is this a good time to increase participation in your 401(k), contribute to IRAs, or make catch-up contributions? Update your beneficiaries, too.
- Will/estate planning and trusts. Create or update your will, power of attorney for health care and for finances, and a health care directive (“living will”). Some people also create a living trust. Trusts can get complicated, especially if either of you have children, so enlist the help of a good estate planning attorney.
- Taxes. Being newly married may bring tax benefits, but it could also result in higher taxes. Talk to your tax advisor about the implications and if it’s better to file individually or jointly. The name on your income tax returns should match the name you’ve registered with the Social Security Administration.
If you or your partner have been married before:
- Pension/retirement benefits and rules for former spouses. Generally, pension benefits earned during marriage are considered joint assets, but how the assets are divided and whether the survivor benefit is payable is up to your state’s divorce court. Review any Qualified Domestic Relations Order before remarrying.
- Social Security. Understand ex-spouse benefits and how they affect you.
- Divorce decree provisions. Review any provisions regarding alimony and remarriage, life insurance, child support, and additional provisions for kids from your prior marriage. Do clauses need to be reevaluated now that you’re remarrying?
And if you have children:
- Financial aid for children’s education. A new spouse’s income may be considered in college financial aid applications. Some people postpone marriage because of that, especially if they have a big salary discrepancy. (Though a large, blended family could work in your favor if the kids are in college at the same time.)
What to do next?
- Read “6 money conversations to have before marriage.”
- Need help? A financial professional can help you navigate combining your finances—providing expertise and an objective view. Check with your HR department or employer to see if your company’s retirement savings plan offers this service. Or, we can help you find one.
Reference of checklist is not an exhaustive list of what you should do. It and this communication are provided as education only with the understanding that Principal® is not rendering legal, accounting, investment advice, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment, or accounting obligations and requirements.
Disability insurance has limitations and exclusions. For costs and coverage details, contact your local Principal representative.
Long-term care insurance is not offered by any member company of the Principal Financial Group®.
Investment advisory products offered through Principal Advised Services, LLC. Principal Advised Services is a member of the Principal Financial Group®, Des Moines, IA 50392.
Insurance products are issued by Principal National Life Insurance Company (except in NY), Principal Life Insurance Company and other companies available through the Preferred Product Network, Inc. Securities and advisory products offered through Principal Securities, Inc., 800-247-1737, member SIPC. Principal National, Principal Life, Preferred Product Network, and Principal Securities are members of the Principal Financial Group®, Des Moines, IA 50392.