Getting married is a very exciting time in your life, and more times than not thinking about your financial plans after your wedding day is the last thing on your priority list leading up to the big day. However, it's critical that you and your soon to be spouse go over your financial and investment plans for after you say "I do". Here's the top four questions that you should discuss with your partner before your wedding day to ensure that you both are on the same page:
Getting Married? 4 Financial Questions To Discuss With Your Partner
1. What Are Our Retirement Goals?
It's very important to be on the same page with your financial goals, retirement included. Discuss what you both want to do during retirement. Where do you want to go? When do you want to retire? What does retirement look like to you? Once you have clear answers to these questions you can better come up with a retirement plan for the both of you.
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2. How Should We Invest Our Money?
Once you understand both you and your partner's retirement goals, it's now time to discuss how you want to invest your money. You'll want to decide if opening a joint retirement account or seperate accounts makes the most sense for you and your partner. While you can open joint retirement accounts, you can't open a joint 401(k) or Roth IRA. If you do have separate retirement accounts, it's important to communicate about how much both of you are investing in them.
3. How Much Life Insurance Will We Need?
If you think that life insurance1 has nothing to do with investing, think again! If you have family members or loved ones who depend on your income, then life insurance is a necessity. It's reccomended that you get a 15- to 20-year term life insurance policy worth 10–12 times your annual income2. If you are religiously investing 15% of your income toward retirement for 15 to 20 years, odds are that you’ll be self-insured before the end of your life insurance term. This means that you won't need life insurance anymore because you have saved up enough money to cover what the insurance company would cover should you pass away.3 Life insurance will provide a security blanket that will give you and your partner peace of mind.
4. Should We Work With A Professional?
Before you get married it's important to discuss whether you are going to get financial help from a financial professional or not. Often times talking about finances can be a stressful topic for couples, which is why meeting with a financial advisor is so helpful. A financial advisor can provide you with the right tools and insight to help guide both you and spouse in the right financial direction.
In the midst of wedding planning and getting excited for your big day it's extremely important to take a moment to discuss you and your partner's finances. By addressing these questions sooner rather than later you will avoid conflict down the road.
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