MainStay Mutual Funds
Retirement Plan Services
The months after a wedding can be an exciting and euphoric time. But they can also feel strangely unstructured after the whirlwind of activity that preceded them. It’s not uncommon for newlyweds to find themselves wondering, “Now what?” As you and your partner go through the post-wedding transition, you may find that this period is an ideal time to make important decisions about marriage and finances, and, also, how you both will manage your household going forward. Pre-wedding and post-wedding finances can be drastically different. So, while marriage and money should be one of the major things to discuss before marriage, it is also a topic you should revisit periodically after you are married.
There’s no one-size-fits-all approach when it comes to sharing money as a couple. Some people find it easiest to merge their finances completely, some prefer to keep their finances separate, and others take a “yours, mine, ours” approach with joint accounts for shared expenses and individual accounts for everything else. It can become even more complex when kids are brought into a marriage—or if there are existing assets, like a home or a business. The solutions you and your partner come up with should be based on your unique situation, your personalities, your relationship with money, and your shared financial goals. All of these can change over time, but they’re important topics for conversations to have before marriage. Treat the first move toward merging finances as the beginning of an ongoing discussion. If pre-marriage debt, savings, and assets are being combined, you want to have the right legal and professional guidance right from the start.
A lot of newlyweds take on debt from their wedding, as well as from their honeymoon. Paying it off should be the first item on your post-wedding to-do list. You likely want to go into marriage with plans to save for a home or eventually have children, but debt from your wedding expenses will interfere with those plans. Don’t just resolve to pay off the debt. Draw up an actual payment plan with a realistic schedule for making your debt go away. This should be done proactively, but do not sacrifice your other long-term savings efforts. Both of you should continue to contribute to retirement funds and should keep up your insurance coverage.
If you receive cash gifts at your wedding, figure out how best to put that money to work for both of you. What are the immediate and long-term financial goals you’re working toward? Decide whether it makes more sense to use that money to pay down debt, to save for a specific goal, or to do a combination of the two. Maybe you want to use cash gifts to start saving for a down payment on a home, to arrange appropriate life insurance coverage, or to add to your retirement savings.
Getting married is a major milestone in life—one that should prompt you to update your beneficiaries on your retirement accounts and life insurance policies, and to reexamine your life insurance coverage to make sure both of you are carrying the right amount. If your spouse becomes your beneficiary, they will be protected from financial burdens like outstanding mortgage payments or the loss of your salary if you pass away prematurely. New York Life has solutions that provide protection with a guaranteed life insurance benefit as long as premiums are paid when due and that also have a long-term accumulation component. For example, a whole life policy has a cash value that can ultimately be used to supplement your retirement as your protection needs change.1 It may also pay dividends to provide further growth. (Dividends are not guaranteed, but New York Life has paid annual dividends for 167 consecutive years.) The right policy enables you and your spouse to prepare for whatever lies ahead.
Marriage changes many details of your financial life, including the way you pay taxes. So, it’s worth taking the time to talk to an accountant before tax season to learn how things like “married filing jointly” can affect your taxes and earnings. A New York Life financial professional can help you with the bigger, long-term goals, such as how to fund your retirement and save for educational costs, if you have children or plan to have them. Get started now and begin your marriage on secure financial footing.
A New York Life financial professional can help you with the bigger, long-term goals, such as how to fund your retirement and save for educational costs, if you have children or plan to have them.
1 Accessing cash value reduces death benefit and available cash surrender value.