Over the years the two of us have worked with hundreds of couples and through that experience we've found that, generally, one person in the relationship takes on the task of managing the money. While this may work well for you and your loved one, we believe it's important for everyone to feel empowered and knowledgeable about their money.
With Valentine's Day just behind us, we wanted to give you some advice if your Valentine manages your family's money.
Understand how much you have and where it is
One of the biggest things we ask that you know is where your accounts are and how much you have in each. If you each have multiple investment accounts with different custodians, we understand that this can get complicated, but having a list in a secure location of account information so that both of you can access it could help you to feel secure and confident in your finances.
What would you do if your loved one experienced a medical emergency and couldn't pay the bills or make the withdrawals when you needed them? Having a basic understanding of where your accounts are and what's in them can help you be prepared and empowered in your financial life.
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Know what your risk tolerance is and how your investments align with it
One of the most important aspect for any investment strategy is risk tolerance. This is the amount of risk you can take and still meet your goals, which is generally based off of your withdrawal timeline and the amount you have in savings overall. For example, if you had 35 years until you needed to withdraw the money from an account, you would likely have a higher risk tolerance than someone who needed to take a distribution from their retirement account in the next five years.
While you may trust that your significant other has your best interests in mind and it already doing this, doing a double check can help keep you from financial disaster. Understanding your risk tolerance and ensuring it's aligned with how your money is invested you can be sure that you'll have the income you need for as long as you both need it.
Know if you're on track for retirement and beyond
Another item you should stay on top of even if your loved one manages your finances is whether you're retirement savings or withdrawals are on track to meet your goals. Both of these items are highly variable depending on the couple and can be difficult to track properly, so we highly recommend working with an adviser to ensure that your retirement savings will last as long you'd like them too.
With both partners in a relationship being confident in their finances, you can help eliminate confusion and move forward to have the successful retirements you've been working towards.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
