Financial planning tips for newlyweds

What should recently married couples do upon returning from their honeymoon? A good task for the to-do list is to plan their finances together.

In the 2015 Couples Retirement Study, Fidelity Investments asked married couples for their best advice to newlyweds about financial planning. The top six suggestions are:

  • Save as early as possible for retirement (57 percent)
  • Make all financial decisions together (41 percent)
  • Make a budget and stick to it (39 percent)
  • Be sure you have an emergency fund (38 percent)
  • Don't hide spending (26 percent)
  • Disclose income, debts and assets early (24 percent)

The Fidelity survey showed that more than half of all couples make joint decisions about day-to-day finances (58 percent) and retirement (54 percent). The survey also found that when one partner is the primary decision-maker, that person often believes the other partner doesn't want to be involved. But one-third of such couples disagree on this answer.

So, the respondents might be underestimating the extent to which their partners want to be involved. Bottom line: Talk with yours about finances and how much he or she wants to be involved.

When deciding how much to save for retirement, young married couples usually need to balance this goal with other needs, such as establishing a household, starting a family and paying off student debt. But it's not always easy to fit all those competing goals into their budget. When retirement is decades away, most people don't need to invest lots of time making extensive, complicated calculations. They can use simple guidelines for determining how much to save.

Older newlyweds would do well to discuss a common vision for their retirement years that includes how long each partner will work, where they'll live, what they'll do with their time, how much income they'll need to do the things they want to do and the adequacy of their retirement resources.

Many older people are approaching their retirement years with only modest savings and will need to make trade-offs between competing financial goals. Older newlyweds would do well to spend the same amount of time they spent planning their wedding and honeymoon to plan the rest of their lives, especially when it comes to financial and retirement issues.

Regardless of age, all newlyweds should update their beneficiary elections to make sure the new spouse is the recipient of any death benefits. Fidelity's survey shows disagreement on the beneficiary of life insurance policies by more than one-fourth of retirees (27 percent) and one-fifth of people approaching retirement (20 percent). Bad move!

In order to maintain a strong relationship, try to come to an agreement about who should benefit if one or both members of the couple should pass away.

About two-thirds (67 percent) of couples say they both know where to find important legal and financial documents. The remaining couples either don't agree on which partner knows where to find these documents, or they say only one partner knows where to find these documents. Another bad move!

Determine the best place to file critical paperwork -- either online or offline -- and make sure you both know how to get your hands on that information.

Fidelity's survey results show that it's a good use of your time to plan your finances together. Couples who do are more confident in their future and the ability of their partner to take over responsibility for their financial assets if necessary.

Financial planning for newlyweds doesn't need to be rocket science. You just want to make it a priority for your new life together.

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    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Retirement Game-Changers: Strategies for a Healthy, Financially Secure and Fulfilling Long Life and Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck.