Marriage: Entering a New Investment Life

There are a lot of issues that couples need to think about when tying the knot — wedding preparations, family and, of course, finances. Addressing personal finance and investment issues before the big day may help improve your odds of being together years later. Here are some financial issues that you should consider when embarking on a matrimonial journey.

Discuss financial styles before marriage — Start your marriage off on the right foot by having an honest discussion about financial habits and objectives. Are you a saver, but your prospective spouse lives paycheck to paycheck? Do you prefer investing heavily in stocks, but your fiancée’s portfolio is filled with bonds? What are each of your short- and long-term financial goals?

Think holistically — Consider each spouse’s investment portfolio as part of a whole. For instance, if both you and your mate contribute to 401(k) plans and IRAs, see how your investment choices match up. Depending on your goals for retirement, one or both of you might want to invest more aggressively. Or you might find that your combined portfolio is more exposed to risk than the two of you can tolerate. Either way, you can rebalance your asset allocation by shifting money from one asset class (stocks, bonds and money market instruments) to another or by adding new money to the underrepresented asset class.

Review documents — Along with other legal documents, remember to update your beneficiaries on life insurance policies, IRAs, employer-sponsored retirement plans and pensions. Also, be sure to either create or modify your wills.

Determine your tax status — Once married, you’ll need to decide whether it’s best to file your taxes jointly or separately. Usually, the “married filing jointly” status results in a lower tax liability, but in some instances — depending on deductions and income earned — “married filing separately” may be more advantageous. Be aware, however, that if you choose the latter option, you can’t contribute to a Roth IRA or convert from a Traditional to a Roth IRA. Check with a tax attorney to determine your optimal filing status.

Meet with a professional — Make a date with a qualified financial advisor to discuss your financial goals, such as buying a home or investing for college. Then, after making sure that all of your financial bases are covered, relax and enjoy the beginning of your life together.

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