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Financial planning strategies for newlyweds

Here are some financial planning considerations and steps newlyweds may want to take after the wedding. Our Bill Cass highlights some of the key areas.

With the summer wedding season underway, it’s a time of celebration after many months of planning.

It is also time to consider financial planning as couples look to create a budget to move ahead and have deeper discussions on finances, values and objectives.

Here are some financial planning considerations and steps newlyweds may want to take after getting married.

Create a budget

A first step for many couples is getting assets organized and setting up a household budget. This involves documenting monthly cash flow, expenses, and creating a list of assets.

Organizing joint assets may include:

  • Merging bank accounts and credit cards.
  • Deciding whether assets (bank accounts, real estate, automobiles) should be re-titled to joint ownership. If there has been a name change, then asset ownership needs a review and name changes need to be addressed.
  • Contacting the Social Security Administration to file a name change request if applicable.

Set financial goals

  • Consider delegating tasks and responsibilities. Determine which spouse will be responsible for different tasks, such as paying the monthly credit card bill or the mortgage.
  • Your budget should support your overall financial goals. Paying down debt or saving for a down payment on a house could be priorities. Setting aside savings for a household emergency fund is another consideration.
  • If you are looking to move from renting to owning, as a couple, you may want to establish a savings program for a down payment on a house.
  • If you are carrying significant debt (such as student loans), you may want to create a plan to pay off that debt. Explore opportunities for debt consolidation depending on the circumstances. It is important to learn about the details of this process and be mindful of the potential downside of consolidation. See “Pros and cons of consolidation” at student aid.gov.1
  • Determine the potential impact of your marital status on taxes. You and your spouse can choose to file a joint return (married filing jointly). For most couples, filing jointly will generally make the most sense. It’s important to consult with your tax advisor. If you are planning to file this way, estimate what the marginal tax bracket may be and plan your savings accordingly. There may be tax savings by filing jointly and an opportunity to direct these savings into another savings objective (house down payment account, emergency savings account).
  • Couples should also review whether combined income has a positive or negative impact on their ability to take advantage of certain tax or retirement-related provisions. For example, to make a full Roth IRA contribution as an individual, your modified adjusted gross income (AGI) must be under $146,000, and for married couples filing jointly,  modified AGI must be less than $230,000.
  • Tax withholding from employers is another item to review. Does the current withholding need to be updated? Learn more about filing a new W-4 form from the IRS, “Tax to-dos for newlyweds to keep in mind.”
  • After marriage, have there been any changes to your credit score?
  • Review insurance coverages such as life, disability, health, auto, home and rental. Do any of the policies need an update? For example, would you benefit from a multi-car discount if all of your cars were under the same auto insurance plan?

Update employee benefits

  • Review your employer-provided benefits plan, including health care coverage. If both spouses work and have access to employer-provided coverage, review plans to determine if it makes sense for one to drop coverage from their employer and be added to the other spouse’s plan to take advantage of cost savings.

Finalize key documents

  • Establish a healthcare proxy. Executing a healthcare proxy is important so each spouse can access health-related information for their partner.
  • Consider an advanced directive and power of attorney. These documents are typically prepared at the same time as the healthcare proxy designation. They provide instructions for healthcare and financial decision-making for the spouse in case of an emergency.
  • Update beneficiary designations on any retirement accounts or insurance policies.
  • Work with a legal professional to establish a last will and testament.

Seek expert advice

Couples may want to begin this phase of planning by meeting with a financial professional. Seeking expert advice can help couples with a comprehensive plan. If you are planning ahead to get married next year, you may also want to consider meeting with a professional early in the process to be prepared for the many steps you will take after marriage as a couple.

 

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1. Studentaid.gov, “Pros and cons of consolidation,” (studentaid.gov/help-center/answers/article/pros-and-cons-of-consolidation), 2024.

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