Do you combine your finances with your partner? If you do, chances are that you might be happier. In this episode of Retirement Starts Today, we’ll explore a WSJ article written by Julia Carpenter titled Couples Who Combine Finances Are Happier. So Why Don’t More Do It?
In addition to examining the benefits of combining finances, we’ll take a look at the reasons couples choose not to pool their resources. Finally, I’ll share my thoughts on why merging with your spouse’s finances could be a boon to your retirement.
Make sure to stick around for the listener question segment. Bret and I discuss whether it is worth self-funding long-term care rather than purchasing long-term care insurance. Listen in to hear discover whether you’re surprised by our response.If you don’t have long-term care insurance you won’t want to miss my discussion with Bret about self-funding long-term care. Click To Tweet
Outline of This Episode
- [1:22] Couples who pool their finances are happier
- [6:30] Do we recommend self-funding long-term care insurance?
The benefits of combining finances with your partner
Studies have shown that couples who merge their finances have more stability and spending power. They are more likely to save for retirement and purchase a home whereas couples who choose not to pool their resources generally have less wealth.
In addition to being more financially stable, couples who join their funds tend to have better relationships. The act of combining assets results in more accountability since partners can better observe each other’s spending habits. Rather than making frivolous purchases, couples who spend from a joint account tend to buy things that are more useful.The act of combining assets results in more accountability since partners can better observe each other's spending habits. Click To Tweet
Reasons couples choose not to combine their finances
Many couples choose not to combine their finances because they are worried about the financial mess that can come with separating finances after a divorce.
Some people come into a relationship with financial trauma from past relationships or experiences. This trauma can be a major reason that people choose to keep their accounts separate.
Others couples prefer to keep their accounts separate for the present but are willing to consider combining their assets in the future. They are happy to split their costs equitably and communicate openly about their financial goals before jumping into a situation where they share assets.Retirement is a great time to start comingling finances. Click To Tweet
I feel that combining finances is helpful for both the relationship and the pocketbook. Combining finances is also easier to do the earlier you decide to do it.
Retirement is also a great time to start comingling finances. Since you’ll be living off your savings you can send your IRA withdrawals, pension or Social Security payments go into a joint account. This would simplify your financial life.
One of the main benefits that I see is that combining finances forces couples to communicate about their finances and their goals. Would you consider pooling your finances with your spouse in retirement?
If you don’t have long-term care insurance you won’t want to miss my discussion with Bret about self-funding long-term care.
Resources & People Mentioned
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