What to do about your finances before you say ‘I do’
Coming together at 50-plus is different from getting married in your 20s, particularly when it comes to money. “You’ve had a lifetime of solidifying your money beliefs” and behaviors, says Janet Stanzak, president of the Financial Planning Association. These are some ways to smooth the transition if you’re tying the knot this summer.
Talk about prior obligations
Older couples bring obligations such as support payments and debt as well as decades of financial experience to a marriage. Lili Vasileff, a Greenwich, Connecticut, fee-only certified financial planner specializing in financial matters related to divorce, suggests sharing credit reports and scores, and reviewing previous divorce agreements, which contain details about cash flow, assets and debts. “If your new spouse has already pledged half his pension to his ex-wife, it’s important to know that,” she says. Tongue-tied? A financial adviser, lawyer or accountant can help connect the dots for your spouse-to-be.
Don’t forget your adult children
You’ve probably thought about what you’d like to do for them financially, and they’ve probably thought about what’s coming their way someday. A later-in-life marriage changes that — and complicates your estate planning. Questions arise: Will the new spouse inherit money that would otherwise have gone to the kids? And do all adult children benefit equally from your individual or combined resources? Discuss your decisions with your new spouse and adult kids, with the goal of reducing controversy later on; then consider formalizing your plans in a prenuptial agreement.
Dot the i’s and cross the t’s
In addition to considering a prenup, revisit your estate plan as well as any beneficiary designations. Wills are trumped by legal titles to real estate or beneficiary designations on financial accounts, retirement plans and insurance policies. Make any changes in writing, and be careful with Social Security. If you’re closing in on age 62 and intend to apply for a former spouse’s Social Security benefit, don’t remarry. You have to be single at the time you apply.
Decide how much to combine
At the time of my second marriage, my husband was in his early 50s, I was in my mid-40s, and we each had two kids. We maintained our individual accounts and opened one for the house. We each kick the same percentage of our incomes into the house account and have a joint credit card. But we pay for our children separately. (I’m still writing checks for college; he’s done.) The system has worked well for us, as it has for my mom and stepfather, who married in their 70s. “It removes some of the potential for conflict,” notes Stanzak.
— With reporting by Kelly Hultgren
Jean Chatzky, best-selling author, journalist and money editor at NBC’s Today, is AARP’s financial ambassador.
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