Second Time Around Money Tips

Constant negotiating about who pays what bill or how household costs will be split, is enough to stress any couple. Instead, find a systematic way to cover regular costs.

Whether your second spouse is the complete opposite of the first or a new and improved version of the original, second marriage finances are usually different than the first. Keeping things separate may be more comfortable at the start, but AARP Magazine wonders if that is still the right way to go after a decade in the article “4 Money Tips for Second Marriages.” 

Did you have a prenup before your second marriage? It’s not a big deal. You can also do a post-nuptial agreement. You can have either one one drawn up and put in a drawer. Chances are you came to the marriage with different incomes, assets and children. Talk about what is fair and come up with a document that works for both of you.

Do you have a system for paying ongoing household costs? One solution is a household account to which both partners contribute, with both contributing a certain amount, depending on income and asset levels. Some couples have a joint credit card, just like first-time marrieds, so every time you use the card, you’re not negotiating all over again about who is paying for what.

You might need help with managing your finances. If one of you is going to retire in the near future, how will that impact your finances? Can the person who is retiring first, wait to tap retirement savings before claiming their Social Security benefits? You need a strategy that will work for both spouses, and it must take into account your ages, retirement dates, assets and any health issues.

Different investment portfolios may be needed, if you have different investment comfort levels. Women are traditionally more conservative than men. Talk about your comfort levels with stock purchases and other kinds of investments. If you came to the marriage with a significant portfolio and a financial advisor, did you stay with your advisor or switch to your spouse’s? After 10 years, are you ready to combine accounts? Or, if for estate planning purposes, does it make sense to keep them separate?

If your second marriage has made it past the 10-year mark, when was the last time you reviewed your estate plan and your designated beneficiaries? We hope you updated your wills and reviewed all  your accounts with named beneficiaries shortly after you were married, but if not, now would be the time to do this important task. You don’t want anyone’s ex receiving a large IRA or the proceeds from a life insurance policy.

This may be the time to consider your attitudes towards “mine and “ours.” For some people, the 10-year mark gives them the security that their marriage is a keeper and they begin to let go of some of the separated assets. For others, there’s no need to blend assets or accounts and it’s not a reflection of their feelings about the marriage, but just what they are comfortable with.

Reference: AARP Magazine (January 2019) “4 Money Tips for Second Marriages”

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