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Investing questions for couples

Before you merge your lives, think about how you and your partner are going to merge your finances.

Jess Morgan 30 September, 2015 | 5:00PM Christine Benz
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A question for couples: Separate or joint accounts?

Christine Benz: It really does depend on the individual couple. Some couples very much like to have separate accounts that they maintain, that they may even employ very different investment strategies with. So it's important to know at the outset what are we doing, what are our preferences on this fund, but there is no one-size-fits-all answer.

A “divide-and-conquer” approach to household finance

A really common set-up among couples that I've spoken with in regards to their financial matters is that you've got one person in the couple who is kind of the household financial manager. So that person handles bill paying, that person handles kind of the nitty-gritty of day-to-day banking. Then you've got the person who is more into investing. That person handles the investment accounts or provides guidance for the other person's investment account if he or she maintains it separately. So that’s a common framework.

It's a little less common to see couples where they are both sharing equally in both sets of tasks. So it's really important if you are part of a couple to make sure you know who is doing what. If you are, say, delegating the investment decision making to your partner, make sure that you understand and are comfortable with the strategy that he or she is using. So even though your partner may be the one who is handling the investment management, it's not your licence to tune out. You need to be plugged into what is our overall plan here, you need to be plugged into certainly what your shared goals are and what those goals will cost you.

How couples should approach their financial goals

It's important to take a step back and think about, well, when do we hope to retire, do we think we'll both retire on the same date or will one of us continue working either because we want to or because we have to a little longer. So think about those retirement dates. Think about any short or intermediate term goals that you might hope to hit along the way. So perhaps you would like to upsize to a bigger home or buy a vacation home at some point in the future, making sure that you've both discussed those goals near-term and further out into the future that you agree on them. Then you've spent some time quantifying those goals and prioritizing those goals if it looks too expensive to make all of those goals work at once.

Changing portfolios to prepare for joint retirement

Think about what that total retirement portfolio looks like in aggregate in terms of its asset allocation. Make sure that you are both targeting the same date and that you both have a retirement portfolio that has an appropriate stock bond mix given whatever date you've agreed upon.

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About Author

Jess Morgan

Jess Morgan  Jess Morgan is the associate editor of Morningstar Canada’s website. She began her career as a television producer and freelance writer, often making appearances on TV and radio as a commentator on politics and culture. She holds a BA in communications from the University of Winnipeg and a diploma in Creative Communications from Red River College.

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