Without question, investing is one of the most important things you can do to build wealth over time. Mastering the subject takes time, diligence, focus, and sacrifice. While it’s possible to be successful as a lone investor, there can be great power and synergy in investing as a couple – in bringing your partner along for the journey.

Finances in general can be a sensitive topic. Throw something as impactful and tumultuous as investing into the mix, and things may feel even more complicated. This is especially true if you are investing with a loved one, such as a spouse. The emotions in your relationship and the volatility of investing don’t always go well together, which is why it’s important to have a plan going in.

Investing doesn’t have to be difficult. In fact, we at Financial Professional dedicate our own time and energy to make sure that everyone, regardless of education, can inform themselves on the topic. This article will cover important considerations when it comes to investing as a team, so you can work together toward building the future you want and deserve on equitable terms.

Before we continue, Financial Professional wants to remind you that all materials in this article are educational in nature. This article is not investment advice. Always consider your personal situation – and the help of a licensed financial professional – when making any investment decisions. 

First Thing’s First: Communication

The most important element of any relationship is communication. This is especially true if you’re looking to include your partner in your financial picture. Without proper communication, you can’t make progress in your relationship or in your finances.

Everyone’s relationship is different, and everyone has a different way of communicating with their spouse or partner about topics such as investing. And that’s okay! There is no right or wrong way of broaching investing as a couple – the important thing is to just get started.

That being said, the “best” way to go about approaching the subject is to be open and respectful with your partner. If the relationship is fairly fresh, or you’ve never discussed finances before, it can feel uncomfortable. That’s very natural. Like anything else in life, the more you do it, the more comfortable you’ll become.

Furthermore, if you truly want to look at investing as a couple, it’s crucial that you and your partner settle on a similar wavelength on the topic. This starts with knowing what to communicate.

How Do I Begin the Conversation?

Generally speaking, one of the best first steps you can take is to clearly define – and talk about – expectations and roles. To give an example, if one partner is the breadwinner of the household, they may be in charge of funding the accounts. The other partner, then, may be there for support or accountability.

However, if both partners bring money home, you may have to set up an alternative arrangement. This may be a specific dollar amount or percentage you contribute with both partners investing their cut separately.

On the other hand, one partner may be more financially savvy while the other may want nothing to do with the checkbook.

Every couple’s dynamic is unique, which means every couple’s investing situation will be, too. Only you and your partner know what roles you play best. If you’re both financially savvy rockstars with a high financial IQ, great! On the other hand, if you’re working hard to get out of debt, fantastic! Alternatively, if you share equivalent responsibility, mazel tov!

Once again, there is no right or wrong answer here. What matters most is that you have an open, respectful, and clear dialogue about your financial situation – especially your investment vehicles.

Know Your Individual Situation

If you as a couple have never discussed joint finances or investing, it may be a good idea to get a grasp on where you stand individually. You may want to review items such as:

  • Your budgets and balance sheets
  • Individual income
  • Existing accounts, such as 401k, IRA, or taxable accounts
  • Existing estate planning documents, such as wills or trusts
  • Your risk management, such as life insurance policies, disability, and long-term care plans

Why is this important?

For one, it’s always a good idea to know where you stand financially. Furthermore, it helps you to be transparent when you bring up the conversation initially. Transparency is a major contributor to gaining trust as a couple when it comes to the subject of investing.

Additionally, if you think about the conversation from your side, you would likely appreciate if your partner didn’t hide any financial items from you.

This process is also important for the sake of analyzing your complete financial health. Whether you’re working with a financial advisor or quarterbacking your own finances, there is no value in omitting pieces of the puzzle – no matter how minute they may seem. If there is anything you’re uncomfortable with, it’s much better to get ahead of the issue instead of letting it linger.

Account Ownership Structure

Another area that is not always well-covered in investing as a couple is account ownership structure. Simply put, this is how ownership of specific types of investment accounts is divided between a couple. This subject is most relevant when it comes to taxable (brokerage) accounts, since retirement accounts can only be held in a single name. Keep in mind that property laws vary state-to-state.

It’s advisable that you consult an estate professional with questions related to your specific state’s laws. To reinforce this idea, we’ll dive into a brief refresher on the different types of basic account ownership.

Individual accounts are held in a single name, which means they belong to one person. Retirement accounts are single-name only by definition. Brokerage accounts can also be held in a single name. When the owner passes, the account will be distributed to Transfer On Death beneficiaries, or the decedent’s estate.

Joint accounts, on the other hand, are held by more than one person. There are essentially two forms of joint account ownership.

Joint with Rights of Survivorship (JTWROS)

Joint with Rights of Survivorship means that all account owners have equal ownership over the account – and its assets. If one account owner passes away, the account will go entirely to the surviving owner. In these cases, the account will not have to go through probate court to decide the fate of the funds.

Joint Tenants in Common (JTIC)

Joint Tenants In Common refers to the ownership structure where individuals own a specific percentage of the assets in the account.

For example, a couple may decide to split an investing account 75-25, with 75% going to Partner A and 25% to Partner B. Unfortunately, if one account owner passes, a JTIC account may then be subject to the probate process. This means that the surviving owner is now a co-owner with the decedent’s estate.

You should always discuss the way you structure ownership of your assets before you start investing as a couple. While there is no right or wrong answer here, you may save one or both of you a major headache down the road.

Investing as a Couple: Consider Your Beneficiaries

While on the topic of account tilting, it’s appropriate to discuss your beneficiaries. It’s common for both single individuals and couples to designate children as the beneficiaries of investment accounts. However, there’s no law or rule that says you have to designate your children as recipients of your estate or accounts upon death. Still, it’s advisable that you elect someone as a beneficiary to avoid throwing your assets through a lengthy (and potentially expensive) probate process when you pass.

Investing as a Couple: Your Financial Goals

Your financial goals as an individual and a couple should always drive your decisions when it comes to finances and investing. As it relates specifically to your partner or spouse, outlining your investing goals is crucial to staying on the same page.

One of the most common goals that Americans of every age look toward is investing for retirement. The common assumption is that couples will retire at the same time – but that’s not always the case. You may really enjoy your work, while your partner may be ready to call it quits tomorrow. Or, you may be in a relationship where each person is a different age, even a decade or more apart – in which case expecting both partners to retire at the same time may be unrealistic.

The point, once more, is that no two couples’ financial goals are created equally. As we mentioned earlier, communication is key. Whether you and your partner have concrete timelines or general outlines for your goals, it’s important that you stay on the same page.

Remember: life is not static. As such, your goals and priorities will change as you age. This may be due to life events, career moves, or general changes in taste or preference. When these things happen, one of the best things you can do is go back to the drawing board and reassess your financial plan.

Start by Asking Yourself Some Questions

Here are some important questions to ask yourselves:

  • How does this change the trajectory to our goals?
  • Are our goals the same as they once were?
  • What do we need to do to get back on track?
  • Are there goals that are now more important than others?

If you’re working with a financial advisor, you should schedule periodic reviews to discuss these questions openly. However, if you’re not using a financial advisor, it’s essential you have these conversations as a couple. Monitoring your progress toward your goals is very important. In fact, you should revisit your progress at least annually, even if neither partner has made any substantial changes.

Such diligence will help you to stay on track and give you a higher probability of meeting your financial goals. Do all of your goals have to be mutual? Absolutely not. There is nothing wrong with each member of the partnership maintaining exclusive goals. However, each partner knowing what the other’s goals are is essential to maintain a healthy relationship and financial life.

Personal Preferences

While you may be a couple, you are still two individual human beings with individual tastes, priorities, preferences – and investing goals. For example, you may have a higher degree of risk tolerance than your partner. Or, your partner may take an active stance on socially responsible investing, which could put restraints on the holdings in your portfolio.

As you may imagine, these scenarios aren’t rare; rather, likely the opposite. So, what is the best way of knowing these preferences?

Communication!

Even if you are the one taking the lead on investing as a couple, it’s advised that you have these conversations with your partner if you intend to view your finances together. You’re always better off asking rather than assuming.

Investing as a Couple: Teamwork

If you are in a truly committed relationship, you know it takes both of you to make it work. This includes your investing and financial picture. If you are together long enough, there are bound to be plenty of bumps along the road. These may include:

  • Job loss or career changes
  • Bad markets
  • Financial or family emergencies

The absolute best thing you can do throughout these challenging scenarios is to support one another. There may be times where you have to pick up the slack and vice-versa. 

The good news is: tough times don’t always last.

The even better news is: if you’re in sync with each other, you’ll be able to go much further than you would alone.

A Final Word on Investing as a Couple

The topic of your finances and investing isn’t always a comfortable one; this might be even more true as a couple. While not all couples feel comfortable with mixing their finances or even discussing them, there may be a lot of value in doing so. The key to the dynamic is communication. A strong foundation of open, honest, and respectful communication is what will serve you best as you build your financial future together.

Take into account a few pieces of advice:

  • Be mindful and open to the preferences that your partner may have
  • Get a grip on your own situation
  • Understand and discuss your options when it comes to the ownership and titling of your assets
  • Get on the same page when it comes to important estate topics, like beneficiaries, trusts, wills, etc
  • Make sure that you are plotting the course to your financial goals together
  • Hold each other accountable and monitor your progress towards those goals
  • Lastly, encourage and support each other throughout the process.

If you keep these things in mind, you’ll go much further together than you ever would alone.

Jose Hernandez
Jose Rafael Hernandez is known as "The Millennial Money Mentor" on social media. He and his family are immigrants to the United States from Venezuela. The unique challenges that he faced at a young age taught him the real value of money and its importance in life. Jose studied finance at Mercer University, where he also competed in Division 1 Baseball. After his athletic career, Jose began his professional career in the finance industry. He started his career as a wealth management advisor for one of the top Investment Advisory firms in the US, where he was responsible for just north of $20mm in AUM. Jose currently holds the Series 7 and 66 licenses. Jose decided to leave the firm so he could have the freedom to create his brand on social media, geared towards educating millennials in the areas of personal finance and investing. His mission is to leave a positive impact on others while building his own legacy and providing for his family.

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