Retirement Planning for Couples
Being part of a couple gives you some
advantages in preparing for retirement. First, you can have two incomes
to draw from, depending on your choices. If you work for different companies,  you'll
have different 2 EPF accounts, which can expand the options available to
you. And finally, if one of you becomes disabled or chooses to leave the
paid work force for a while, there's a partner to help make sure financial
plans stay on track.
You have a partner to work with toward
your joint financial goals, but you'll still want to take an active role
in investing. This is still real life – neither a fairy godmother nor your
own Prince Charming can do it all for you. The most important step you
can make is to take full advantage of the retirement investing opportunities
available to you.
Because you're not going it alone
anymore, it's important to look at your investments together. Consider
these factors:
-
When you look at your combined portfolios,
how much do you have invested in stocks, bonds, and cash? Are you comfortable
with that allocation given your goals?
-
Do your investments overlap a great
deal?
-
Do both of your retirement plans offer
similar features? Does one of them offer greater opportunities for diversification?
Investing Attitudes
Your investing attitudes may have
been very different when you were single. When you were on your own, you
may have been most comfortable keeping all of your savings in a money market
account, reserving stock funds for your retirement plan. Your husband,
on the other hand, may have been more aggressive, putting most or all of
his investments into growth-oriented stocks. If this is the case, your
portfolios certainly won't overlap – but they might still need some rebalancing.
On the other hand, you might have
too much of a good thing. Perhaps you were both money-market mavens, craving
the relative stability and predictable returns they offer. Or you might
have both been very active stock investors. In this case, you'll both need
to venture into new investment territory in very much the same way as two
divergent investors – putting together stocks, bonds, and cash in your
combined portfolios.
A Balanced Portfolio
Putting together a coherent, balanced
portfolio the first time can be a bit of work, but maintaining the balance
you've established will almost certainly be much easier. Once a year, sit
down together and look at your portfolio – you'll receive year-end statements
for all your investments to simplify this process.
Consider:
-
Has the balance of stocks, bonds, and
cash changed substantially as a result of market changes?
-
Even if it hasn't changed significantly,
does the portfolio still make sense for you, given any changes that may
have taken place in your lives?
Answering these questions will let you
determine whether you need to adjust, or rebalance, your portfolio. One
key: do these steps together. Don't abdicate this responsibility to your
mate. Sharing this task is a very practical way to stay in communication
about your mutual financial goals – and to mark your successes. |
