Know your roles and habits so you can plan wisely
Love isn’t always about practical commonalities, and that’s why you may have heard about spender/saver marriages before now. It sounds idyllic to be married to someone who has exactly the same ideas about spending and saving, doesn’t it? But the fact is, if you don’t discuss these kinds of ideas early on, you won’t know how to manage your differences until you’re already married. Especially when your ideas and habits aren’t congruent, good planning can help you come up with a workable plan.
Forget the registry and venue; focus on your joint investments
It’s so easy to get swept away in planning and spending too much on the wedding—and to end up in debt as a result. Instead, take some time focusing on the joint investments you’ll be able to enjoy once you’re married or partnered up.
Couples should think about the benefits of a joint-first to die policy as part of their estate planning. This is available under permanent plans and it not only covers two lives by paying a benefit after the first spouse passes, it also gives the surviving partner the option to convert within sixty days to a new policy without needing to provide evidence of insurability. Term life insurance policies are a great option for young newlyweds who are thinking about buying homes or starting families. This can provide a ‘safety net’ for a set period of time when there are a lot of expenditures to cover. And of course there is also permanent /whole life policies where the premiums are lower the younger and healthier you are when purchasing this type of plan. So whether it’s better to think Term or Permanent coverage, have these talks now.
If one of you has employee benefits, the other can be added below market cost easily. If both of you has benefits, compare the plans based on costs and features to find out how to make the most of the situation.
There are also numerous tax benefits married couples can take advantage of that engaged couples should explore. Spousal RRSPs, for example, allow a spouse with higher income to contribute to the retirement account of the lower-earning spouse for a tax benefit. Tax credits for things like medical and school expenses or charitable donations can also be transferred between spouses.
Finally, as couples get ready to move forward into their new life together, they need to update their beneficiaries on pension plans, insurance policies, and other accounts. As younger singles we often choose siblings or parents as beneficiaries, and marriage doesn’t change our choices automatically. In fact, although many of us believe that once we are married and have a will our beneficiary designations no long matter, in most cases those designations will take precedent over any will.
Beware of marrying debt
Love is blind and, hopefully, doesn’t come with a price tag attached. Even so, it is critical to have an honest discussion about debt with your significant other before marriage. Marrying someone with serious debt is a major life decision that can follow you for decades; you need all the facts to make your choice an informed one.
Conclusion
When two people come together with the intention of becoming one it’s an amazing and wonderful thing—for the most part. But as you move forward and think about purchasing a home, perhaps starting a family, and what all of this means for you financially, remember that marriage involves so much more than inheriting a few pieces of furniture and some quirky in-laws. It can also mean anything from gaining great benefits to navigating years of your partner’s debt.
If you’d like to learn more about how life insurance plays a part in this union, contact your life insurance advisor or Canada Protection Plan 1-877-851-9090.
