Building a Strong Financial Partnership: Navigating Joint Finances and Retirement Planning

Navigating the financial landscape of marriage can be a complex journey, especially as Valentine's Day encourages reflections on partnerships. Join me, Stacey Hyde, as I recount my own experiences of merging finances with my husband during our early years, a decision that, though initially driven by necessity, proved to be an invaluable cornerstone for our financial success. This episode tackles the delicate dance between maintaining separate accounts and ensuring both partners have necessary access in critical times. Hear the real-life stories and lessons learned that highlight the importance of joint financial planning and preparedness.

As we unravel the intricate web of transitioning into retirement, I stress the necessity of re-evaluating financial strategies and ensuring seamless access for both partners. Through relatable anecdotes, including the struggles faced by a friend in the midst of her husband's health crisis, I emphasize the need for proactive measures like joint account ownership or Transfer on Death designations. Whether you're just starting out or approaching retirement, this discussion offers essential insights to help you and your partner achieve a stress-free and harmonious financial future. Tune in and empower your partnership with practical knowledge and foresight.

Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis, TN 38137. (901) 422-7526. This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Transcript

Speaker 1: 0:00

Hi, this is Stacey Hyde and we're back for another episode of Better Financial Health in 15 Minutes or Less. And as Valentine's Day approaches, I would like to talk about something that often comes up in meetings and you know, my husband and I have always had a joint checking account. We really didn't have much choice because when we got married I was the only income. He was in school, so that caused us to kind of merge our finances and move forward. But that's not the norm. As I talk to our clients and as I talk to my friends, it's much more common to have kind of two separate accounts and then some sort of division of bills that make sense for both members of the couple, sort of division of bills that make sense for both members of the couple. But I would say this that's fine to have those separate accounts, but particularly if you are legally married, I would really really encourage you to make sure that the other spouse is on that bank account, because if that spouse other spouse is not on that bank account, because if that spouse other spouse is not on that bank account and something happens to that spouse, either they get sick and they're in the hospital or they pass away. That surviving spouse is not going to immediately have access, that it's going to get locked down. The bank or the investment company is going to lock that down. The bank or the investment company is going to lock that down and they will not be able to access that, which can be a problem if there's bills to pay, such as hospital bills, doctor bills, funeral costs or just regular operating expenses of the household. So there's two ways to go about it. The easiest way is to just add the other spouse as an owner. They don't have to show up on the checks, they can just have the one person's name on it. But as long as they're on the account, if something were to happen it would automatically pass to them. The other option and it's a little bit slower, it's not quite as seamless and it only works if they've passed away is you do a TOD or transfer on death, so that the surviving spouse or the surviving partner just has to show up with the death certificate and then they get access. Where that falls apart is if someone has had a stroke or some other health event and can no longer manage their own affairs. If that spouse is not on that account, they're likely going to have to go get a conservatorship or something like that, unless that spouse has a power of attorney. Even then, some banks can be awful about it.

Speaker 1: 2:51

I had a dear friend whose husband had a pretty severe health issue still suffering from it, and she had to take over his account stuff, his account stuff. The problem that she had was the bank. They had some fraud on his account because he was in a rehab hospital and they stole his identity, which is awful. But she was trying to get a new account set up and they wouldn't do it because he couldn't sign. She's like I have power of attorney and they said, well, he has to come in. She's like I have power of attorney and they said, well, he has to come in. She's like what part of he's in a rehab hospital, do you not understand? So she wound up opening an online account for him, a joint account, and everything was fine. But she still had to go through that and it was a much bigger pain than if she'd been on the account to begin with, because then she could have just done taken it, signed it, taken to Tim, gotten him to sign it and brought it back. But since it was just in his name, it made it much more complicated.

Speaker 1: 3:53

So there's things like that that I think people need to pay attention to and also, once people are retired, the sources of income that are going to come in, because a lot of times when people go throughout their working career, you know one spouse usually earns more than the other, so they're paying more bills, and then you have this other spouse that's taking care of some of this, and once the incomes stop and they're dealing with retirement hopefully, you know their mortgage is paid off, they may have a car payment or some stuff like that, but it's more about joint expenses and joint lives, and so it makes more sense to maybe consolidate accounts or at least make sure everybody's on everybody's accounts so that the cash flow makes sense as they go throughout retirement. So just some kind of things to think about from a valentine standpoint of, you know, love and money those are the two things people fight about most. Actually, the number one thing is money, so it can really help. And then one little quick tip I want to offer is if, as you're going through this and you're looking at it and you look and man, I can't believe we spent so much on X whatever X is, whether it's eating out that seems to be a big problem for a lot of folks or maybe it's stopping at a convenience store to buy energy drinks.

Speaker 1: 5:21

Whatever it is, if you're spending more in an area than you were aware or just kind of makes you go. If I just could reduce that by 25%, I'd have so much more money. The easiest way to do that is to start paying cash for that. Give yourself an envelope every week or every month with the cash that you've said. Okay, this is what I'm willing to spend on this.

Speaker 1: 5:48

If it's eating out, it'll get much easier to go to the grocery store. If the issue is stopping and buying energy drinks at the convenience store, it'll be much easier to go to the grocery store, to Walmart, buy it in bulk and pull it out of the refrigerator on your way out the door. So just some ways to think about it. We just pay more attention to cash. It's so easy to swipe a card, put in a pen, whatever, but I would encourage you, if there's some spending that you're like I'm bad about that, use cash. It's a great way to kind of reign that in. So thanks so much for tuning in. This has been another episode of Better Financial Health in 15 minutes or less.