Why Save for Retirement When You're Newly Married?
Planning and paying for a wedding can take up a lot of your time and financial resources, but it's also important to keep your long-term savings goals in mind during this transitional period of your life. Combining two households may require adjustments to your financial habits, but you may also find greater opportunities to save for retirement. Chances are, you and your future spouse have slightly different spending and savings priorities, which should be discussed prior to the wedding. If you're asking why save for retirement when you're just getting started in a new life together, here are some reasons to stick with a budget and continue reaching toward your financial goals.
The Wedding Windfall
According to Tendr, the average monetary gift given at a wedding is $160. With this in mind, many young couples may not worry about overspending on everything from the reception to the honeymoon, perhaps with the plan of using monetary wedding gifts to help cover future expenses. But if you stick to a manageable wedding budget, financial gifts can then be put toward purchases needed to help start your life together, like a new car, furniture, or a down payment on a house. You may also want to save a portion of your wedding gifts and open a retirement account together. Given the investment time frame of perhaps thirty years or more, this lump-sum addition to your savings could make a sizable impact in the years to come.
Combined Incomes Makes it Easier to Save for Retirement
For the first time, you'll be combining your income with another person, and working together to cover household expenses. Some line items in your budget, like home insurance or utility bills, probably won't change much when you go from a one-person household to two. You may also get a financial break when paying for benefits like health or dental insurance if one of your employers offers less expensive coverage to married partners. Your newly combined household may lead to opportunities to increase the percentage of income you divert to savings and help you build your retirement accounts when you have a longer investment horizon.
Save Early, Before Life Gets More Expensive
While you may have a combined household income as newlyweds, remember that life will probably get more expensive. As a married couple, you may still indulge in weeknight takeout dinners and social gatherings with friends. But eventually, if and when kids enter the picture, your lifestyle will change once more. You may need a larger home, a larger car, and eventually, when little kids grow into big kids, your grocery bills may increase as well. Planning ahead for these changes and building your savings early in your marriage can help you through these changes when they happen. Any extra money you can invest when it's just the two of you will help build your retirement balances earlier in your married life, in the event that you may need to spend more in the future.
If you or your partner is asking why save for retirement when you're only just starting your life together, take the opportunity to sit down and discuss your combined finances. Everyone brings their own financial sensibilities to a new marriage and it may take some time to sort through and prioritize spending versus saving goals for your family. If you'd like additional advice, speak to a financial advisor. Any time your financial situation changes, it's a good idea to sit down with an expert, review your budget, and make sure you're still on track with your retirement savings goals.