Millennials, marriage, money and you

If you are like me, you probably have noticed that people in our generation tend to get married at the later end of their 20s.  In fact, a Pew Research Center survey shows that only 26% of our generation is married versus 36% of Generation X when they were our age, 48% of Baby Boomers and 65% of the Silent Generation. Think about that - if you were of your grandparents' generation, 2.5 times as many of your friends would be married by now.

So where am I going with this?  Let me tell you a little story.  

My husband and I got married when I was 25 and he was 26 (just two weeks shy of 27).  A few weeks before my wedding, a relative sat me down and strongly advised me to make sure I kept all of my retirement savings separate from my future husband's "just in case", meaning don't put his name on the accounts ever.  I had a sizable amount of money for a 25 year-old in retirement accounts already, and this well-intentioned relative wanted to make sure that in the event of divorce, I would not lose a substantial portion of my retirement investments.

I knew then that this person was trying to protect me considering that divorce is not exactly rare in our society.  I also knew that my husband-to-be had almost as much as I did in retirement savings for himself.  I'll tell you what I ended up doing at the end of this post, but first, let's talk about you.   

Transient

If you aren't married (and there is a good chance you aren't... yet) then what should you do if there is a big difference in what you and your future spouse brings in finances to a marriage?  This could be a very real scenario given that you typically will have between 5 and 7 years of work experience, on average, and that much time to accumulate retirement savings.  What if you have $50,000 in retirement savings and he has $5,000?  Should you be hopeful that your marriage will be the 50% that lasts "til death do you part"?  Or should you make some financial plans to protect yourself in case you are in the other 50% that lasts "til the lawyers do you part"? 

I won't say that there is an answer that is the right one 100% of the time for 100% of cases, but when you get married, remember that two join to become one. What's yours is his; what's his is yours.  This goes for both the assets AND the debts you bring to the marriage.  I firmly believe that when you start making plans that help you keep a foot pointed towards or even out the door, you do make it easier to take the step towards divorce in hard times when you should be digging your feet in to strengthen your marriage.

So before you tie the knot, make sure that you discuss money matters, including the assets and debts you both have, during your pre-marital counseling sessions (you are planning to do those, right?).

What did I do with my relative's advice?  I never put my husband's name on my retirement account and he didn't put mine on his only because we came into the marriage with pretty much the same amount in assets.  My husband and I agreed that there was no real need to go through all the paperwork to do so as it was essentially a wash for both of us, and if either of us were ever sued and lost, we could add some protection to our assets by not putting everything in both of our names.  His retirement money is still my retirement money, and vice versa.