Discussing Investments With Your Spouse or Partner

How do you go about finding a strategy for two?

A night on the town and you’re both hungry. Suppose you like Mexican food, and your spouse or partner likes French. You settle for Italian. Or you go for something entirely different. The important thing is you talk about it and mutually agree on where to dine.

An infographic that asks have you had the investment talk with your spouse or partner? You may think you see eye to eye when it comes to your financial future, but are you sure?

The same goes for your investment strategy. You’ll want to discuss how you’ll invest your hard-earned money to support your goals. You may even have different ideas about your investment objectives to begin with.

A conversation that counts

Make it a priority to have this conversation with your spouse or partner. It’s a biggie – quite a bit more important, in fact, than where to eat today or which car to buy tomorrow. After all, it’s your financial future you’re investing in.

Before you put together an investment plan, you’ll want to discuss the financial goals behind it. This discussion – more likely a series of discussions or dinner dates – may even require a little homework at times.

Size up your goals and dreams

Start by talking about the events, family milestones, and dreams you both look forward to and agree on. What does your ideal future look like? What compromises, if any, would be acceptable to you both if your ideal scenario isn’t within reach?

Try to arrive at a ballpark estimate of what your future will cost and how much you hope to save by various points in time – say, by age 55 and again by age 65. Here are some planning points to discuss:

  • Will college funding for children likely play into your pre-retirement investing years? To what level would you want to support their education?
  • Where do you see yourselves living in retirement? Do you hope to maintain your current lifestyle?
  • What do you see yourself doing 10, 20, and 30 years down the road?
  • What do you most want to do that you haven’t done yet? What else?
  • How much of an estate or legacy do you hope to leave loved ones?

With answers to these and other questions in the open with your spouse or partner, you’re on your way to aligning your financial needs and goals with a viable investment strategy. Once you’ve talked through your goals and intentions for the future, you’ll be more prepared to direct your attention to other investment considerations like risk and your time horizon.

Factor in risk

Risk tolerance, the amount of volatility in your portfolio’s value that you’re comfortable with, plays a part in every investment strategy.

Is one of you cautious and careful, perhaps more inclined to favor conservative investments? Maybe you’re a bold and brazen risk-taker who’d prefer a more aggressive approach? Or are you somewhere in between? Finding the right risk level for your circumstances is a very important component in the planning process.

Is time on your side?

Time is also of the essence for investors.

The number of years you have to let your portfolio work in the markets – also known as your investment horizon – will help you or your investment professional choose investments appropriate for your needs and circumstances.

Generally, the time you have may affect your ability to take on additional risk in exchange for higher growth potential or to recover from any losses along the way. Less time in the markets could necessitate playing it more conservatively.

Meeting of the minds

Even if you’ve made it this far and have the same end goals in mind, you may still find it necessary to compromise now and again. You could find yourselves on opposite sides of the risk-tolerance spectrum, for instance, or at odds over the particular types of securities or funds to include in your portfolio.

But it’s worth whatever time and effort it takes to get to yes. Having a conversation about planning and investing could significantly enhance your financial landscape.

Next steps

  • Make an appointment with a Financial Advisor for you and your partner or spouse to sit down and look at your finances.
  • Look at your latest budget together.
  • Write down your goals for several key points in the future.

This article has been created for informational purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any planning or trading strategy. Investing involves risk including the possible loss of principal. Since each person’s situation is different you should review your specific investment objectives, risk tolerance and liquidity needs with your financial professional(s) before selecting a suitable savings or investment strategy.