Curating you and your partner’s financial future

By Janice Roberts
Editor
Tips from Mandy Porter of Alexander Forbes on planning a financial future for your partner and yourself

“It’s important that both partners are fully informed and aware of your household’s financial plan so that you can both work towards reaching your financial goals together,” says Mandy Porter, senior financial planner with Alexander Forbes Financial Planning Consultants.

Building a life with a partner means bringing to reality the future you imagined for yourselves. But this cannot happen automatically, it takes dedication and planning.

Part of this vision is the financial future you want for your family.

“Planning your finances together creates areas of opportunity, joint focus and responsibility for your family’s future growth. It’s important that both partners are fully informed and aware of your household’s financial plan so that you can both work towards reaching your financial goals together,” says Mandy Porter, senior financial planner with Alexander Forbes Financial Planning Consultants.

“Careful planning and regular communication about your plan can help you achieve long-term financial success together in retirement.”

Here are some tips from Mandy about the conversations you and your partner should be having:

  1. Have the conversation

Talk to your partner about your shared dreams, aspirations and goals for retirement. Then assess your current financial situation together to help define your goals and make them a reality. A marriage or long-term relationship is a commitment – a relationship built on trust and mutual respect, but it is also a business relationship that has legal ramifications if things turn sour or life takes an unexpected turn.

It’s therefore well within the rights of each spouse to know their partner’s financial position. Just as you would work as a team in business, so you should in a marriage or committed relationship. While financial goals may be different for each partner, each goal can be included in the overall financial plan. Whatever these personal goals may be (for example travel, a holiday house, a new car), it is critical to draw up a budget together so that there is common understanding of goals, income and expenditure.

Ask each other questions such as:

■  Where do you see us living in our retirement years?

■  What are our goals to support our children in studying or training towards a career?

■  How often should we go on holiday, and where should we plan to go?

Once you’ve had an honest conversation with your partner about what matters most to you both, you can create a budget and a realistic financial plan to help you meet your goals.

  1. Risks retired couples face

As partners in life, you’ll share possible risks during your retirement years that you should plan ahead for. One of the most common risks you face is that you could live longer than expected and run out of retirement savings, if you have not saved enough over the long term. Current trends show that women are likely to outlive their spouse by up to 10 years.

It’s important for both partners to be involved at every stage of financial planning to know what investments, savings, accounts and life cover you have as a couple. Make sure you know where your spouse keeps their will and update both wills regularly, especially if there are any major life changes. Ideally you should review your will every 18 months.

Healthcare is fast becoming one of the highest costs in a household budget – keep this in mind in your joint financial plan so that you have the right medical aid for your unique needs as a couple.

You could also be taking care of your children financially when you’re retired – this could have an impact on your retirement goals and expectations in your budget. Continually review your budget to make sure that your expenses don’t erode your retirement savings. Once you’ve reviewed your budget, you can adjust your goals accordingly.

Don’t forget about inflation in your plan. This is often one of the biggest risks retired couples face, along with persistently low returns in volatile markets and low interest rates. It is important to have an investment strategy that suits your needs and life stage.

“Ultimately, as a couple, you need to develop a strategy and stick to it, maintain an acceptable level of risk in your financial plan, and don’t forget to factor in some fun along the way,” concludes Porter.

Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za