Feb 14, 2025
Getting married is exciting, as you join your life with your new partner's. However, you do need to make smart choices about just how much of your life you should join together. Specifically, you must carefully consider how you want to handle your finances.
Since you kept your finances separate in your last marriage, it's understandable that you may want to do things differently this time around — especially if money was a point of conflict that contributed to the demise of that relationship.
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Still, while you may be eager to combine your assets with your new spouse — even comingling your $500K in retirement funds — this may be a bad idea.
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While there are benefits to combining finances, there are also some downsides — especially for a second marriage like yours, at 50, when you both have a lot of savings already.
Here's what you should think about to make your choice.
When should you combine finances and when should you keep them separate?
Combining your finances can seem like a good idea because there are advantages to doing so. For one, it can make it easier to accomplish financial goals. If you and your new spouse want to buy a new home together, for example, pooling your money could make that more affordable.
A study published in the Journal of Consumer Research also showed that when couples merge their money into a joint bank account upon getting married, it can improve the quality of their relationship in three ways:
- Improving how they feel about money management.
- Helping them align on financial goals.
- Sustaining adherence to communal norms. Meaning, it can make couples more responsive to each other's needs.
That said, however, there are also some downsides — especially if you are getting married later in life.
Since you're both coming into the marriage with more assets, there's a risk of losing a lot more of your wealth in the event of a divorce.
If you have children from outside the marriage, combining finances could also impact your ability to provide a legacy for them.
Plus, since you've been living without each other for a long time, you may be more set in your ways. Combining finances could lead to an opportunity for conflict.
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There's also the sad reality that second marriages fail at a higher rate than first marriages do. In fact, 60% of second marriages end in divorce as compared to 43% of first marriages. With this increased risk, keeping finances separate — and even using a prenup — could be smarter than combining them.
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Comingling assets the right way
If you do decide you want to combine at least some aspects of your finances, it's important to do it the right way.
First, you need to know that some accounts can't be combined.
You and your partner cannot merge your 403(b) accounts, for example, as you can't combine your retirement account with someone else's. You can name each other as beneficiaries so the other partner gets to take over the account when one dies, but you can't merge separate accounts into one.
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If you and your new spouse have separate children, you may want to keep any money or property you'd want to give them separate as well.
Beyond that, though, it's worth taking the time to think carefully about exactly what should be combined. For example, you may decide to open a joint checking account that you both put your future income into, but keep the savings accounts you came into the marriage with separate.
Or, you may decide to have a joint checking account for shared expenses, but keep your spending money in separate accounts.
The key is to:
- Think about your money goals and how combining some assets can help support those goals.
- Make sure you can talk openly about money, and are on the same page before combining anything.
- Take steps to protect yourself in the event the marriage isn't successful. Rather than making a home you owned before marriage the marital property, contribute 50% each to a new home.
By having open conversations and really thinking about the best way to merge finances to strengthen your marriage, you can hopefully succeed in finding a way to handle money that works best for both of you.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
