Once you’re married, “I do” becomes “we do.” Or, maybe more aptly, “we are.” Which means there’s a whole slew of things that will change for both of you, the least of which is your filing status with the IRS. After all, there’s a reason they say “What’s yours is mine, and what’s mine is yours.” Our advice: Take the right financial steps now, and happily-ever-after shouldn’t be a problem.
1. Determine your insurance needs
You probably already have some amount of coverage in a few different areas of life; now’s the time for both of you to dig out all those policies and do a thorough side-by-side comparison. This will tell you where you have duplicate coverage, undercoverage or perhaps no coverage at all. Specifically, you’ll want to buy or update your homeowners or renters insurance; life and disability coverage; and car insurance. Moving in together once you’re married usually means dropping one of your homeowners policies, but make sure to adjust the coverage on the one you stick with to protect your newly combined household goods (including your engagement and wedding rings). Likewise, having separate auto insurance doesn’t always make sense either, since you could combine policies and lower your payments. And buying life insurance now, when you’re young, will save you money in the long run. The simplest, most streamlined way to tackle these tasks? Turn ’em over to the pros. An insurance agent at a comprehensive company like Allstate, for example, can quickly assess your situation and help you in making decisions, which and how much insurance to buy, as well as helping you bundle existing policies.
2. Get on your spouse’s health insurance plan—or vice versa
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Health insurance is another area where it typically makes more financial sense for you to be covered under one plan. Most employer-based health plans have a limited open-enrollment period, but since getting married qualifies as a major life event, spouses can usually sign on outside this window. Like you did for your other types of insurance, compare the costs of adding your spouse to your policy, yourself to his or hers, or keeping separate policies. One employer may offer better coverage, for instance, but have higher deductibles. The other may have a lower monthly premium but hefty copayments. And if you or your partner have certain health conditions that aren’t adequately covered by either plan, you can get supplemental health insurance from Allstate.
3. Adjust tax withholdings
First order of business post-honeymoon? Email your human resources department to adjust your withholding allowances on your W-4 form (allowances tell your employer how much of your paycheck to withhold for income tax and is based in part on your marital status). Do this now to avoid any nasty surprises come April 15th, and consult an accountant on whether it’s in your best interest to file your taxes jointly or married filing separately. Also of note: In the watchful eyes of the IRS, you’re considered married for the entire calendar year of your wedding, regardless of whether the date was January 1st or December 31st, so make sure to file accordingly.
4. Update your account beneficiaries and devise a will
Here’s another reason to reacquaint yourself with your HR administrator: If you named a parent or other relative as your beneficiary on your 401(k) account or life insurance policy, you should change it to your spouse’s name instead—ASAP. Same goes for an IRA or other retirement plans. Yes, you can designate your spouse in a will—and you should—but keeping beneficiary info up to date is the best way to assure those assets make a smooth transition should a worst-case scenario happen.
5. Plan your financial future
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The couple that budgets together, stays together (seriously—money woes are often cited as reason numero uno for divorce). Get on the same page by first deciding how to blend finances: Will you each keep separate bank accounts, open a joint one or maintain a mix of both? Will you consolidate credit card and student loan debt? Will you both contribute to one retirement savings account, or juggle several? An insurance agent, like an Allstate Life and Retirement expert, can help you put priorities in place to make the most of your financial life—now and for whatever the future may bring.
The Knot and Allstate teamed up to present Take It From Me, a sponsored series featuring life lessons that couples learned from past generations, plus valuable advice to help you prepare for the future. To find a local Allstate agent who can advise you as you make big life changes, visit Allstate.com.
