“They should plan to live off Eric’s salary and set aside a large portion of the $65,000 Antoinette believes she can get for retirement savings,†says Wright. Furthermore, Patrick is contributing about $5,000 of his yearly income to his 401(k), and does receive the company match, but Wright wants to see him gradually increase the percentage he saves as his salary increases, eventually reaching the maximum contribution, which is $17,000 for 2012. Patrick should continue to live off his old salary, says Wright.
Even though Haile has a contract position, she can set up a Roth IRA and put away as little as $25 to $50 a month that she can build on later. “Just because she’s not working full time, there’s no reason to get behind the game,†says Wright.
Patrick’s 401(k) currently has 72% allocated in stocks, but Wright says that someone his age could be more aggressive with his allocation, having 80% or 90% in equities and taking down the equity exposure as he nears retirement. “He has enough time to withstand and recover from any downsides, but he can’t keep that there forever,†Wright says.
– Couple finances. Merging finances is more art than science. “Once they create a joint account, there’s no cut and dry rule as to who should pay what. It’s what they agree on. It’s probably a good idea that they also keep separate accounts so they don’t have to ask permission when they want to spend fun money,†says Wright, who says she lets couples choose a plan that will work best for them. Whatever they decide, they need to be sure to always discuss big-ticket items, she says.
– Shore up savings. Wright says she would like to see them save the $40,000 they are aiming at. Not only would it cover their share of wedding costs, but with household expenses of $4,000 a month, they would also have six months of expenses ($24,000) for emergencies, and a chunk of money to put toward a down payment.
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