Building Wealth For Young Couples

Nothing can derail a relationship like an argument about money. In fact, 44 percent of American couples in a 2021 Fidelity Investments survey said they fight about financial issues at least occasionally. Of course, the potential pitfalls when it comes to building wealth are enormous:

  • Who contributes to the couple’s expenses and how much?
  • Who saves and invests – and how much?
  • How much risk will you take with your investments?
  • Which goals will take priority?

Regardless of how you answer these questions, it’s absolutely critical that you do answer them, and that you’re in agreement with your partner on the path forward. Setting up an investing plan with your partner, and then sticking to it, are absolutely critical to building wealth.

Here are key things that you need to know if you’re looking to build wealth as a couple.

Key investing statistics for couples

  • Communication is a cornerstone of building wealth for couples, with 73 percent of those who said they communicate well rating their financial health as very good or excellent, compared to 42 percent of those saying they communicated poorly, according to a 2021 Fidelity survey.
  • Partners may “financially cheat,” with nearly one-third of respondents in a 2021 survey saying they had either spent more than a partner would be comfortable with or had a secret account, such as a credit card or checking account.
  • One in five couples says money issues are the top challenge in their relationship, according to a 2021 Fidelity survey.
  • Nearly 40 percent of adults avoid discussing financial topics with a partner, according to a 2022 survey by Personal Capital, a digital wealth manager.
  • About 51 percent of couples disagree on how much they need to retire, while 48 percent disagree on when they plan to retire, according to a 2021 Fidelity survey.
  • According to a 2021 Fidelity survey, 57 percent of couples say they make long-term and retirement decisions together.
  • For many people, strong finances are critical to a successful relationship, with 54 percent of respondents in a 2022 Personal Capital survey saying they’re “crucial.”
  • About 22 percent of women say they have little or no participation in long-term and retirement planning, according to a 2021 Fidelity survey.

How to invest as a couple

Couples have quite a few investment choices depending on what exactly they’re saving for. Many accounts can offer special tax advantages if they’re used properly, and allow you to accumulate wealth even faster. Here are some of the most typical account types:

Taxable brokerage account

A taxable brokerage account allows you to invest in potentially high-return assets such as stocks, ETFs, mutual funds, bonds and more – and it’s a great way for couples to amass wealth. Any realized earnings in the account are taxable, but smart investors buy and hold investments and pay no taxes until they sell them. Money can be added or withdrawn at any time.

A brokerage account takes about 15 minutes to open, and is easy for couples to open together.

Retirement accounts

Retirement accounts typically allow you to invest in high-return assets such as stocks or stock funds and do so on a tax-advantaged basis. That is, you can defer taxes on your contributions and earnings, and sometimes you can earn money tax-free, if you abide by the plan’s rules. The best retirement accounts are great for long-term investing, allowing you to invest in higher-risk but higher-return assets and amass a lot more money than other investment types.

Typical retirement plans include a 401(k), 403(b), 457(b), IRA and spousal IRA. For each of these accounts you’ll need earned income to participate, with the exception of the spousal IRA. In this latter case, only your spouse needs to have earned income for you to qualify. The spousal IRA can be particularly valuable, since about 25 percent of married-couple families have only one employed spouse in 2021, according to the Bureau for Labor Statistics.

Bank accounts

Bank accounts are generally taxable accounts that allow you to amass wealth using high-yield savings accounts and certificates of deposit (CDs). They’re great for short-term investments and they’re backed by the FDIC, meaning that you have no risk to your principal. So they’re good for money that you know you’re going to need at a specific point in time or as an emergency fund.

Health savings accounts

A health savings account (HSA) allows you to save for medical expenses on a tax-deductible basis, but only if you’re enrolled in a high-deductible health plan. An HSA has three tax advantages. First, any contributions are tax-free. Second, any earnings in the account are tax-free. Third, any money withdrawn and used for qualified medical expenses is tax-free.

You can invest the money in safe, low-return assets or even higher-risk, higher-return assets, depending on your plan. The money in the account rolls over from year to year, and you take the account with you when you change employers.

529 accounts

A 529 account is a great choice for funding a child’s education for couples who plan on having a child. Parents can deposit money into the account where it can grow tax-free, and any withdrawals are tax-free as long as they’re used for qualified education expenses.

While 529 plans were created to pay for a college education, they’ve been expanded to include K-12 private schools, apprenticeship programs and more. They can even be used to pay back student loans now, and unused funds can be rolled over into a Roth IRA, starting in 2024.

Pro tip

You have several investment accounts that offer you special advantages depending on your life decisions. For example, if you’re planning to have a child, it can make sense to use the special perks of a 529 plan. While you could save and invest in a bank account or taxable brokerage account, you could likely grow your wealth faster in a specially created account.

Understanding and aligning goals

To be successful, couples will need to align on their financial goals, or it could be like one person is adding water to a bucket while the other removes it. So both partners need to be sure that they’ve agreed to add to the bucket and how they’ll do so. That process involves:

  • Agreeing on the big financial goals: You’ll need to determine what you see as the important goals. Retirement wealth? General wealth? Emergency savings? Whatever you decide, you’ll want to understand which goals are the most important and which get the most funding.
  • Breaking down the goals to manageable chunks: Once you’ve established your goals, then you can break them down into achievable chunks. For example, if retirement saving is a priority, then you can decide what you will get there. That could involve a 401(k) plan, an IRA or even a regular taxable investment account, among others. You can decide how much to fund the account and then put that plan into action.
  • Agreeing who undertakes which goals: A critical part of the wealth-building plan is figuring out who does what. Do both partners contribute equally to the joint wealth? Does one contribute more than the other? And who makes the decisions to actually invest and oversee the money? And what will you invest in?

As you’re setting up your goals, remember that it may be useful to break down your financial goals by their time frame: short-, medium- and long-term.

  • Short-term goals (say, a down payment) require you to have the money relatively soon, in the next one to three years. The best short-term investments are relatively low risk and they ensure that your money is there when you need it.
  • Medium-term goals require you to have money in three to five years, and you may be able to take a little more risk with these investments. That might include investing in bond funds or perhaps a dividend stock fund.
  • Long-term goals (say, retirement or overall wealth) are best achieved by owning the best long-term investments. These kinds of investments – such as stocks and stock funds – are more volatile in the short term, but they perform better in the long term. Because the goal is long term, you can afford to ride out the higher short-term volatility in exchange for the potentially much better returns.

Other important considerations

Wealth doesn’t just happen. It requires planning and deliberate effort from both partners in a couple. Even before you start building an investing plan, you need to be aligned on your life goals because your life goals will direct your investment plan. For example, if you don’t want children, it’s not likely that you’ll want to open a 529 education savings plan.

So a helpful place to begin with your partner is determining what your life goals are:

  • Children
  • Your own home
  • Early retirement
  • New cars or other assets
  • Vacations/travel

Once you agree on the kinds of things you want to spend your money on, you can begin constructing the investment plan to help get you there.

Compromising on risk

While risk is often seen as a dirty word, it’s actually important that investors take on risk. Risky assets such as stocks or stock funds have a track record of much better performance than less risky investments such as bonds, CDs or savings accounts. In fact, the Standard & Poor’s 500 index, a collection of hundreds of America’s best companies, has returned an average of about 10 percent annually over long periods. You’ll need a high return to outpace the damaging effects of inflation. But how can couples take on an appropriate amount of risk and both sleep at night?

Here are some ways that couples can reduce their risk while still investing in higher-risk, higher-return investments:

  • Diversification: Setting up a portfolio that has a broadly diversified collection of stocks (such as an S&P 500 index fund) and other investments can reduce your risk.
  • An emergency fund: An emergency fund lets you withstand financial setbacks and importantly it allows you to stay invested in higher-performing long-term investments.
  • Joint and separate accounts: If you and your partner can’t come to an agreement on risk – and even if you can – it can make sense to have separate accounts for joint expenses and individual expenses. In this case, each partner can invest in the kind of assets they’re comfortable with.
  • A neutral financial advisor: An outside financial advisor can help you build an investing plan that meets both your needs and respects your risk tolerances.

Coming to an acceptable compromise – and of course, sticking to it – will help reduce tension between you and your partner and should help you build wealth.

Obstacles when investing as a couple

One of the biggest obstacles when building wealth as a couple is to be aligned on your goals and how you’re going to get there. According to a 2021 Fidelity survey, 31 percent of men and 19 percent of women said they were the primary decision-maker for longer-term investment planning. That dynamic could set up a situation where one partner is doing something that the other could see as detrimental to building wealth, causing a lot of tension between the two.

Other key obstacles include:

  • Too many accounts are open: If you have too many financial accounts, it can be easy to lose track of them, especially if they’re accounts that you don’t use frequently. Take a full inventory of each partner’s accounts, so that both of you know what’s open. Also, watch out for partners who “financially cheat” by having an account they keep hidden.
  • Disagreement on investment decisions: One partner may be risk-averse, while the other may want to invest in highly risky investments. You’ll need to agree and align on how to invest and who will do it, if not both of you.
  • Goals aren’t shared: Not having a shared financial goal can create serious strife in a relationship. If one person prefers to spend money, while the other wants to save, it will cause friction. So it’s important to have some shared goals as a couple even if you also have separate goals as individuals.
  • Investments aren’t diversified: To meet short-, medium- and long-term goals, you’ll need to put your investment “eggs” in more than one basket. That reduces your risk and helps protect you against downturns in the market or rising inflation.
  • Unequal incomes: Partners who earn vastly different incomes can be a source of friction when it comes to building wealth. The higher earner may feel they can do what they want with their “extra” income, while the lower earner may feel that more money should go to a joint account or that they are entitled to their partner’s money.

One of the most important ways to avoid obstacles is to be fully aligned with your partner on your wealth goals. You’ll need to align on what your goals are and what you’re going to do together to get there. That road map can also involve a strategic investment plan that lays out what you’re investing in, how much and why. It may be necessary to call in the services of an experienced financial advisor, since they can navigate typical issues for wealth-building couples.

Lifestyle considerations when investing as a couple

We all go through life stages, and it’s no different for a couple, either. What was once important for a couple may become less important over time, as priorities shift and new goals emerge. So it’s not surprising that these changes would also affect how a couple invests their money.

Some typical shifting priorities include:

  • A new job. A new job may allow you to save more for any goals, and also allows you to take better advantage of your employer’s 401(k) for retirement. With a higher-paying job, you’ll also be able to invest more in higher-return, higher-risk investments.
  • A child. A new child may create further demands on your budget, especially the ability to invest for the long term. So it can make a lot more sense to have more invested in safer investments such as CDs or high-yield savings accounts, forming the backbone of an emergency fund. Also, it can make sense to start investing in a 529 education plan.
  • A new home. If you’re thinking of becoming a homeowner in the next few years, you’ll need to start budgeting for that. You won’t be able to invest as much in long-term assets such as stocks and will likely want to invest in safe assets such as CDs and savings accounts so that the money will be there when you need it.
  • Retirement. The best way to invest for retirement is to invest early, allowing you to take full advantage of the riskier assets with the best long-term returns. But many couples wait until later – after the kids and the house – and may need to scramble to catch up.

As a couple, you’ll need to negotiate these shifting priorities and incorporate them into your investing strategy. But the best strategy regardless of your priority is to start as soon as possible. Time is your biggest ally when it comes to investing, especially when investing in assets such as stocks and stock funds that have the highest potential long-term returns.


    • Investing as a couple means that both partners should understand how the money is being invested and should take an active role in managing the money. Each partner should know the investment strategy and have a firm understanding of why the money is being invested as it is.

      Having a firm agreement at the start – in particular understanding how much risk you’re willing to take – will help eliminate arguments later on and will help you stick to your investment plan.

    • One of the best ways to begin investing is to start with retirement saving. Your employer may offer a 401(k) or 403(b) account, allowing you to save on a tax-advantaged basis and amass a nest egg even faster. Plus, many employers offer matching funds on your contribution.

      Another good option is an IRA, and it’s available to anyone who has earned income, even if their employer doesn’t offer a plan. It offers major advantages, including the potential to avoid taxes entirely on your retirement account, if you open a Roth IRA.

      Time is your biggest asset when investing, so start today, even if you have only a bit of money.

    • Couples can invest together, though not in specially designated retirement accounts such as a 401(k) or IRA. Instead, couples must open joint accounts, which are taxable. Most major online brokerages offer joint accounts, and it’s no more difficult to open one than an individual account.

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