12 investment mistakes couples make |
| By Dana Dratch • Bankrate.com |
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If two heads are better than one, do couples have an advantage when it comes to investing?
The reality is that it's difficult enough for two people to share a closet, much less money styles, financial
priorities and investing strategies.
As a result, there are a number of couple-related
investing errors that planners and attorneys see again and again.
1. Too many accounts
With a lot of couples, investment accounts
are spread over a number of banks, brokerage houses and financial institutions.
Result: "It's a little out of control," says Karen
Altfest, vice president of New York-based L.J. Altfest & Co. "It's
too much for most people to handle."
Andrew Tignanelli, CPA, CFP and president of Financial Consulate Inc., in Baltimore, sees this often when only
one spouse is managing the investments. "What happens to your spouse
if you're not around, and you have money in seven or eight places?"
he says.
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| Investing mistakes couples make |
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When he poses that question to couples, either the
light finally dawns or one spouse produces a notebook with directions
on where all the money is located, he says.
Still, for a partner who is not used to dealing with
investments, going on a financial scavenger hunt is going to be
a hassle, says Tignanelli. A better alternative: Consolidate investment
accounts in one location, he says.
2. One spouse deals with the money manager and investment advisers
Both
parties need to develop and maintain a relationship with any and all the family's financial advisers, says Tignanelli. If something
happens to one, the surviving partner will need a working relationship and sense of trust to manage those investments effectively.
If you're the one who normally handles the investing, try inviting your significant other to sit in, says Altfest.
If you're the one who doesn't normally get involved, this can be a good way to get your feet wet.
3. Not putting
enough aside for retirement
The goal: 10 percent of your
take-home pay, says David Bendix, CPA, CFP and president of the
Bendix Financial Group in Garden City, N.Y.
But that amount "will vary depending on people's situations," he says. Another glitch Bendix sees: "They're not starting
early enough."
4. Too much money tied up in cash
For long-term goals like retirement,
many couples have "too much cash and too much in bonds" or other low-return vehicles, says Bendix.
Everyone has a different risk tolerance, though. Sit down with a financial adviser who can help draft an allocation
plan that will meet your comfort level and needs, he says.
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