Beware! Financial Pitfalls of Living Together

July 12, 2011

There are many ways to describe an unmarried committed relationship. Some of the ones that I’ve heard over the years are: ‘living in sin’, cohabitating, shacking up, domestic partnership, civil union and living together. In fact the US census bureau has recently come out with new data that shows that the number of couples living together has recently risen by 13% nationwide[1] . Southern states are leading the way with the largest percentage increase in cohabitating couples from 2009-2010.

I don’t know if this change is driven by the current economy, unemployment, baby boomer children who have seen what divorce can do to a family and won’t marry, commitment phobia or just a willingness to report cohabitation when surveyed by a government agency. All moral judgment and any speculation as to the reasons for increased in cohabitation aside, living together presents some really serious financial challenges that many of us in an unmarried union may simply be taking for granted.

If you are living with someone in a committed relationship, did you know that?

  • Social Security provides no spousal benefits to an unmarried partner
  • Health care benefits paid for by an unmarried partner are taxable income to the recipient
  • There is no divorce court for unmarried couples
  • If unmarried, your property does not pass to your partner like it would if you were married
  • There are no uniform legal guidelines for dividing your shared property if your relationship ends

In fact,  whether we are talking about a same-sex couple or an opposite-sex couple in states where cohabitating unions are not recognized or governed by law[2], several aspects of your  financial lives should be carefully considered to avoid common pitfalls. Financial areas that unmarried couples need to pay particular attention to are:

  • Insurance planning
  • Naming beneficiaries including: 401ks, IRAs, SEPs, insurance policies, annuities etc.
  • Titling of financial/bank accounts and property
  • Health Insurance
  • End of life planning with powers of attorney, health care powers of attorney, trusts and insurance

As more adult couples choose to cohabitate, in the absence of the protections given by law to married couples, unmarried couples should  meet with financial and legal professionals who understand how to best provide for unmarried partners financial and legal needs.

 Remember that: privileges given to married couples do not necessarily apply to couples in non-legally recognized relationships.

 [1]Survey data from January 2009 to July 2010 US Census Bureau and ACS (American Community Survey)Working Paper on the Change in Cohabiting Couples from 2009 to 2010.

[2] Currently the states of New York, Vermont, New Hampshire, Connecticut, Massachusetts, Iowa and the District of Colombia allow same-sex marriage. Seven additional states allow for domestic partnerships and civil unions.

About Jane Nowak, CFP® – MoneyGal2020

Jane Nowak, CFP® is a Financial Planner who specializes on AT&T retirement and benefit plans and on Women’s Retirement and Financial Planning for Women. Located in NW Atlanta suburbs Jane’s goal is to educate and empower her clients to take control of their daily finances so they can fully fund their retirement dreams and needs. Jane has recently had articles published or has been quoted in articles published online at  NASDAQ,, Fox Business News, Smart Money Chicks, and Financial Planning Association websites.

Securities offered through Triad Advisors, Inc. Member, FINRA/SIPC


Women Must Invest their Retirement Savings

July 9, 2010


Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.
~Will Rogers

All kidding aside, I know that investing can be risky. But, Will Roger’s solution will not work for us. I just some alarming statistics about women and investing.  Only 25% of the women surveyed buy and sell stocks or mutual funds. And, only 48% of women will be relying on their investments for retirement!

So, ladies in the 75% and 52%, are you planning to rely solely on social security to fund your retirement?

Let me disabuse you of that notion. The average social security retirement benefit for those who retired in 2009 is $1153 per month. Just ask yourself what your current monthly budget is. Then answer the question, can or do you want to live on the monthly amount that Social Security alone will provide you for the rest of your life? For most of us the answer will be  a resounding, no! 

If you have worked for several years already, you will be able to calculate your current retirement benefit.  You can check your retirement benefit at:

 In fact, if you are older than 25, the SSA is already sending you a retirement benefit summary every year. The summary is sent 3 months before your birthday. Review your benefit information. Save this information with your financial paperwork .

The 1/3rd

The reality is that Social Security realistically may only give you up to 1/3 rd of your retirement income. -Of course, this may change (for the worse) as the baby boomers (r)age through the Social Security system.

 The other 2/3rds

  1.  401(k)s, IRAs, SEPs, 404(b) s, etc. are supposed to give us another 1/3rd.
  2. And, our personal savings are supposed to give us the final 1/3rd.

Ladies it is past time for you to trade in your piggy banks for stocks, bonds, mutual funds or ETFs. The only way to keep up with inflation is to invest your money. 

Your goal is to maintain or better your spending power by beating inflation. Even if you don’t have much saved, consider the riskiness of not investing. We are responsible for providing 2/3rds of our own retirement income. Long term investing is the way to grow your money.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Follow Jane on Twitter at:

‘Retirementology’ book review: Why Americans fail at saving –

June 29, 2010

‘Retirementology’ book review: Why Americans fail at saving –

via ‘Retirementology’ book review: Why Americans fail at saving –

Excerpt from the article:

Many of us are making classic mistakes in the way we invest, spend, save, borrow and earn money.

Five of the greatest gaffes:

•We buy into the “red zone” hype. Salsbury dings the financial-services business for pushing the “retirement red zone” concept — a period starting just five years before retirement and ending five years into retirement.

“Millions of Boomers may be seeing red, but there is no zone in sight,” Salsbury says.

•We fall numb by “the number.” Another financial-services bogeyman is “the number” — the amount you supposedly need to comfortably retire. Salsbury maintains that nobody really knows what that number is.

•We’re not logical when it comes to saving for retirement. Americans worry about not having enough money to retire, yet fail to take advantage of savings programs available to them, Salsbury says.

A striking 70% of Gen Y workers don’t participate in employer-sponsored accounts, and more than 20% of workers 45 and older have stopped contributing to their 401(k)s.

•We’re nearsighted about investing. Behavioral economists call this “the recency effect.” You notice your mutual fund has soared in value over the past quarter or two, so you overload your portfolio with stocks. Or, after watching your stock holdings plummet, as in 2008, you go ultra-conservative and bulk up on money-market accounts.

•We pull money out of retirement savings before retiring. Salsbury says 46% of people cash out of their 401(k)s when changing jobs, rather than rolling the money over into another tax-deferred retirement plan.

‘Planning for retirement is more like a 50-year project than a 10-year project’

Shared by: Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Follow Jane on Twitter at:

%d bloggers like this: