Once the wedding festivities are over, life begins in earnest for newlyweds. In order to ensure that your new life together remains carefree from a financial point of view too, you need to calmly assess your asset and pension situation. What will be different for you as individuals and how can you as a twosome shape your future in a self-determined way? The following eight tips should help you in your new phase of life.
1. Take out life insurance
It's the last thing you want to think about when you've just found your partner for life. But life insurance is of vital importance in the event of illness, accident or death. It provides financial security for your spouse and any children you might have so that they can continue to bear the costs of maintenance and home ownership if the worst comes to the worst. Endowment insurance is also suitable as a solid savings investment which will be paid out to you even if the three above-mentioned risk factors don't occur. What’s more, the payments you make into personal provision scheme will be tax-privileged.
2. Protect yourself in the event of incapacity to work
Marriage doesn’t always mean starting a family. But if children do come along, there's usually just one main bread-winner for a while after. If that person becomes incapacitated, the resulting financial shortfalls can impact seriously on family life. In principle, a distinction is made as to whether the incapacity to work is due to an accident or illness. While, in addition to the first pillar, mandatory accident insurance covers around 90% of the previous salary (up to a certain salary limit) in the event of total incapacity to work, just 60% of income will on average be covered by the 1st and 2nd pillars in the event of illness. Many people are not aware of the fact that, statistically speaking, illness is the cause of incapacity to work far more often than accidents. If you take out the right policy, you will be provided for in both cases.
3. Review your retirement provisions
Most married couples hope to grow old together. To spare yourself financial worries when you retire, you should assess your pension prospects while you're still young. Your overall pension will comprise the amounts you receive from the first two pillars plus any private provisions you make for yourself. If one partner earns significantly less than the other, or if one of you works part-time, you might want to talk about compensating for this. That can be done, for example, by arranging supplementary retirement provisions, for which various options are available. Swiss Life will help you find a solution that suits you.
4. Combine your household contents and liability insurance policies
Most married couples will share the same household contents. There will then be no reason to maintain two household contents and liability insurance policies. Married couples have significant advantages over unmarried couples here, as contract termination will be arranged between the individual insurance companies and will not entail any fees. All you have to do is decide which policy you want to keep. Having just one household contents and liability insurance policy is not only cheaper but will save time when handling claims. With regard to household contents insurance, it’s also vital to update the sum insured so that the actual current value of your property is covered and to avoid any underinsurance in the event of a claim.
5. Adjust your legal protection
As with household contents and liability insurance, spouses can share a single legal protection insurance policy. However, this means changing the policy to the "family" type so that both partners as well as any children are covered. This makes living together cheaper and simpler.
6. Define account ownership
Mine? Yours? Ours? Disagreements about money can ruin a marriage. It's better to talk about how to organise finances before the wedding, especially if income levels are very different.
There are various solutions here:
- Shared life, separate accounts: However much they trust each other, many married couples feel most comfortable with this solution. Planned expenses are discussed together and fixed costs distributed fairly.
- The classic one-account solution: This is ideal for married couples with a clear division of roles between job and family. A second account makes little sense if the partner concerned is not earning very much. In that case, you're best off taking a relaxed approach to the difference in income levels.
- Three bank accounts: A good mix of togetherness and financial independence. The married couple's joint account is used to pay for fixed costs, while each partner’s private account is used for personal hobbies and other such non-essential outlays.
7. Save taxes
When people get married, two sources of income are merged into one from a tax point of view. Depending on their salary and employment status, married couples can make good use of this fact. The calculations look quite different for self-employed people compared with employees. That's reason enough to have an expert assess the situation in order to optimise taxes where necessary. Savings can be made, for example, by paying into pillar 3a by way of private savings and pension investments.
8. Re-register motor insurance
If both spouses bring their own car with them into the marriage, they have to change their documents after the wedding ceremony. If the partner travels more often than the owner, this can lead to complications in the event of a claim. It is better to ask the motor insurance company directly about the exact insurance conditions for married couples and to provide very accurate and reliable information about the use of the respective car.
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