By Jason Silverberg, CLU

Back in 1970, about 40% of households were deemed to contain “nuclear families,” with a father, mother, and children, all under the same roof (Marriages, Families & Intimate Relationships~2005). Since then, our country has made a dramatic shift. Divorce rates are on the rise, people are waiting longer to get married and have children, if at all, and we are now at the tipping point for having same sex marriages legalized in numerous states. The traditional way of creating a family, now accounts for only about 24% of U.S. households. What does this mean for your personal financial situation? Well, it means that the traditional ways of financial preparation will no longer work for the majority of households.  Below are a few of the categories that you may fall into with helpful tips depending on your specific situation.

Divorcees

For a family that has been broken apart by a divorce, make sure that you and your ex-spouse still communicate about money if kids are in the picture. Just because you divorce each other should not mean you are divorcing your kids too. Figure out how you both will share expenses. Still plan for college expenses together, don’t ignore it. Also, make sure that you still retain appropriate amounts of life insurance. The death benefit provides financial security for your children regardless of your marital situation. You should consult with your attorney for information regarding how your life insurance is viewed as an asset.

The Late Bloomer

In our society, people really start to take a look at their financial situation and identify goals when then get married. It’s a turning point in one’s life, when we typically transform from a young adult to a responsible adult. Since people are waiting longer and longer to get married, they are delaying their financial preparation.

When it comes to saving for retirement, one of the biggest concepts that you want to take advantage of is compound interest. In order to maximize your opportunities, it’s beneficial to start saving early. Let’s take a hypothetical example for illustrative purposes, if you began saving for retirement at age 25 at $200 per month and a 7% rate of return, you would have over $1,000 more per month in retirement income than you would if you began saving 5 years later at age 30. And that’s just saving $200 per month (including 401(k)s as well as IRAs).

Also, many people wait to begin looking at life insurance and disability insurance until they get married. Interestingly enough, costs rise as you get older. Buy a permanent life insurance plan while you’re young and healthy. This way, by the time you get married, you will have locked in your premiums at lower rates and maybe built up some cash value in the policy too. You should keep in mind that there are fees and expenses associated with insurance products. For life insurance there are charges such as mortality and expense and there may be restrictions such as a surrender period. 

DINKs

The term DINK has been popularized lately. Families with Double Incomes with No Kids have a different set of financial issues as well. For couples who decide they don’t want to have kids, planning for retirement and the disposition of assets can get quite creative. Since the presumption is that you will not pass your wealth to your next generation, many times assets are given to nieces and nephews. This is also a great opportunity to select your favorite charity to help fund.

Be careful not to overlook planning for each other either. Just because you don’t have any kids doesn’t mean life or disability insurances should be taken for granted. If a combined household income can afford a certain lifestyle, if something happens to one of you and your income earning potential is lost, that same lifestyle may not be achieved.

Same Sex Couples

It’s a common fact that our country compensates men more than women for the exact same job. The Bureau of Labor Statistics says that women tend to make $.77 for every $1.00 made by a man. Because of this, there are some interesting things to consider when looking at same sex couples. Lesbian couples must stash away more of a percentage of their salary than do Gay couples. Also, depending on the state, same sex couples may not be afforded the same rights as are heterosexual married couples. The law considers you strangers and because of that, gifting laws come into play. In 2009, you may gift up to $13,000 of assets per year. Furthermore, make sure your wills are properly updated to reflect your wishes. These same rules apply to unmarried couples too, so watch plan in advance.

If you and your family fall into one of the above categories, you are now in the country’s majority and traditional financial advice cannot be digested the same. Make sure you sit down with a professional who can learn more about who you are and how to help you achieve your financial dreams.

“The times, they are a-changing” ~ Bob Dylan

For more information, please contact Jason Silverberg directly at Jason@finadvinc.com.

Jason is a Registered Representative and Investment Advisor Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC.