Finding the Right Financial Fit: How Do Couples Split Finances?

Admin • April 19, 2024

Being in a devoted relationship means blending your lives in more ways than one, not just emotionally, but also navigating complex processes such as combining your finances. How do you and your partner want to manage money together? There’s no one-size-fits-all solution, but most modern couples settle on one of a few common approaches to sharing or combining finances.

Deciding how to handle money as a couple is a personal decision without any objectively “right” answer. It depends on your values, goals, circumstances, and what works best for your situation. The most important things are to communicate openly and honestly about it, get on the same page, and revisit the topic regularly as your life evolves.

How Do Couples Split Finances?

If you’re wondering how to manage money as a couple, check out five common ways modern couples are structuring their finances:

1. Merging Finances Completely 

Some couples go all-in and completely combine their finances into one joint pot. They share bank accounts, investments, assets, and debts equally. All income goes into the joint accounts, and all expenses are paid out of the joint accounts. There is no delineation of “my money” and “your money” — it is 100% “our money.”

This is the most traditional approach couples take to their finances. A 2022 study by Creditcards.com found that 43% of couples who are married or living together combine their money. 

The combined approach promotes full financial partnership and can simplify money management. However, it does require a very high level of mutual trust, communication, and alignment on financial values and goals. It may be an easier transition for married couples.

2. Keeping Finances Separate 

At the other end of the spectrum, some couples keep their finances separate throughout the relationship. They maintain individual bank accounts, investment accounts, etc., and have no jointly owned accounts or assets. Income and expenses are accounted for individually. The same Creditcards.com poll found that 23% of couples have completely separate accounts.

Keeping finances totally separate allows each partner to maintain their full financial autonomy and avoids the intermingling of assets. It can work well for couples with complex financial situations or very different spending habits/philosophies. However, it may not allow for easy sharing of expenses, saving towards joint goals, or a true partnership mindset around money.

3. Combining Some Finances and Keeping Others Separate 

Most couples (57%) land somewhere in the middle and partially combine their finances. Common setups include:

  • Maintaining separate personal checking/saving accounts but also a joint account for household expenses
  • Keeping investment/retirement accounts separate but sharing a joint checking account
  • Paying specific bills jointly and other bills individually

This hybrid model provides the benefits of both combined and separate finances. It allows for shared financial responsibility in certain areas while maintaining some individual financial autonomy in others. The challenge is agreeing on what accounts/expenses should be joint vs. individual.

4. Proportional Splitting Based on Income 

When combining finances jointly, some couples split shared expenses proportionally based on their individual incomes rather than an equal 50/50 split. If one partner earns significantly more income, they may pay a larger percentage of joint expenses while the lower-earning partner pays a smaller percentage.

This approach aims to balance financial burden fairly based on means. However, it requires detailed tracking of expenses and can create a dynamic of one partner paying for more (or being financially dependent). Some couples adjust the proportions if partners have a significant income disparity.

5. Living Off One Income and Saving/Investing the Other 

Another approach for couples with two incomes is having one partner’s income pay for all living expenses while the other partner’s income is saved/invested in full. This potentially allows couples to supercharge savings and wealth-building.

However, this method requires that one income truly cover 100% of expenses. It may foster imbalance if one partner controls all spending while the other is relegated to no discretionary spending. Couples who merge incomes this way often revisit and adjust the arrangement over time.

How Should Unmarried Couples Share Finances?

Unmarried couples face a unique set of considerations regarding money matters. Here are some key tips to navigate shared finances without the legal protections of marriage:

  1. Open Communication is King (and Queen): This goes double for unmarried couples. Discuss financial goals, debt, spending habits, and what “fairness” means to each of you.
  2. Consider a Cohabitation Agreement: This legal document outlines how you’ll handle shared assets and debts if you break up. It might not be the most romantic conversation, but it protects both of you financially.
  3. Think “Shared Expenses,” Not “Joint Everything”: Maybe a joint account works for bills and groceries, while separate accounts handle personal spending. This allows for teamwork on shared goals while maintaining some financial independence.
  4. The Percentage Play Can Be Your Ally: If one partner earns significantly more, contributing a percentage of income to a joint account can ensure fairness — for instance, 60%/40% based on earnings.
  5. Have an Exit Strategy: As unpleasant as it is, discuss a backup plan for separating your finances cleanly if you break up down the road.
  6. Estate Planning for Unforeseen Circumstances: Without marriage protections, unmarried partners aren’t automatically entitled to inherit assets or make medical decisions for each other. Consider wills, power of attorney documents, and beneficiary designations for retirement accounts and life insurance.
  7. Seek Professional Guidance: A financial advisor can help you develop a personalized plan that considers your income disparity, financial goals, and risk tolerance.

Communication is Key: 5 Tips for Managing Money as a Couple

Ultimately, every relationship is unique, and there is no universal “best” approach to how modern couples share or merge finances. Open communication and finding the right balance for your situation is critical. Many couples also evolve their financial arrangements over time as life circumstances change.

  1. Set Regular Money Dates: Schedule dedicated times to discuss finances, review budgets, and set goals together.
  2. Be Transparent: Share your financial history, including debts, assets, and spending habits , to build trust and avoid surprises.
  3. Define Roles and Responsibilities: Clearly outline each partner’s financial responsibilities, from bill payments to long-term investments.
  4. Compromise: Understand that financial priorities may differ, and be willing to compromise to find common ground.
  5. Seek Professional Guidance: Consult a financial advisor or counselor to help navigate complex financial matters and provide objective advice.

The most important things are to find common ground with your partner, trust each other, align your financial goals, avoid keeping money secrets, and revisit your system regularly. Money is one of the most common sources of relationship strife — but it doesn’t have to be when couples work as a team. How you manage money together is up to you as a couple.

Seeking Expert Guidance? Five Pine Wealth is Here to Help!

Managing finances as a couple can be a breeze with the right tools and strategies. At Five Pine Wealth Management , our team is here to help you develop a personalized plan that caters to your unique financial goals and relationship dynamic. 

Do you need help deciding how to manage your finances together? Email or give us a call at 877.333.1015 to schedule a meeting. Let’s craft the best plan for managing your money as a couple!

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What's the Best Asset Allocation for Someone 10 Years Away from Retirement?

December 22, 2025
Key Takeaways Your guaranteed income sources (pensions, Social Security) matter more than your age when deciding allocation. Retiring at 65 doesn't mean your timeline ends. You likely have 20-30 years of investing ahead. Think in time buckets: near-term stability, mid-term balance, long-term growth. You're 55 years old with over a million dollars saved for retirement. Your 401(k) statements arrive each month, and you find yourself questioning whether your current allocation still makes sense. Should you be moving everything to bonds? Keeping it all in stocks? Something in between? There's no single "correct" asset allocation for everyone in this position. What works for you depends on factors unique to your situation: your retirement income sources, spending needs, and risk tolerance. Let's look at what matters most as you approach this major life transition. Why Asset Allocation Changes as Retirement Approaches When you’re 30 or 40, your investment timeline stretches decades into the future. When you’re 55 and looking to retire at 65, that equation changes because you’re no longer just building wealth: you’re preparing to start spending it. You need enough growth to keep pace with inflation and fund decades of retirement, but you also need stability to avoid the need to sell investments during market downturns. At this point, asset allocation 10 years before retirement is more nuanced than a simple “more conservative” approach. Understanding Your Actual Time Horizon Hitting retirement age doesn't make your investment timeline shrink to zero. If you retire at 65 and live to 90, that's a 25-year investment horizon. Think about your money in buckets based on when you'll need it: Time Horizon Investment Approach Example Needs Short-Term (Years 1-5 of Retirement) Stable & accessible funds Monthly living expenses, healthcare costs, and early travel plans Medium-Term (Years 6-15) Moderate risk; balanced growth Home repairs, care and income replacement, and helping grandchildren with college Long-Term (Years 16+) Growth-oriented with a Long-term care expenses, decades-long timeline legacy planning, and extended longevity needs This bucket approach helps you think beyond simple stock-versus-bond percentages. Asset Allocation 10 Years Before Retirement: Starting Points While there's no one-size-fits-all answer, here are some reasonable starting frameworks: Conservative Approach (60% stocks / 40% bonds) : Makes sense if you have minimal guaranteed income or plan to begin drawing heavily from your portfolio upon retirement. Moderate Approach (70% stocks / 30% bonds) : Works well for those with some guaranteed income sources, moderate risk tolerance, and a flexible withdrawal strategy. Growth-Oriented Approach (80% stocks / 20% bonds) : Can be appropriate if you have substantial guaranteed income covering basic expenses and the flexibility to reduce spending temporarily as needed. Remember, these are starting points for discussion, not recommendations. 3 Steps to Evaluate Your Current Allocation Ready to see if your current allocation still makes sense? Here's how to start: Step 1: Calculate your current stock/bond split. Pull your recent statements and add up everything in stocks (including mutual funds and ETFs) versus bonds. Divide each by your total portfolio to get percentages. Step 2: List your guaranteed retirement income. Write down income sources that aren't portfolio-dependent: Social Security (estimate at ssa.gov), pensions, annuities, rental income, or planned part-time work. Total the monthly amount. Step 3: Calculate your coverage gap. Estimate monthly retirement expenses, then subtract your guaranteed income. If guaranteed income covers 70-80%+ of expenses, you can be more growth-oriented. Under 50% coverage means you'll need a more balanced approach. When to Adjust Your Allocation Here are specific triggers that signal it's time to review and potentially adjust: Your allocation has drifted more than 5% from target. If you started at 70/30 stocks to bonds and market movements have pushed you to 77/23, it's time to rebalance back to your target. Your retirement timeline changes significantly. Planning to retire at 60 instead of 65? That's a trigger. Every two years of timeline shift warrants a fresh look at your allocation. Major health changes occur. A serious diagnosis that changes your life expectancy or healthcare costs should prompt an allocation review. You gain or lose a guaranteed income source. Inheriting a pension through remarriage, losing expected Social Security benefits through divorce, or discovering your pension is underfunded. Market volatility affects your sleep. If you're checking your portfolio daily and feeling genuine anxiety about normal market movements, your allocation might be too aggressive for your comfort, and that's a valid reason to adjust. Beyond Stocks and Bonds Modern retirement planning involves more than just deciding your stock-to-bond ratio. Consider international diversification (20-30% of your stock allocation), real estate exposure through REITs, cash reserves covering 1-2 years of spending, and income-producing investments such as dividend-paying stocks. The Biggest Mistake: Becoming Too Conservative Too Soon Moving everything to bonds at 55 might feel safer, but it creates two significant problems. First, you're almost guaranteeing that inflation will outpace your returns over a 30-year retirement. Second, you're missing a decade of potential growth during your peak earning and saving years. The difference between 60% and 80% stock allocation over 10 years can mean hundreds of thousands of dollars in portfolio value. Being too conservative can be just as risky as being too aggressive, just in different ways. Questions to Ask Yourself As you think about your asset allocation for the next 10 years: What percentage of my retirement spending will be covered by Social Security, pensions, or other guaranteed income? How flexible is my retirement budget? Could I reduce spending by 10-20% during a market downturn? What's my emotional reaction to seeing my portfolio drop 20% or more? Do I plan to leave money to heirs, or is my goal to spend most of it during retirement? Your honest answers to these questions matter more than your age or any generic allocation rule. Work With Professionals Who Understand Your Complete Picture At Five Pine Wealth Management, we help clients work through these decisions by looking at their complete financial picture. We stress-test different allocation strategies against various market scenarios, coordinate withdrawal strategies with tax planning, and help clients understand the trade-offs between different approaches. If you're within 10 years of retirement and wondering whether your current allocation still makes sense, let's talk. Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation. Frequently Asked Questions (FAQs) Q: What is the rule of thumb for asset allocation by age? A: Traditional rules like "subtract your age from 100" are oversimplified. Your allocation should be based on your guaranteed income sources, spending flexibility, and risk tolerance; not just your age. Q: Should I move my 401(k) to bonds before retirement? A: Not entirely. You still need growth to outpace inflation. Gradually shift toward a balanced allocation (60-80% stocks, depending on your situation) and keep 1-2 years of expenses in stable investments. Q: What's the difference between stocks and bonds in a retirement portfolio?  A: Stocks provide growth potential to keep pace with inflation but come with volatility. Bonds offer stability and income but typically don't grow as much.

Rebuilding Wealth After Divorce: A Complete Guide to Your Financial Fresh Start

November 21, 2025
Key Takeaways Divorced spouses married 10+ years can claim Social Security benefits based on their ex’s record without reducing anyone else's benefits. Splitting retirement accounts requires specific legal documents (QDROs for 401(k)s) drafted precisely to your plan's requirements. Investment properties and taxable accounts carry hidden tax liabilities that significantly reduce their actual value. No one gets married planning for divorce. Yet here you are, facing a fresh financial start you never wanted. Maybe you’re 43 with two kids and suddenly managing on your own. Or you’re 56, staring down retirement in a decade, wondering how you’ll catch up after splitting assets down the middle. We get it. Divorce is brutal, emotionally and financially. And the financial piece often feels overwhelming when you're still processing everything else. According to research , women's household income drops by an average of 41% after divorce, while men's falls by about 23%. Those aren't just statistics. They're the reality many of our clients face when they first come to us. But here's something we've seen time and again: While you can't control what happened, you absolutely can control what happens next. Financial planning after divorce isn't just damage control. With the right approach, it can be the beginning of a more intentional and empowered relationship with your money. Here’s how to get there: First, Understand What You’re Working With Before you can move forward, you need a clear picture of your current financial situation. Start by gathering every financial document related to your divorce settlement: property division agreements, retirement account splits, alimony or child support arrangements, and any debt you’re responsible for. Then create a simple inventory: What you have: Bank account balances Investment and retirement accounts Home equity Expected alimony or child support income What you owe: Mortgage or rent obligations Credit card debt Car loans Student loans This baseline gives you something concrete to work with. You can't build a plan without knowing where you're starting from. Social Security Benefits for Divorced Spouses This one surprises people. If you were married for at least 10 years, you may be entitled to benefits based on your ex-spouse's work record, even if they've remarried. You can claim benefits based on your ex’s record if: Your marriage lasted 10+ years You’re currently unmarried You’re 62+ years old Your ex-spouse is eligible for Social Security benefits The benefit you can receive is up to 50% of your ex-spouse’s full retirement benefit if you wait until full retirement age to claim. Importantly, claiming benefits on your ex’s record doesn’t reduce their benefits or their current spouse’s benefits. If you’re eligible for both your own benefits and your ex’s, Social Security will automatically pay whichever amount is higher. What About Splitting Retirement Accounts in Divorce? Retirement accounts often represent one of the largest assets in a divorce settlement. Understanding how to handle the division properly can save you thousands in taxes and penalties. The QDRO Process For 401(k)s and most employer-sponsored retirement plans, you’ll need a Qualified Domestic Relations Order (QDRO). This legal document outlines the plan administrator's instructions for splitting the account without triggering early withdrawal penalties. QDROs must be drafted precisely according to both your divorce decree and the specific plan’s rules and requirements. We’ve seen clients lose thousands of dollars because their QDRO wasn’t accepted and had to be redrafted. Work with an attorney who specializes in QDROs. The upfront cost will be worth it to avoid expensive problems later. What About IRAs? Traditional and Roth IRAs can be split through your divorce decree without a QDRO. The transfer must be made directly from one IRA to another (not withdrawn or deposited) to avoid taxes and penalties. Tax Implications to Consider When you receive retirement assets in a divorce, you’re getting the account value and its future tax liability. A $200k traditional 401(k) isn’t worth the same as $200k in a Roth IRA or home equity, because of the different tax treatments. Many settlements divide assets dollar-for-dollar without considering how those dollars are taxed, so make sure yours addresses these differences. Dividing Investment Properties and Taxable Accounts Retirement accounts aren’t the only assets that require careful handling. If you own real estate investments or taxable brokerage accounts, the way you divide them matters. The Capital Gains Dilemma Let’s say you own a rental property purchased for $200k and is now worth $400k. Selling it as part of the divorce triggers capital gains tax on that gain, potentially $30,000-$60,000, depending on your tax bracket. Some couples avoid this by having one spouse keep the property and buy out the other’s share. This defers the tax hit, but you’ll want to ensure the buyout price accounts for future tax liability. Taxable Investment Accounts Brokerage accounts can be divided without triggering taxes if you transfer shares directly rather than selling and splitting proceeds. However, not all shares are equal from a tax perspective. Smart divorce settlements account for the cost basis of investments. These decisions require coordination between your divorce attorney, a CPA who understands divorce taxation, and a financial advisor who can model different scenarios. We remember a client whose settlement gave her a rental property “worth” $350,000. But the $80,000 in deferred capital gains owed when selling wasn’t accounted for. She effectively received $270,000 in value, not $350,000, a massive difference in her actual financial position. Building Your New Budget and Savings Strategy Living on one income after years of two requires adjustment. Start with your new essential expenses: housing, utilities, groceries, transportation, insurance, and any child-related costs. Then look at what’s left: this is where you begin rebuilding your financial cushion. Rebuilding Your Emergency Fund If you had to split or use your emergency savings during the divorce, rebuilding should be your first priority. Aim for at least three months of expenses, then work toward six months. Even $100 a month adds up to $1,200 each year. Maximize Retirement Contributions This feels counterintuitive when money is tight, but if your employer offers a 401(k) match, contribute at least enough to get a full match. Otherwise, you’re leaving free money on the table. If you’re over 50, take advantage of catch-up contributions. For 2025, you can contribute up to $23,500 to a 401(k), plus an additional $7,500 in catch-up contributions. If you're between 60-63, that catch-up increases to $11,250. Address Debt Strategically Post-divorce debt looks different for everyone. If you accumulated credit card debt while covering legal fees or temporary living expenses during divorce proceedings, prioritize paying these off once your settlement funds are available. Updating Your Estate Documents Updating beneficiaries and estate documents, a critical step, is sometimes overlooked. Check beneficiaries on: Life insurance policies Retirement accounts Bank accounts with payable-on-death designations Investment accounts Beneficiary designations override what’s in your will. We’ve seen ex-spouses receive retirement assets years after a divorce simply because the account owner failed to update beneficiaries. Address your will, healthcare power of attorney, and financial power of attorney, too. You're Not Starting from Zero Rebuilding wealth after divorce is about creating a financial foundation that supports the life you want to build moving forward. You have experience, earning potential, and time. It’s not a matter of if you can rebuild, but how efficiently you’ll do it. If you’re navigating financial planning after divorce, we can help. At Five Pine Wealth Management, we work with clients through major life transitions, creating practical strategies tailored to your specific situation. Call us at 877.333.1015 or email info@fivepinewealth.com to schedule a conversation. Frequently Asked Questions (FAQs) Q: Will I lose my ex-spouse's Social Security benefits if I remarry? A: Yes. Once you remarry, you can no longer collect your ex-spouse’s benefits. However, if your new marriage ends, you may claim benefits based on whichever ex-spouse's record is higher. Q: How long after divorce should I wait before making major financial decisions? A: Most advisors recommend waiting 6-12 months before making irreversible decisions like selling your home or making large investments. Focus first on understanding your new financial situation and letting the emotional dust settle. Q: Should I keep the house or take more retirement assets in the settlement?  A: This depends on your specific situation, but remember: houses have ongoing costs like property taxes, insurance, maintenance, and utilities that retirement accounts don't. We help clients run scenarios comparing both options, factoring in everything from cash flow needs to long-term growth potential, before deciding what makes sense for their situation.