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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Is Paying Off Your Mortgage in Your Late 50s the Right Move?

February 19, 2026
Key Takeaways Paying off your mortgage before retirement reduces monthly expenses, lowers your income needs, and provides psychological peace of mind, but ties up money in an illiquid asset. Keeping your mortgage and investing instead may provide higher long-term returns, better liquidity, and tax advantages, but requires comfort with debt and market volatility. Your mortgage interest rate, risk tolerance, retirement timeline, and other income sources should all factor into your decision. A hybrid approach — paying down part of the mortgage while keeping some money invested — can provide a balance between security and growth potential. At 58, let's say your mortgage balance is $180,000. Your retirement accounts have grown to $850,000. So now you’re wondering: should I just pay off this mortgage and be done with it? We have this conversation regularly with clients in their late 50s and early 60s. Some choose to go ahead and pay off their mortgage. Others keep it and invest the difference. There’s nothing wrong with either choice, but what’s right for you depends on your specific situation. We’re here to walk you through how to think about this decision: The Case for Paying Off Your Mortgage Before Retirement There’s something undeniably satisfying about owning your home outright. Beyond the emotional relief, there are practical reasons that make sense: Reduced monthly expenses in retirement. Housing is typically your highest fixed cost. Eliminating that payment frees up cash flow for other priorities, like travel, healthcare, and helping the grandkids with college tuition. Lower income needs mean lower taxes. When you don’t have a mortgage payment, you don’t need to withdraw as much from retirement accounts. Smaller withdrawals often mean staying in lower tax brackets and (potentially) reducing Medicare premiums. Peace of mind during market downturns. If we hit a recession early in your retirement, having no mortgage means you won’t feel pressured to sell investments at depressed prices to cover housing costs. Guaranteed return on your money. Paying off a 4% mortgage is like earning a guaranteed 4% return (tax implications aside). We had a client who paid off her $220,000 mortgage at 59. Mathematically, she probably could have earned more by investing that money. But her reasoning made sense for her, “My parents stressed about money their whole retirement. I don’t want that. I want to know that my house is paid for, no matter what happens.” For her, the psychological benefit outweighed the potential investment returns. The Case for Keeping Your Mortgage and Investing Instead For others in their late 50s, keeping the mortgage and investing that money elsewhere makes more financial sense: Higher potential investment returns. If your mortgage rate is 3-4% and you can reasonably expect 6-8% average returns from your diversified investment portfolio over time, the math favors investing. Maintain liquidity and flexibility. Money tied up in home equity isn’t easily accessible. You’ll have more options if that money is in investment accounts rather than in illiquid home equity. Tax advantages of mortgage interest. If you itemize deductions, you might still benefit from the mortgage interest deduction, which reduces the effective cost of your mortgage. Inflation works in your favor. Your mortgage payment stays the same while everything else gets more expensive. In 10 years, your $2,000 payment will feel smaller relative to other expenses. We worked with a couple who were considering paying off their $300k mortgage at age 57. Their mortgage rate was 3.25%, they were in a high tax bracket, and they had at least twenty years of retirement ahead. They decided to keep the mortgage and invest instead. Five years later, their investment account had grown enough that they could pay off the mortgage if they chose to, while still having substantial assets left over. The Middle Ground: A Hybrid Approach You don't have to choose all-or-nothing. Some clients find that a combination works best: Pay down part of the mortgage . Reduce your balance and shave a few years off your repayment timeline while maintaining some liquidity. Recasting and refinancing options can also lower your monthly payment. Plan for a future payoff . Keep the mortgage while you're still working and in higher tax brackets. Then plan to pay it off in a few years when you retire and your income drops. Use bonus income strategically . Consider using windfalls, bonuses, inheritance, business sale proceeds, to pay down the mortgage while keeping your regular savings and investments intact. How to Think Through Your Decision Here's how to evaluate the mortgage payoff vs investing decision for your situation: What's your mortgage interest rate? Below 4%, the mathematical case for keeping it gets stronger. Above 5%, paying it off starts looking more attractive. How much liquid savings do you have? If paying off your mortgage would drain your emergency fund or leave you with little accessible cash, that's a red flag. What's your risk tolerance? Be honest. If having a mortgage payment keeps you up at night, no investment return will make up for that stress. What are your other retirement income sources? Social Security, pension, rental income — these reliable sources might make carrying a mortgage more manageable than you think. When Paying Off Makes Sense Based on our experience, paying off your mortgage before retirement tends to work best when: Your mortgage interest rate is relatively high (5%+) You'd still have 6-12 months of expenses in emergency savings after payoff You're naturally debt-averse, and the monthly payment creates genuine anxiety You have other sources of retirement income You plan to stay in this home for the foreseeable future When Keeping Your Mortgage Makes Sense Keeping your mortgage and investing instead usually works better when: Your interest rate is low (below 4%) You're in a high tax bracket where the mortgage interest deduction provides value You have a long time horizon (20+ years of retirement ahead) You're comfortable with investment volatility You want flexibility and liquidity in your financial plan Getting Help With Your Decision At Five Pine Wealth Management , we help clients work through these decisions regularly. We review your complete financial situation, run the numbers, and help you understand the trade-offs so you can make a confident decision. A good financial advisor can run projections showing both scenarios, factor in your complete financial picture, help you stress-test different economic scenarios, and integrate this decision with your broader retirement, tax, and estate planning strategies. Whether you decide to pay off your mortgage or keep it and invest, what matters most is that the choice aligns with your goals, risk tolerance, and peace of mind. If you're wrestling with the mortgage payoff vs. investing question and want to talk through your specific situation, we're here to help. Call us at 877.333.1015 or email info@fivepinewealth.com . Frequently Asked Questions (FAQs) Q: Should I use my 401(k) to pay off my mortgage? A: Generally, no. Withdrawing from retirement accounts before 59½ triggers penalties. Later, large withdrawals can push you into higher tax brackets. If you want to pay off your mortgage, it's usually better to use funds from taxable investment accounts or savings rather than tapping tax-advantaged retirement accounts. Q: What if I want to downsize in a few years anyway? A: If you plan to sell and move to a smaller home within 3-5 years, keeping your mortgage makes more sense. You'd be paying it off only to sell shortly after, and that money could work harder for you in investments until you make your move. Q: Can I change my mind later if I keep the mortgage?  A: Yes, you can always pay it off later if your circumstances or feelings change. Once you pay it off, however, accessing that equity again (without selling) typically requires a new loan or a home equity line of credit, which isn't always simple or cheap.

What High Earners Overlook After Maxing Out Their 401(k)

January 26, 2026
Key Takeaways High earners maxing out 401(k)s at $24,500 are only saving about 8% of a $300,000 income in their primary retirement account. The mega backdoor Roth strategy can increase total 401(k) contributions to $72,000 annually with tax-free growth. A comprehensive approach can create nearly $3 million in additional retirement wealth over 20 years. It's 2026. You're checking all the boxes. You're earning upwards of $300,000 annually, and you're maxing out your 401(k) every year. You've reached the $24,500 contribution limit and feel confident about securing your financial future. Then you realize $24,500 represents less than 8% of your income. Over 20 years, this gap adds up to millions in lost opportunity. Thankfully, you're not stuck with the basic 401(k) playbook. There are sophisticated strategies beyond your contribution limit. 5 Strategic Moves for High Earners with Maxed-Out 401(k)s Here are five sophisticated strategies that can help you build wealth beyond your basic 401(k) contributions. All projections assume a 7% average annual return and are estimates for illustrative purposes. 1. Mega Backdoor Roth Contributions If your employer's 401(k) plan allows after-tax contributions, this could be your biggest opportunity. With employee contributions, employer match, and after-tax contributions, the combined 401(k) limit for 2026 is $72,000 ($80,000 if you're 50 or older). The mega backdoor Roth works because you immediately convert those after-tax contributions into a Roth account, where they grow tax-free forever. The catch: Not all employers offer this option. You need a plan that permits after-tax contributions and in-service Roth conversions. The impact: The available space for after-tax contributions depends on your employer match. With a typical employer match of 3-6% (roughly $10,000-$21,000 on a $350,000 salary), you could contribute approximately $26,500-$37,000 annually. At 7% average returns over 20 years, this creates approximately $1.1-$1.5 million in additional tax-free retirement savings. 2. Donor-Advised Funds for Charitable Giving If you're charitably inclined, donor-advised funds (DAFs) offer a way to bunch several years of charitable contributions into one tax year, maximizing your itemized deductions while still spreading your giving over time. You get an immediate tax deduction for the full contribution, but you can recommend grants to charities over many years. The funds grow tax-free in the meantime. The catch: Once you contribute to a DAF, the money is irrevocably committed to charity. You can't get it back for personal use. The impact: Contributing $50,000 to a DAF in a high-income year (versus giving $10,000 annually) can create immediate federal tax savings of $15,000-$18,500 while still allowing you to support the same charities over five years. 3. Taxable Brokerage Accounts with Tax-Loss Harvesting Once you've maximized tax-advantaged accounts, strategic taxable investing becomes your next move. The key is working with a financial advisor who implements systematic tax-loss harvesting throughout the year. Tax-loss harvesting involves selling investments at a loss to offset capital gains elsewhere. Done strategically, this can save thousands in taxes annually. The catch: Long-term capital gain rates (0%, 15%, or 20%) are lower than ordinary income tax rates, but you're still paying taxes on gains. It's less tax-efficient than retirement accounts, but far better than ignoring tax optimization. The impact: For high earners in the 35-37% ordinary income brackets, the difference between long-term capital gains (20%) and ordinary rates is significant. Effective tax-loss harvesting on $50,000 in annual gains over 20 years could save $150,000+ in taxes. 4. Health Savings Account (HSA) Triple Tax Advantage HSAs offer a unique triple tax benefit: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. With 2026 contribution limits of $4,400 for individuals and $8,750 for families, this adds another powerful layer to your strategy. You can invest HSA funds just like an IRA and let them grow for decades. After age 65, you can withdraw the funds for any purpose, medical or otherwise. The catch: You must have a high-deductible health plan to qualify for an HSA. After age 65, non-medical withdrawals are taxed as ordinary income (like traditional IRA distributions), but you still benefit from the upfront deduction and decades of tax-free growth. The impact: Contributing the family maximum ($8,750) annually for 20 years at a 7% average annual return creates approximately $355,000-$360,000 in tax-advantaged savings. 5. Backdoor Roth IRA Contributions Not to be confused with mega backdoor Roth contributions! Even if your income exceeds the Roth IRA contribution limits, you can still fund a Roth through the backdoor method: make a non-deductible contribution to a traditional IRA, then immediately convert it to a Roth IRA. The catch: If you have existing traditional IRA balances, the pro-rata rule complicates things. You may want to consider rolling those funds into your 401(k) first if your plan allows. The impact: Contributing $7,000 annually through the backdoor Roth for 20 years at 7% average annual return creates approximately $285,000-$290,000 in tax-free retirement savings. What Compounding These Strategies Looks Like Over 20 Years Let’s look at approximate outcomes based on a 7% average annual return. 401(k) Only: Annual contribution: $24,500 Total after 20 years: ~$1M 401(k) + Mega Backdoor Roth: Annual contribution: $72,000 Total after 20 years: ~$3M Note: Mega backdoor Roth space varies based on your employer's match. These calculations assume you're maximizing the total annual limit. Comprehensive Approach (under age 50): Mega Backdoor Roth: ~$3.0M HSA: ~$350K-$360K Backdoor Roth IRA: ~$285K-$290K Strategic taxable investing with tax-loss harvesting Total retirement savings: ~$3.6M+, plus taxable investments Comprehensive Approach (ages 50-59): With higher contribution limits and catch-up contributions, total retirement savings can reach ~$4M+ over 20 years. Comprehensive Approach (ages 60–63 with enhanced catch-up contributions) Higher contribution limits during peak earning years allow for meaningful acceleration of retirement savings. The exact impact depends on timing, contribution duration, and existing balances. The Bottom Line The difference between stopping at your basic 401(k) and implementing a comprehensive strategy can approach $3 million or more in additional retirement wealth over time. Why Strategic Coordination Matters These aren't either/or decisions. The most effective approach coordinates multiple strategies while ensuring everything works together. At Five Pine Wealth Management , we help high-earning clients build comprehensive plans that go beyond the 401(k). We coordinate your employer benefits, tax strategies, and investment accounts to create a cohesive approach that maximizes your wealth-building potential. This requires working across several areas: Analyzing your employer's 401(k) plan for mega backdoor Roth opportunities Implementing systematic tax-loss harvesting in taxable accounts Coordinating Roth conversions and backdoor contributions Optimizing your HSA as a long-term retirement vehicle Ensuring charitable giving strategies align with your tax situation Maximizing catch-up contributions when you reach milestone ages As fiduciary advisors, we're legally obligated to act in your best interest. That means we're focused on strategies that serve your goals, not products that generate commissions. Ready to see what's possible beyond your 401(k)? Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation about your specific situation. Frequently Asked Questions (FAQs) Q: Does my employer's 401(k) plan automatically allow mega backdoor Roth contributions? A: No. You need a plan that permits after-tax contributions and in-service conversions to Roth. Check with your HR department. Q: How do I prioritize which investment strategies to use? A: Generally, maximize employer match first (it's free money), then fully fund your 401(k), explore Mega Backdoor Roth if available, max out your HSA, consider backdoor Roth IRA contributions, and then move to taxable accounts with tax-loss harvesting. We can help determine the right sequence for your circumstances.