Gerstein Fisher | Getting married

Getting married

Rosa* and Andrew*, a lawyer and a dentist, respectively, came to us fresh from their honeymoon. Recognizing that marriage brought a number of financial decisions they needed to face together, Rosa and Andrew wanted some objective advice and assistance in setting up a financial plan for their future. On the horizon were buying a home, starting a family, funding the children's' college education and paying off their own student loans.

Toward their goal of purchasing a home in two years, we advised them to put money aside each month to accommodate a 20 percent down payment as well as the projected closing costs. Because of the short investment horizon for this purchase, we recommended investing these funds in tax-free municipal bonds. Another portion of the budget we created for them targeted monthly payments on their student loans.

Looking out further into the future, we projected the cost of a college education for two children in 20 years. We suggested that Rosa and Andrew set up a college account for each child, making monthly contributions to a diversified portfolio of stocks and bonds. As the children approached college age and the investment horizon shortened, we advised decreasing the proportion of stocks to bonds and cash, thus helping to minimize market risk and providing liquidity.

Despite the couple's tight budget, we encouraged Rosa and Andrew not to lose any time investing toward retirement, since those years of potential gains will never return. We advised Rosa to contribute the maximum to her law firm's 401(k) plan and that both husband and wife contribute the maximum to a Roth IRA each year. We also set up a retirement plan for self employed persons for Andrew, who was embarking on his own dental practice.

Rosa and Andrew rightly recognized that marriage brings a lot of financial changes and decisions, and we were able to put them on the right path—early on—to meet their goals in their new life together.

* Names and some details have been changed to protect client confidentiality. Your particular situation can differ based on your unique needs and objectives.

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