What I Made My Boyfriend Do 6 Months Into Our Relationship For FI
Let's talk money, honey!
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I met my boyfriend (now my husband) on Valentine's Day. As with any relationship, our path to becoming "official" took some time. By the time we became official, we had known each for months already. Earlier on in our relationship, we've always been pretty open about the range of topics we would discuss. From family to work to goals and dreams, nothing seemed out of the question to discuss. While we both didn't know how serious we were going to be, to me it was never too early to start thinking about the future.
One day, while we were spending time at his place, I saw a Fidelity folder on his table. I casually asked about it and asked what kind of retirement plan his work had. He shrugged. I pressed on. In the back of my mind, I knew he had been at his job for a while now and I truthfully wanted to see if he was contributing to a retirement account. It was just the thing to do. I didn't even think that far about us being in a long-term relationship. To me, if his employer was matching, he was leaving money on the table. I was floored when he said he wasn't contributing. To him, it wasn't a priority. As an immigrant himself (he came to the U.S. at 22 to for his Master's), he didn't really know much about the inner workings of the American financial system.
At that point in time, I sold him on contributing to his 401k up to this employer match, around 4%. We even opened his account together. It was something. We calculated how much his take home pay would be affected. Not much in the grand scheme of things.
Was it weird for me to ask him to contribute to this retirement plan given 1) we were in our late 20's, 2) we were only dating and 3) who really knew what the future held for us? Absolutely yes! Would I do it again? Yes! Here are my whys. Regardless if we ended up together in the long-term, him contributing to a retirement amount didn't hurt the quality of time we spent together. It didn't affect his lifestyle and it put him on a path to more financial security. Now, that we are married, I am even more grateful that he did that.
So what are the advantages of contributing to a 401k early?
- He contributed pre-tax dollars which lowered his taxable income, meaning, the taxes he paid was lower because his income wasn't that high. At that point in time, it wasn't something that he took advantage of, but now we know better.
- He received a company match, which is free money from the company. He continues to work for the company so that's an additional few years of cash.
- He was able to take advantage of market growth. He started investing post 2008 so a lot of the market was still down and continued to increase his contributions to date. It's 2018 now. You do the math.
These days, the way we look at investments is a little different. It's not just the thing to do, it's the thing that we want to optimize towards so that we can reach Financial Independence much faster.
In hindsight too, statistically speaking, majority of us will couple off at some point in our lives. I guess it's better to prepare our finances now and get into the mindset that this is just not my money, but our money, our life, our family and our future.