Retirement Benefits

Building a Strong Financial Future: A Guide for Unmarried Partners

There’s been an increase in the number of couples who’ve chosen to be together but haven’t married. They might live together, called cohabitation, or maintain separate households, known as living apart together (LAT).

In California, and on the federal level, unmarried couples and domestic partnerships generally don’t have the same legal privileges as married couples . Partners who live together have the option of creating a cohabitation agreement, a legal document that outlines how they want to address household expenses, childcare, and retirement accounts. But even if you and your partner prefer not to create a legal agreement, it’s important to discuss your finances when the relationship becomes serious.

Partnerships require honest and effective communication, especially when it comes to money. Below we’ve gathered tips on how to start the conversation and a few topics to explore, plus impacts to your CalPERS benefits.

Starting the Conversation

The best time to talk about finances is when both partners are relaxed and open to the discussion. Rather than address every topic at once, you can pick one or two to start. If it helps, set a time limit so that the chat stays on course and check in with how you both are feeling. Take notes so you can remember what was said and create a to-do list. End the discussion with something light-hearted, like a walk to get ice cream or coffee, so you can wind down and reconnect.

Planning for Today and the Near Future

What’s their credit score?

It may feel awkward asking your partner about their credit score, but it can be a good way to start the money conversation. According to the Consumer Financial Protection Bureau, “a credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports.” Your credit score can impact the interest rate on loans you receive, credit card limits, and your mortgage. You can obtain a free credit score from Equifax, Experian, and TransUnion individually or from all three by visiting

Will you split the bills?

Couples can discuss if they should or shouldn’t split payment of rent and bills evenly or based on a percentage of income. If one partner earns more money, they might cover the entirety of rent or the mortgage, while the other partner pays for groceries and utilities. You may save money by sharing subscription services, phone plans, or gym memberships.

If you own your home and your partner pays most of the bills, they may have a legal interest in the property if you separate. Consult with a lawyer for personalized information on this topic.

What about student loans and other debt?

Debt can have a large impact on one’s ability to spend today and save for the future, which is why many people prioritize paying it back. Understanding how much you and your partner owe can help determine your budget and prioritize goals. Our two-minute video on managing debt explores how interest rates impact debt and offers tips for how to become debt-free.

Should you have separate or joint bank accounts?

Some couples may opt for having either a separate or a joint bank account. Joint accounts can be used to pay for shared expenses, bills, and vacations. Ensure that both people have access to the account and there is transparency in how money goes in and comes out. Some couples prefer to keep their money separate. Splitting expenses may be a bit more work, but both partners retain total control of their own assets and maintain financial independence.

Planning for the Long Term

Are you both saving for retirement?

It’s critical that both people are saving for retirement. Talk about how much you’re saving and when you want to retire. If one partner wants to retire as soon as possible, while the other prefers to work as long as they can, this could impact the amount of money each person saves or eventually withdraws. If you want to provide your partner your CalPERS retirement benefits, you could let them know if they are the beneficiary of your CalPERS and other retirement accounts, or if that money will be going to a trust, estate, or organization.

Are you going to make a major purchase?

Are you planning on buying a car, house, or going on a luxury vacation as a couple? Before you start saving for a major purchase, chat about what amount each of you will be saving, where the money will be housed, and how it will be spent. Buying a house can be complex, more so for unmarried couples. Meet with a lawyer to discuss ownership, taxes, and other legal implications of homeownership.

What about your CalPERS benefits?

Only married partners and domestic partnerships are eligible to be enrolled into your CalPERS health plan.

Death benefits are paid according to the valid beneficiary designation we have on file. Many factors affect death benefits—whether the CalPERS member was active, inactive, or retired. Keep in mind that the beneficiary designation on file with us becomes invalid or revoked during certain life events like the birth of a child, marriage or domestic partnership, and divorce or termination of a domestic partnership.

Have you started estate planning?

Estate planning is a wise step no matter your age or amount of assets. Your estate is all the property owned by you at the time of your death: real estate, pension accounts, bank accounts, stocks and securities, life insurance policies, and personal property like your car or artwork. Discuss with your partner your will, living trust, durable power of attorney, and advanced health care directive.

You can designate anyone to be your CalPERS attorney-in-fact. If you want to revoke or terminate your special power of attorney, you must submit a written request to us.

Is marriage or domestic partnership in your future?

In California, retirement benefits and any property acquired together, including your CalPERS pension, are considered community property. While this isn’t a factor for unmarried partners, it’s something to discuss if marriage or domestic partnership is in your future.

Take the Next Step

Once you’ve covered the basics and explored long-term financial goals with your partner, here are a few more items to consider:

  • Set up quarterly check-ins.
  • Update documents and plans as needed or yearly.
  • Examine your financial goals on your own and with your partner.
  • Monitor your spending habits and determine if you need to make changes.

Conversations like this are the groundwork toward building a strong relationship, and you’ll be glad you took that first step.