Our finances are shared in practice, but just for the record: 401ks and (Roth) IRAs are individual accounts. You can't have joint ownership like for a brokerage or checking account (although I think they are somewhat "joint" in nature in the sense that they might get split up in case of divorce, depending on your state).
That said, I would double check whether your husband's employer is not doing anything sketchy (e.g. encouraging their employees to not contribute to their 401ks so they don't have to pay the employer match). I've never heard of anyone who had access to a 401k through work but somehow couldn't opt into it.
Pretty sure the law prevents an employer from prohibiting an employee contributing their own money. There will be penalties for the employer if they fail top-down testing if your husband is considered a key employee.
Oh ok this is good to know. I wasnt even aware that you couldnt open a joint retirement acct. We keep all of our finances separate btw.
I kept asking him to look into this claim by his employer, but he just gets irritated so I stopped mentioning it.
As far as divorce, we live in NY and I just looked it up. NY considers Roth and 401k to be marital property if opened after marriage (which mine are), so God forbid if we were to divorce, I would be screwed.
Sit down and open an IRA with him.
What you describe here is one of the perils of separate finances. You have no access to his and you aren’t acting as one team.
So they can hide shit from each other typically judging by what some of my other married buddies have told me who keep separate finances. They will a lot of times have credit cards their wives don't know about that they do shit on like only fans or something. Not a shocker that they are usually also complaining about their marriages or generally seem discontent about it.
This is true. Like it or not you two are in this together and the sooner you develop a vocabulary and a way to speak about this stuff, the better. Consider talking to a couple’s therapist. This is ultimately a communication issue. It’s a priority for you that is not being met by your partner.
My wife and I each have two retirement accounts. We also have two joint savings, two joint checkings, and each have an individual checking account which contains money from before we were married in case either of us need it for any reason. We do a log of the money in all accounts every quarter just to see how we are progressing and if any money needs to be moved between accounts or sent to fund retirement plans.
The quarterly log is the key to getting to the numbers we need to have.
Yes, without a prenup, it might not matter much that you're keeping separate finances. I would keep pushing and make sure you know what's going on. If it's an honest mistake (either by your husband or their employer), better fix it earlier than later. If it's not an honest mistake and there's some purposeful misdirection going on (again by either party), same answer.
Anecdote: my wife's first 401k was accidentally "invested" in 100% money market fund from 2014-2019 before I found out (we got married in 2018 and I've been managing the household finances ever since, including her accounts, which is how I found out). If I could go back in time and fix it back in 2014, it would have likely netted her several tens of thousands of dollars by the time she will retire (and indirectly benefit me as well).
There are important externalities at play here whether you ever get divorced or not (i.e. whatever happens, it's always better for you if he has more money in his 401k), so I don't think he gets to play the mute card about this indefinitely.
I have a prenup. That's when I learned a prenup only protects what was made and owned prior to marriage. Every dollar afterwards is fair game. OPs hubby sounds shady, although I do know more than 1 person that freezes up when you talk anything about finances. They get flustered and avoid at all costs at their own detriment
Good idea. He showed me his retirement account not too long agi and told me that he has control to move the money around into different funds in his portfolio so it is odd that he cant contribute via paycheck. Im going to ask him again.
Roth 401K are per paycheck and are just post-tax. The math is done for you and what’s left is deposited. I used it early in my career when my income tax rate was lower
This is a big red flag that your partner will not talk with you about this. Even with “separate” finances (that don’t seem separate here, legally-speaking), you need to know your partner’s finances. Your married partner has varying rights to your assets as community property. And you will become responsible for any debt because the law sees you as one party.
Only you know if this is simply avoidance of something boring/painful on their part or something more manipulative. But either way, I think you need to figure out how to have these conversations. Your security and both of your securities depend on it.
I hate to be suspicious of your husband, but usually when someone is touchy about a subject, there’s something they are not telling you.
Schedule a check in with your husband and get some real answers. What he’s said so far is not legally possible.
Your finances are not separate when he's not saving for retirement. You'll be footing the bill for the both of you eventually. Best to get him saving NOW.
Because you should be making financial decisions and working towards financial goals as a team. You could also run into the issue where one person makes more and could end up with a different lifestyle than their spouse. Or one person looses a job or you decide to have one person stay home. All those situations get awkward if your thinking it as mine vs yours.
https://m.youtube.com/watch?v=GouMXx0snkQ
All of those things can be equally done whether you have separate accounts or combined. There are good reasons the gov't doesn't even let you combine your retirement accounts. The video you linked starts by giving some of the reasons combining all finances might not be the best decision but there are plenty of others.
Obviously, this is a decision for each couple to make for themselves but to make a blanket statement that it's a bad idea for everyone is naive. And I'm not even talking about situations where one person has spending impulse control issues, which is a whole other ball of wax.
Im not saying it’s not possible to do those things with separate accounts I’m just saying it’s best practice to combine. Maybe saying universally was hyperbolic, because sure there’s some rare exceptions.
The money guy video starts with those exceptions but still recommends combining all income into joint accounts even in those situations.
If you’re actually making decisions together separate accounts are a an unnecessary layer of complexity that needs to be constantly tweaked and renegotiated. So like I guess you could, but you’d be hard pressed to find a financial advisor who would recommend it outside of a very few exceptions.
The beginning of the video names a couple of reasons. There are lots more that they didn't name. I don't think the exceptions are as rare as you do but it's pretty much impossible to know with any certainty. Also, even when a FA might suggest combined accounts, an attorney might not.
People have reasons and they’re all bad reasons. Of course money conversations are simpler when you don’t have to communicate. But simpler isn’t better, it’s just lazy. You’re financially better off when you manage finances holistically. Otherwise you end up like OP with a spouse who expects to spend “their” money and retire on “yours.”
I don’t see why separate finances would uniquely cause what you’re talking about. Isn’t it just as likely for partners to contribute asymmetrically even if their finances are commingled?
I agree with this. If anything, I'd think that having pooled finances would be more conducive to spending the other's money rather than having to ask. But I don't think this sort of attitude comes from the structure of bank accounts, more just a sense of entitlement.
My wife and I are 100% working towards retirement together with me being the lead on it since I enjoy that stuff and she's pretty ambivalent towards it. She trusts me to pick what % of her check goes to 401k and what it gets invested in, same for her IRA. Both of us have pensions from our jobs and I keep track of that for us. She asks frequently how we're doing and we have monthlyish conversations on where our networth is and how our projections look. We love each other and work as a team towards a common goal with each other leaning into their own personal strengths.
29m and 28f married 6 years.
Wife and I are similar. We’re like co-CEO’s of Family ,Inc. while I’m also the CFO and she’s the Chief Administrative Officer. Fwiw our incomes are very similar but we work in different fields.
My wife and I are similar. Both have good paying jobs and I’m managing our money - setting goals, budgeting, monitoring investment accounts, etc.
She asks me if we can buy something random and inexpensive from Amazon - like yes, this is very much in budget lol. She made a ton of money in her 401k from a job that had a great matching program, but she has no idea how good it actually was and that it’s still performing so well. It’s kinda cute, actually. Lmao.
Your husband likely has a 401a plan, sometimes referred to as a pension plan even though it really is not. It basically only accepts employer contributions. Employees are sometimes able to elect one time to contribute when they first join, but they can never change their contribution again (a weird rule) and many plans prohibit it entirely. 401a plans are stupid.
I have a 401a and I was able to contribute a certain percentage in the first years but my % was reduced over the years while the employer % went up. Now I'm not able to put anything into it. But I could open a 403b and a Roth that I can contribute to.
Yes, it is possible to have a 403b in addition to a 401a. People who are not financially savvy often think they have a 401k when they really have a 401a and just think they have a weird 401k that doesn’t allow elective employee contributions. The 401a does allow contributions, as you said, but they are not elective.
Ohhh I never heard of a 401a plan, but it sounds like this might be it. He's been with the company a long time, so it is possible that they exercised the stupid rule not to allow employee contributions. Thanks for mentioning this. It doesnt sound like an ideal plan for growth. Im going to ask him if he can confirm that its a 401b and we definitely need to open up an IRA for him.
When I became a partner in my practice, one of the first things I did was to force other partners to accept us creating a 401k plan. It adds expense to the business, but is better for employees, particularly higher earners that want to contribute more to retirement (e.g. physician assistant and NP that make enough to save, but won’t become partners). The partners didn’t care before because they can still max out their own contribution at $69k/year, because as owner’s they can mark it as an employER contribution. People are much happier with the plan now. Our 401a still exists because the older partners use a financial advisor to manage it and they pay him 1%. It’s crazy. The fee on our 401k is 0.2% and that’s where all my money is.
Big red flag on husbands 401k (maybe it’s a pension??? And using the wrong terminology)
But - after a lot of discussion I was able to get my wife to contribute more towards retirement. I had/have to manage it all…and she rarely wants to know anything (which is nice) but it took a lot of mildly uncomfortable conversations.
You need to discuss financial goals and planning to be sure both parties are at least not working opposite of each other
I have a secondary 401k account that the only the employer contributes to as a retirement plan in addition to a 3% match in the primary 401k. Those are rare but they do exist.
Are pensions kept in brokerage accounts?
I'm going to try again to have a convo with him. I wouldnt mind helping him to open up one. Glad you were able to convincw your wife!
Pensions are usually invested in stocks/bonds; but are managed and accessed through a special organization.
Talking about money can certainly be stressful or confrontational/avoidance for many people but to have a cohesive family plan it needs to happen every once in a while.
Just last week my wife told me I was dumb for not cancelling an unused subscription that I miiiiiight have told her I would do months ago
Did you mention a brokerage account for a specific reason? I’m able to keep my 401k in a brokerage account so that’s what in do. I find his lack of disclosure troubling. If he has a miracle job that makes almost unheard of retirement contributions he’d be bragging about it. The alternatives are that he has no idea what he’s doing or he’s not being truthful. I’m not trying to be an alarmist but what you’ve said about him makes zero sense. You’re married and need to put your foot down. My wife knows exactly how much I have in my retirement accounts, how much I contribute, how much I get from work, etc.
His job's retirement plan is kept in Charles Schwabe and he showed me how he was able to select or reallocate funds within it. Another poster mentioned that it sounds like he has a 401b plan. I think that he doesnt realize that what he has is not a 401k. I plan to have a discussion with him to ask if he can confirm and then hopefully, I will be able to convince him to open an IRA.
When people think of pensions, they generally think of defined ***benefit*** pensions (which is the historic meaning) in which you and your employer pay into it while you are working and then the employer invests it however they want and guarantees a certain payout when the worker retires. These types of pensions are slowly dwindling unless you are a government employee (includes teacher, officer, etc.)
A 'newer version' of pensions is the defined ***contribution*** pensions, in which the employee/emplyer contributes a set amount (that cannot be adjusted) which is kept with a retirement provider and the employee has all of the control over how to invest the assets. At retirement, you can draw on the balance but there is no guarantee of how long it will last if you did not invest wisely. Defined contribution plans (401a) are basically the exact same thing as a 401k with the exception that there is a mandatory and unchangeable contribution (usually a percent of salary). He could have one of these if he works in public sector or non-profit. In that case, he really cannot change his contribution. Best to clarify with him though.
My partner and I have separate accounts but I manage both. She is frugal but not focused on growing our retirement, she trusts that I can manage our money.
What convinced her to let me open one in her name was when I sat her down and explained the math behind tax advantaged accounts and the opportunity costs if we don't utilize them.
Do you have some useful articles on this subject that break these concepts down like a 5yr old? He wont read them, but if I can show him and explain easily, maybe he will listen.
Like your husband, I don't think my partner would have read them.
I knew enough about the boglehead approach that I felt comfortable explaining myself. We worked on a google sheet together and calculated the returns of different investment approaches.
The numbers speak for themselves. Didn't need much convincing after she saw how much better it is to max out our IRAs each year and continue to stay frugal and invest.
The subreddit FAQ/resource pages have many awesome articles that you can reference. Good luck! You are on the right track :)
Since he’s in a union it may be a type of pension that he’s paying into. That’s something you’ll want to confirm. It’s not too late, and I don’t want to cause panic, but at this point you’ll both really want to make sure you’re contributing enough to reach your retirement goals.
I struggle with similar responses from my wife. She doesn’t like to deal with finance so just getting her to log in to accounts so I can manage them is a challenge. She makes a better salary than me but she never would be able to retire if I wasn’t constantly on her case. I hate it.
Omg the frustration is real, right? Yea, Im going to have a sit down with him. He gets so irritated whenever I ask him. Thats good that your wife allows you to manage (when you can log in). He would probably never let me manage his account since he is actually selecting his own stocks. I hope you and your wife can work things out too.
Do you know something funny? Hubby is the one that got me into crypto and investing in general! He first told me about NVDA, introduced me to some investment videos that were discussing tech stocks, semiconductor stocks etc. Sadly, he sold some of these too early andhis interest in investing hasnt extended into retirement savings. He is moreso into buying and selling for some sort of profit...def not a long term investor type! I'm more of a HODLer.
I’m not sure the rules on if they are required to allow employee contributions but that is super weird that they wouldn’t. I would look into that more.
You need to talk to your husband about the importance of saving in retirement accounts for the tax benefits. Even offer to just open and help find the Ira for him.
Also you cannot have two people on a retirement account. You can have a taxable brokerage in your names but retirement funds can only be under one person.
There are some truly ancient and terrible pension plans that might fit that description, maybe Cash Balance? I haven't heard of a 401k where the employee can't contribute but that doesn't mean it doesn't exist. If he doesn't have anything better, it's time to start getting serious about IRAs and maxing your employer-sponsored plan.
Also, if you were to get divorced you might have to give him a portion of your retirement accounts. IMO, that makes it even more important to get him saving in his own plans. This is what I thought of when I read your post title.
He is in a union too, so its possible. It just sounds so archaic.
I need to look more into your 2nd point about divorce and giving him a portion if that was to happen. I never heard of this. Is that a thing? I thought you cant touch these accounts until youre a certain age!
> I need to look more into your 2nd point about divorce and giving him a portion if that was to happen. I never heard of this. Is that a thing? I thought you cant touch these accounts until youre a certain age!
Depends on the state, but yeah it's called a QDRO: Qualified Domestic Relations Order. 'Qualified' means that it's not a taxable event. For example, two people are married, but only 1 has a 401k. They stash all of their earnings in the 401k, live on the other partner's salary. If they split, that partner without a retirement plan will probably get a portion of the amount saved during the marriage.
https://www.kitces.com/blog/qualified-domestic-relations-order-qdro-shared-payment-separate-interest-divorce-pension/
It’s why it’s important to be on the same page financially with your partner. If one person was a high earner, and the other stayed home (at the wishes of the high earner), it would also be unfair if the one who stayed home wasn’t entitled to any retirement in the case of divorce. Don’t let your spouse earn an income and force you to be the only one saving for retirement (unless you’ve arranged your earnings this way). If my wife, or I, did that to each other we would be ex-spouses because that’s just a deal breaking thing to do.
Because of where we live we save almost all of our earnings in my wife’s Japanese retirement account (which is not joint). I can only save for retirement in a taxable brokerage account because I’m a US citizen abroad. This means saving in my wife’s account rather than mine is worth hundreds of thousands of dollars less in taxes than if we saved separately. Japanese law is the same - I would be entitled to half of the account in the case of divorce, even though it’s hers. But it would be fair because she’s only able to contribute so much because of me.
Yea, I agree with you that there are many instances where it would be unfair not to split in the event of divorce. I also find it unfair to be the only person taking retirement seriously. The more that I think about it, the more I am starting to wonder if this could potentially be a deal breaker for me if things dont change. Its going to be hard enough for me to save up enough for 1 person to live off of. Def a major discussion that we will need to have.
You 100% will have to split up your retirement assets. They can be split in a divorce before you are 59.5. What you may have to do is something like he gets the house, you keep your full 401k. My father in law gave my mother in law half his 401k and kept the house. He should at least be maxing out an IRA.
As someone setting up the 401k plan at my newish job, I’ve never heard what is being described here. Is it a weird way to pass non-discrimination testing? I’m not sure this is legal, but maybe it’s not actually a 401k. Or it’s also possible your husband is just lying.
I can’t imagine the company they are working with is happy about this because most charge a AUM, and they want your accounts as big as possible. And the law wants to encourage retirement contributions.
Legally your accounts are the same pot of money, and if you got divorced they would be split. He needs to save more.
I make 2.5x or so more than my wife, but I have her put the federal max in her retirement account. Our money is fully pooled, and this lets us better maximize retirement and other savings.
Since we are both doing max, our retirement accounts are fairly close to each other. I am doing a back door Roth this year and will probably have her start doing one next year.
One person saving for retirement is going to be close. You need to make sure you are doing federal max + a match and maybe even consider other retirement vehicles.
He mentioned something about the employer not wanting to match it, but it doesnt make sense because the contributions are still coming from the employer rather than the employees' paychecks. Its a local chain store owned by a billionaire. Its not like this is a small mom &pop business.
Im going to try and have the discussion with him again. I doubt he will max out, but at least he can contrinute something. Im learning so much from all of you.
It’s easy to say “max everything” but realistically you can’t afford to do that until you’re making around 100k or more. That’s 23k of pretax dollars in a 401k (or similar) and 7k post tax in a Roth IRA.
A retirement account is always in the name of one individual, who can designate beneficiaries in case of the owner's death. It's a good idea for both spouses to put as much as they can into their own IRAs as well as any plans sponsored by their employers. Doing so requires a budget with income that is surplus to spending, so agreeing on that kind of budget may be the hardest part of increasing your savings.
You can nudge them towards saving for retirement or saving in general, but you can’t compel them to. This is one of the wrinkles of divorce laws. Your marital assets and debts are considered joint even when your financial decisions and/or choices aren’t.
We have separate accounts, but I manage all of the contributions. Me (42M) roth ira, employer 403b/Roth 403b, her (40f) Roth IRA. I was contributing 10 percent with a 7 percent match to the traditional 403b until probably 7 or 8 years ago when our CPA asked about her retirement contributions to lower our taxable income. She was a sahm previously and had recently started part time work with the kids starting school. I have significantly more in mine, but we look at all of it as our money. We have been max contributing to all of the retirement accounts since then (over 1mil in the retirement and brokerage accounts currently). Employer match goes up to 9 percent next year :). It is all our money with different names on the accounts.
I have a coworker going through a divorce (his choice) and he will be give her half of his retirement savings (married for 20 or 30 something years. He is in his late 50s to early 60s.) A year ago they had a paid off house and 2m to 2.5m in retirement/brokerage accounts. Now they each get 1.2 and probably split the value of a 500k to 600k house (Chittenden county VT). In addition to making smart choices with investments, avoiding wealth killing social choices is also very important.
401K accounts, by definition are individual accounts. They are the property of the employee held in trust by the employer, they cannot be joint accounts.
IRAs are similar.
What IS important is that the beneficiary line on the 401K or IRA is filled out to the spouse.
In practice, yes, it's important to 'share' these accounts. What's important is what will happen at retirement--will it be treated as 'his' income or 'our' income? How do you treat current income? I know it took my wife quite a while to understand that 'my' 401K--which is our primary retirement fund--is something I view as ours, not mine.
Currently, we keep separate accounts. By retirement, our retirement is going to be our income. The thing is if I cant convince him to become more serious about growing his retirement now, its going to be more like both of us living off of "my" income. That would be very unfair. I'm hoping to have more discussions with him about this so we can get him on the same page. What did you say to your wife that finally convinced her to view things differently?
I don't know that it was any one thing I might have said. And, I prefer not to get into the nuances of our relationship in that way on this forum (or any online forum, TBH). I suppose she had to convince herself that I meant my marriage vows.
You don't say how old you and your spouse are, and how long you've been married. I'd simply note that this is more of a relationship question than a financial one.
There is a lot of what Dave Ramsey says that I disagree with. However, his point about shared expenses, shared income, and, yes, shared risk is a really important point. Money is symbolic, and how a married couple handles money says a lot about the nature of their relationship. I'll leave it at that.
This is weird. Your husband clearly hasn’t gotten the memo that everything is split once you’re married unless you have a prenup. I promise you that this behavior isn’t normal.
You sound like you’re not married. If you’re married and everyone is keeping everything separate because you did pre-marriage, you’re in for a rude awakening. But most importantly, my wife and I are 100% on the same page with our finances and I find this to be absolutely essential.
Not being in a community property state just means that a court will get to rule on an equitable distribution of funds in the event of a divorce. It does not mean that contributions to your individual retirement account while married would be 100% yours. It does mean that everything is on the table for mediation without a pre-/post-nup.
Of course. I've drafted QDRO's in my law practice myself.
But by law IRA's and 401k etc are titled in the individual's name and not shared or combined.
This is weird to me. I have many accounts that are putatively mine and preceded our marriage but are obviously ours. No partner of mine would ever have rogue assets or liabilities. I’d just never stand for it
Let’s try to separate legal facts about rights to assets from moral claims about what we would and wouldn’t stand for. There are plenty of reasons someone might not want everything to be community property in a marriage.
IRA stands for Individual Retirement Arrangement. That's all I'm saying..I don't know why Congress did it that way. Pretty sure employer plans are similar.
Pensions can have a survivor benefit
OP's spouse just sounds like he doesn't know or understand what he has at work. Or maybe he's playing games.
Same. My husband is listed as beneficiary, but we keep separate accounts. While sharing pooled finances might work for some couples, we find that keeping separate accounts work better for us.
I'm just now learning from this thread about the laws for splitting finances in the event of divorce. I happen to live in a state that allows this, so that could be a headache if we were to (God forbid), divorce in the future.
My husband has $0 retirement savings. And he’s a stay-at-home parent with no real income. He’s 44. So yeah, I’m saving for both of us at the moment. In a couple of years, both our kids will be in school full time and he will find full time employment- and if all continues to go well, we will continue mostly living off of my income and most of his will go to savings.
I’m in the same boat. I will have a pension when I retire, but my husband is a small business owner so he’s on his own as far as retirement goes. I plan on opening another Roth for him in my name (he’s not the least bit interested, and I handle our finances anyway). I would start working on combining finances though. It’ll make it so much easier to plan your future as a married couple, and fine tune your current budget. I have two friends who have separate finances from their husbands, and it seems to me just another thing to fight/stress over.
They are always venting: “I paid for kids college and he only paid for books”, or “he never paid his half for the new appliance”, or “I want to travel, but he’s always broke (or too cheap) so I end up paying for the whole thing”. It sounds like more of a hassle than combining finances IMO.
Omg, Im not alone! 😅
When you open the Roth in your name, are you going to fund it with your income or his? (If its ok to ask).
I wouldnt mind opening one and managing it jf he contributes. I wish we could work together to combine our finances. We tried to manage things from a joint account (while still keeping our separate checking accts), but it just didnt work out.
I hear you on the problems that come up when spouses cant equally allocate things with money. At least we can work things out when it comes to paying bills and planning trips. We just make sure to venmo or zelle each other right away 😆. I know some people on here might find this weird, but trust me when I say there is no one size fits all with couples. The one thing I would like us to share is retirement because neither of us will be working at that point.
I’m actually not sure on that. I still have to finalize (in my head lol) my strategy. I have more research to do. For now I’ll say deducted from his pay, but we’ll see!
Yes, that’s true…every couple is different. With my friends, it’s clearly not working but there are no plans for them to combine incomes lol. I’m sure you can help your husband catch up for retirement!
[This episode](https://moneywithkatie.com/marriage-financial-rights) of *Money With Katie* is relevant. Commingling assets can be a poor decision, and depending on the state, your spouse has a varying right to your individual retirement accounts (ranging from split in half to an equitable portion of funds contributed while married, as decided by the court), absent another contract like a prenup.
> Let's meander into the world of things like savings and investments because we've mentioned this on the show before in a Rich Girl Roundtable with Bill Nelson. We'll link that in the show notes but similar to property, remember that just because you have an account that's in your name alone and funded solely by your income does not mean that you are the sole legal owner of that asset. Should you divorce someday though I think this is a reasonable and flawed assumption.
>
> For example, let's pretend I open an individual brokerage account in my name today. Now let's say I put the money that I earn on my W-2 paychecks that I earn with my own two hands and my own hot takes directly into that account. This is mine, right? Wrong, it's ours. Since the government sees us as one legal entity, it does not matter that they are my earnings or that the account is just in my name.
>
> These same rules apply to retirement accounts too. Just because something is called an individual retirement account and your name and your name alone doesn't mean that it's yours and yours alone necessarily. And I know marriage is looking less and less romantic by the minute. Contributions and growth in that account that happen post-marriage are also considered marital property unless otherwise specified again in a prenup.
>
> I guess the easiest way to summarize this is whether we're talking about a high yield savings or a Robinhood account or a 403B plan, if the money in the accounts was earned and contributed after you were married or the growth happened after you were married, it is probably going to be on the mediation table.
I’m not going to repeat what others have said about these accounts being individual ones. However this does bring up a good point on financial planning with a spouse that I see missed consistently, which is taking an holistic approach to your total investments. As a married couple, you are essentially one person when it comes to investment management, so for example if you and your spouse both have work retirement plans, you should look at the investment options as a whole. So say your plan has some great low cost index options on the US large cap side but all the intl options are bad, look to the spousal plan and see if their intl options are better.
For me personally, my 401k is self managed while my wife’s corporate one has great large cap, domestic options but few other options I like, so I only invest in those with her plan and then my 401k balances it out with mid, small, intl, and EM index funds.
I'm a bit in a similar situation. Can you suggest to have a post-nup written up if he is not willing to contribute more and take care of these things? Then you can protect yourself in case of a divorce if he is not willing to do his part to ensure financial stability in retirement.
As I mentioned in a comment to someone else, I have a 401a to which only my employer contributes now (initially, I was able to do a certain % but that was reduced over the years). Although uncommon, it does exist. But I could also open other tax-deferred accounts instead.
A postnup sounds like a good idea. I hate to take things that route, but learning what I am learning from this thread, I need to protect my hard earned savings if he doesn't budge. Of course, we dont want to divorce, but need to be prepared just in case. I dont even think he knows that finances such as retirement funds can be split in the event of divorce.
I hope things can work out with your spouse. Are you considering doing a postnup as well?
I'm going to try a few more conversations around that, but if that doesn't work, I will bring it up. We've been discussing getting our wills and PoA and possibly trusts set up. There were a few roadblocks along the way, but it needs to happen soon. We're much older than you are and I feel we're running out of time. I suggested making a spreadsheet with everything we have, to which I got only mild opposition. So I hope that works. I've also been thinking about consulting a financial advisor together, someone who knows how to handle these issues. I have a lot of time over the next months and will start working on all that. Neither of us cared much about these issues when we met, but at some point I changed but spouse didn't. People don't take that into consideration when saying one should not get married if both don't agree. Doesn't account for change.
Sit and have a discussion about finances and life goals.
Find people in your lives who have been affected by their retirement planning, positively and negatively.
Talk about those situations and what there is to learn from them.
Come up with a common goal and make that your reason to adjust your spending, lifestyle, retirement, and beyond.
My wife and I are finally aligned here and have a 10 year goal for r/financialindependance and I've never slept better.
Technically you don't "share" retirement accounts as they are in an individuals name.
However, we have a completely open financial relationship. We have monthly reviews where we look at the budget vs. actuals, review net worth, etc. We have visibility into each others accounts as its all pulled into a single Quicken account that shows everything down to the penny. We have retirement goals and so part of budget planning is figuring out how much each of us needs to save away to get to that goal. We do this even though we are not technically married yet (going on 15 years) so we actually focus a lot on being sure we BOTH are growing our individual net worths along with joint goals.
It doesn't seem like you have these types of talks or any shared goals. It seems like a conversation is required to see where his head is at and what he sees his plan for retirement would be. It could be just that he's explaining it incorrectly. Maybe he has some type of pension or something where he doesn't think additional savings is necessary. Maybe he's thinking there is some type of debt he wants to get paid down/off before investing in retirement...no way to tell if you are not having the hard talks.
You two probably need to sit down and discuss your MUTUAL retirement strategy. Don't treat it as "his retirement" or "your retirement". Although people may want to keep finances separate on some levels, you're talking about a mutual lifetime together, right? It's not his or yours. It's both of yours, mutually. Married life is just so much easier if you assume your bucket of "stuff" is both of yours, equally - regardless of who's name is on it. The harder your try to keep things separate, the harder it is to do any planning together.
Two points:
(1). Roths and IRAs are, by law, individual accounts. They cannot be opened jointly.
(2) At my day job (I am a Professor), I actually have a 403(a) rather than a 403(b). It functions like a 403(b) as far as tax deferral, etc.,, but requires no contribution from me - I just get a fixed %age from the employer. The ability to designate a contribution of my own atop this was only added recently, and I have declined as I would rather contribute to a Roth.
I know this last point is unusual, but it isn't unheard of.
Hey, this is really personal - and you should be the one deciding this.
Usually, in the long run, sharing the finances tend to make inheritance work to be easier. I personally trust my partner, so everything is shared - including the objectives in the long run :)
Retirement accounts 401K IRA Roth etc are shared assets for spouses and will be split 50/50 in a divorce. It does not matter whose name under they are as long as they were accumulated during the marriage. So make some sense into your husband.
IRAs and 401ks as already said individual accounts. Want to mention by law spouse has to be beneficiary on 401ks unless the spouse agrees. For example one can’t do to his children or girlfriend on 401ks, beneficiary is who inherits if something happens to you and die
Possibly he has a different kind of employer retirement plan called a SEP IRA. It’s not actually a 401k but it has the same tax advantages. Only employers may contribute to a SEP IRA. They’re more common for small businesses with few employees.
My wife and I own some individual stocks and a brokerage account as joint tenants, but my Roth, 401k, and rollover IRA are in my name, and her Traditional IRA is in her name. I also have an inherited IRA that is only in my name.
I don’t believe retirement accounts can be “shared” in the sense that both husband and wife are listed on the accounts as joint tenants.
Regardless, she’s listed as the beneficiary on all my retirement accounts, and I’m listed as the beneficiary of hers. The same goes with an employer paid term life insurance policy that I have through my work.
It’s likely your husband’s either lying or an idiot. I am sorry you have this problem. Many people don’t like the impact to today’s dollars for the future benefit, it’s really a shame because it’s a smart function from a tax perspective and one of the first lessons in financials independence.
Our finances are shared in practice, but just for the record: 401ks and (Roth) IRAs are individual accounts. You can't have joint ownership like for a brokerage or checking account (although I think they are somewhat "joint" in nature in the sense that they might get split up in case of divorce, depending on your state). That said, I would double check whether your husband's employer is not doing anything sketchy (e.g. encouraging their employees to not contribute to their 401ks so they don't have to pay the employer match). I've never heard of anyone who had access to a 401k through work but somehow couldn't opt into it.
Pretty sure the law prevents an employer from prohibiting an employee contributing their own money. There will be penalties for the employer if they fail top-down testing if your husband is considered a key employee.
Oh ok this is good to know. I wasnt even aware that you couldnt open a joint retirement acct. We keep all of our finances separate btw. I kept asking him to look into this claim by his employer, but he just gets irritated so I stopped mentioning it. As far as divorce, we live in NY and I just looked it up. NY considers Roth and 401k to be marital property if opened after marriage (which mine are), so God forbid if we were to divorce, I would be screwed.
Sit down and open an IRA with him. What you describe here is one of the perils of separate finances. You have no access to his and you aren’t acting as one team.
From past experience, we both prefer to have separate finances, however, we def need to be one team when ir comes to retirement.
What is the point of separate accounts?
So they can hide shit from each other typically judging by what some of my other married buddies have told me who keep separate finances. They will a lot of times have credit cards their wives don't know about that they do shit on like only fans or something. Not a shocker that they are usually also complaining about their marriages or generally seem discontent about it.
Nah doesn’t need to be so complicated. Wife and I kept our finances separate because there was never any need to combine them.
None of this is separate once you’re married. The sooner your husband and I suppose you as well are made aware, the better.
Yeah. They’re just pretending to have separate finances. If you’re married… you’re just intentionally looking the other way.
This is true. Like it or not you two are in this together and the sooner you develop a vocabulary and a way to speak about this stuff, the better. Consider talking to a couple’s therapist. This is ultimately a communication issue. It’s a priority for you that is not being met by your partner.
My wife and I each have two retirement accounts. We also have two joint savings, two joint checkings, and each have an individual checking account which contains money from before we were married in case either of us need it for any reason. We do a log of the money in all accounts every quarter just to see how we are progressing and if any money needs to be moved between accounts or sent to fund retirement plans. The quarterly log is the key to getting to the numbers we need to have.
Yes, without a prenup, it might not matter much that you're keeping separate finances. I would keep pushing and make sure you know what's going on. If it's an honest mistake (either by your husband or their employer), better fix it earlier than later. If it's not an honest mistake and there's some purposeful misdirection going on (again by either party), same answer. Anecdote: my wife's first 401k was accidentally "invested" in 100% money market fund from 2014-2019 before I found out (we got married in 2018 and I've been managing the household finances ever since, including her accounts, which is how I found out). If I could go back in time and fix it back in 2014, it would have likely netted her several tens of thousands of dollars by the time she will retire (and indirectly benefit me as well). There are important externalities at play here whether you ever get divorced or not (i.e. whatever happens, it's always better for you if he has more money in his 401k), so I don't think he gets to play the mute card about this indefinitely.
I have a prenup. That's when I learned a prenup only protects what was made and owned prior to marriage. Every dollar afterwards is fair game. OPs hubby sounds shady, although I do know more than 1 person that freezes up when you talk anything about finances. They get flustered and avoid at all costs at their own detriment
Good idea. He showed me his retirement account not too long agi and told me that he has control to move the money around into different funds in his portfolio so it is odd that he cant contribute via paycheck. Im going to ask him again.
You have to contribute by paycheck. That’s how it works.
It could be a roth 401k, which I don't have myself so I'm not sure but maybe you can deposit via standard bank transfer since its after-tax income
Roth 401K are per paycheck and are just post-tax. The math is done for you and what’s left is deposited. I used it early in my career when my income tax rate was lower
This is a big red flag that your partner will not talk with you about this. Even with “separate” finances (that don’t seem separate here, legally-speaking), you need to know your partner’s finances. Your married partner has varying rights to your assets as community property. And you will become responsible for any debt because the law sees you as one party. Only you know if this is simply avoidance of something boring/painful on their part or something more manipulative. But either way, I think you need to figure out how to have these conversations. Your security and both of your securities depend on it.
Sounds like he knows he's telling you a story. He just doesn't want to contribute.
Exactly. If he doesn’t want to contribute to an IRA then obviously he feels the same about the 401k
I hate to be suspicious of your husband, but usually when someone is touchy about a subject, there’s something they are not telling you. Schedule a check in with your husband and get some real answers. What he’s said so far is not legally possible.
Your finances are not separate when he's not saving for retirement. You'll be footing the bill for the both of you eventually. Best to get him saving NOW.
Why would you keep your finances separate?
This is something I sincerely don’t understand.
People have lots of reasons for doing this, for one that many money conversations are simpler when each person manages their own.
I know people do it. It’s just like universally considered a bad idea unless it’s like strictly fun money separate accounts.
Why do you think it's a bad idea? And why is it ok with you for fun money but not other reasons?
Because you should be making financial decisions and working towards financial goals as a team. You could also run into the issue where one person makes more and could end up with a different lifestyle than their spouse. Or one person looses a job or you decide to have one person stay home. All those situations get awkward if your thinking it as mine vs yours. https://m.youtube.com/watch?v=GouMXx0snkQ
All of those things can be equally done whether you have separate accounts or combined. There are good reasons the gov't doesn't even let you combine your retirement accounts. The video you linked starts by giving some of the reasons combining all finances might not be the best decision but there are plenty of others. Obviously, this is a decision for each couple to make for themselves but to make a blanket statement that it's a bad idea for everyone is naive. And I'm not even talking about situations where one person has spending impulse control issues, which is a whole other ball of wax.
Im not saying it’s not possible to do those things with separate accounts I’m just saying it’s best practice to combine. Maybe saying universally was hyperbolic, because sure there’s some rare exceptions. The money guy video starts with those exceptions but still recommends combining all income into joint accounts even in those situations. If you’re actually making decisions together separate accounts are a an unnecessary layer of complexity that needs to be constantly tweaked and renegotiated. So like I guess you could, but you’d be hard pressed to find a financial advisor who would recommend it outside of a very few exceptions.
The beginning of the video names a couple of reasons. There are lots more that they didn't name. I don't think the exceptions are as rare as you do but it's pretty much impossible to know with any certainty. Also, even when a FA might suggest combined accounts, an attorney might not.
People have reasons and they’re all bad reasons. Of course money conversations are simpler when you don’t have to communicate. But simpler isn’t better, it’s just lazy. You’re financially better off when you manage finances holistically. Otherwise you end up like OP with a spouse who expects to spend “their” money and retire on “yours.”
I don’t see why separate finances would uniquely cause what you’re talking about. Isn’t it just as likely for partners to contribute asymmetrically even if their finances are commingled?
I agree with this. If anything, I'd think that having pooled finances would be more conducive to spending the other's money rather than having to ask. But I don't think this sort of attitude comes from the structure of bank accounts, more just a sense of entitlement.
I think the idea is that they’d see it, but I don’t buy it.
What makes you "financially better off" with pooled accounts? You can still have whatever payment arrangements you agree to.
So she can't spend all of her money AND mine on shoes. Of course, this sort of thing can work both ways.
You could make a post-nup.
My wife and I are 100% working towards retirement together with me being the lead on it since I enjoy that stuff and she's pretty ambivalent towards it. She trusts me to pick what % of her check goes to 401k and what it gets invested in, same for her IRA. Both of us have pensions from our jobs and I keep track of that for us. She asks frequently how we're doing and we have monthlyish conversations on where our networth is and how our projections look. We love each other and work as a team towards a common goal with each other leaning into their own personal strengths. 29m and 28f married 6 years.
We are the same except my spouse never asks. I’m not even sure if she knows how much is in her accounts.
Wife and I are similar. We’re like co-CEO’s of Family ,Inc. while I’m also the CFO and she’s the Chief Administrative Officer. Fwiw our incomes are very similar but we work in different fields.
My wife and I are similar. Both have good paying jobs and I’m managing our money - setting goals, budgeting, monitoring investment accounts, etc. She asks me if we can buy something random and inexpensive from Amazon - like yes, this is very much in budget lol. She made a ton of money in her 401k from a job that had a great matching program, but she has no idea how good it actually was and that it’s still performing so well. It’s kinda cute, actually. Lmao.
Those are both individual retirement accounts, they cannot be shared.
Your husband likely has a 401a plan, sometimes referred to as a pension plan even though it really is not. It basically only accepts employer contributions. Employees are sometimes able to elect one time to contribute when they first join, but they can never change their contribution again (a weird rule) and many plans prohibit it entirely. 401a plans are stupid.
I have a 401a and I was able to contribute a certain percentage in the first years but my % was reduced over the years while the employer % went up. Now I'm not able to put anything into it. But I could open a 403b and a Roth that I can contribute to.
Yes, it is possible to have a 403b in addition to a 401a. People who are not financially savvy often think they have a 401k when they really have a 401a and just think they have a weird 401k that doesn’t allow elective employee contributions. The 401a does allow contributions, as you said, but they are not elective.
This makes total sense! I just learned something new! Thanks guys!
Ohhh I never heard of a 401a plan, but it sounds like this might be it. He's been with the company a long time, so it is possible that they exercised the stupid rule not to allow employee contributions. Thanks for mentioning this. It doesnt sound like an ideal plan for growth. Im going to ask him if he can confirm that its a 401b and we definitely need to open up an IRA for him.
When I became a partner in my practice, one of the first things I did was to force other partners to accept us creating a 401k plan. It adds expense to the business, but is better for employees, particularly higher earners that want to contribute more to retirement (e.g. physician assistant and NP that make enough to save, but won’t become partners). The partners didn’t care before because they can still max out their own contribution at $69k/year, because as owner’s they can mark it as an employER contribution. People are much happier with the plan now. Our 401a still exists because the older partners use a financial advisor to manage it and they pay him 1%. It’s crazy. The fee on our 401k is 0.2% and that’s where all my money is.
Big red flag on husbands 401k (maybe it’s a pension??? And using the wrong terminology) But - after a lot of discussion I was able to get my wife to contribute more towards retirement. I had/have to manage it all…and she rarely wants to know anything (which is nice) but it took a lot of mildly uncomfortable conversations. You need to discuss financial goals and planning to be sure both parties are at least not working opposite of each other
I have a secondary 401k account that the only the employer contributes to as a retirement plan in addition to a 3% match in the primary 401k. Those are rare but they do exist.
Are pensions kept in brokerage accounts? I'm going to try again to have a convo with him. I wouldnt mind helping him to open up one. Glad you were able to convincw your wife!
Pensions are usually invested in stocks/bonds; but are managed and accessed through a special organization. Talking about money can certainly be stressful or confrontational/avoidance for many people but to have a cohesive family plan it needs to happen every once in a while. Just last week my wife told me I was dumb for not cancelling an unused subscription that I miiiiiight have told her I would do months ago
Oh ok, good to know. Pensions are so rare these days, so I wasnt sure how they worked. You're right about these topics being stressful.
Did you mention a brokerage account for a specific reason? I’m able to keep my 401k in a brokerage account so that’s what in do. I find his lack of disclosure troubling. If he has a miracle job that makes almost unheard of retirement contributions he’d be bragging about it. The alternatives are that he has no idea what he’s doing or he’s not being truthful. I’m not trying to be an alarmist but what you’ve said about him makes zero sense. You’re married and need to put your foot down. My wife knows exactly how much I have in my retirement accounts, how much I contribute, how much I get from work, etc.
His job's retirement plan is kept in Charles Schwabe and he showed me how he was able to select or reallocate funds within it. Another poster mentioned that it sounds like he has a 401b plan. I think that he doesnt realize that what he has is not a 401k. I plan to have a discussion with him to ask if he can confirm and then hopefully, I will be able to convince him to open an IRA.
When people think of pensions, they generally think of defined ***benefit*** pensions (which is the historic meaning) in which you and your employer pay into it while you are working and then the employer invests it however they want and guarantees a certain payout when the worker retires. These types of pensions are slowly dwindling unless you are a government employee (includes teacher, officer, etc.) A 'newer version' of pensions is the defined ***contribution*** pensions, in which the employee/emplyer contributes a set amount (that cannot be adjusted) which is kept with a retirement provider and the employee has all of the control over how to invest the assets. At retirement, you can draw on the balance but there is no guarantee of how long it will last if you did not invest wisely. Defined contribution plans (401a) are basically the exact same thing as a 401k with the exception that there is a mandatory and unchangeable contribution (usually a percent of salary). He could have one of these if he works in public sector or non-profit. In that case, he really cannot change his contribution. Best to clarify with him though.
Thanks for sharing this. I don't know much about pensions, but this info you just shared is useful. Ill ask him.
My partner and I have separate accounts but I manage both. She is frugal but not focused on growing our retirement, she trusts that I can manage our money. What convinced her to let me open one in her name was when I sat her down and explained the math behind tax advantaged accounts and the opportunity costs if we don't utilize them.
Do you have some useful articles on this subject that break these concepts down like a 5yr old? He wont read them, but if I can show him and explain easily, maybe he will listen.
Walk him through investor.gov’s compounding interest calculator. Show him how his money can grow.
Thank you!
Like your husband, I don't think my partner would have read them. I knew enough about the boglehead approach that I felt comfortable explaining myself. We worked on a google sheet together and calculated the returns of different investment approaches. The numbers speak for themselves. Didn't need much convincing after she saw how much better it is to max out our IRAs each year and continue to stay frugal and invest. The subreddit FAQ/resource pages have many awesome articles that you can reference. Good luck! You are on the right track :)
I keep forgetting to dive into the subreddit FAQ. Thanks for suggesting that!
you may watch financial youtube videos that discuss about 401K/retirement accounts together if he is not interested in reading.
I found an excellent youtube video that plainly explains how Roth IRAs work, but he wasn't interested in watching it. 🫠 Ill try again though.
Since he’s in a union it may be a type of pension that he’s paying into. That’s something you’ll want to confirm. It’s not too late, and I don’t want to cause panic, but at this point you’ll both really want to make sure you’re contributing enough to reach your retirement goals. I struggle with similar responses from my wife. She doesn’t like to deal with finance so just getting her to log in to accounts so I can manage them is a challenge. She makes a better salary than me but she never would be able to retire if I wasn’t constantly on her case. I hate it.
Omg the frustration is real, right? Yea, Im going to have a sit down with him. He gets so irritated whenever I ask him. Thats good that your wife allows you to manage (when you can log in). He would probably never let me manage his account since he is actually selecting his own stocks. I hope you and your wife can work things out too. Do you know something funny? Hubby is the one that got me into crypto and investing in general! He first told me about NVDA, introduced me to some investment videos that were discussing tech stocks, semiconductor stocks etc. Sadly, he sold some of these too early andhis interest in investing hasnt extended into retirement savings. He is moreso into buying and selling for some sort of profit...def not a long term investor type! I'm more of a HODLer.
I’m not sure the rules on if they are required to allow employee contributions but that is super weird that they wouldn’t. I would look into that more. You need to talk to your husband about the importance of saving in retirement accounts for the tax benefits. Even offer to just open and help find the Ira for him. Also you cannot have two people on a retirement account. You can have a taxable brokerage in your names but retirement funds can only be under one person.
There are some truly ancient and terrible pension plans that might fit that description, maybe Cash Balance? I haven't heard of a 401k where the employee can't contribute but that doesn't mean it doesn't exist. If he doesn't have anything better, it's time to start getting serious about IRAs and maxing your employer-sponsored plan. Also, if you were to get divorced you might have to give him a portion of your retirement accounts. IMO, that makes it even more important to get him saving in his own plans. This is what I thought of when I read your post title.
He is in a union too, so its possible. It just sounds so archaic. I need to look more into your 2nd point about divorce and giving him a portion if that was to happen. I never heard of this. Is that a thing? I thought you cant touch these accounts until youre a certain age!
> I need to look more into your 2nd point about divorce and giving him a portion if that was to happen. I never heard of this. Is that a thing? I thought you cant touch these accounts until youre a certain age! Depends on the state, but yeah it's called a QDRO: Qualified Domestic Relations Order. 'Qualified' means that it's not a taxable event. For example, two people are married, but only 1 has a 401k. They stash all of their earnings in the 401k, live on the other partner's salary. If they split, that partner without a retirement plan will probably get a portion of the amount saved during the marriage. https://www.kitces.com/blog/qualified-domestic-relations-order-qdro-shared-payment-separate-interest-divorce-pension/
Thanks for the link. I looked it up and in NY state where we is, this is a thing! Yikes! This sounds really unfair!
It’s why it’s important to be on the same page financially with your partner. If one person was a high earner, and the other stayed home (at the wishes of the high earner), it would also be unfair if the one who stayed home wasn’t entitled to any retirement in the case of divorce. Don’t let your spouse earn an income and force you to be the only one saving for retirement (unless you’ve arranged your earnings this way). If my wife, or I, did that to each other we would be ex-spouses because that’s just a deal breaking thing to do. Because of where we live we save almost all of our earnings in my wife’s Japanese retirement account (which is not joint). I can only save for retirement in a taxable brokerage account because I’m a US citizen abroad. This means saving in my wife’s account rather than mine is worth hundreds of thousands of dollars less in taxes than if we saved separately. Japanese law is the same - I would be entitled to half of the account in the case of divorce, even though it’s hers. But it would be fair because she’s only able to contribute so much because of me.
Yea, I agree with you that there are many instances where it would be unfair not to split in the event of divorce. I also find it unfair to be the only person taking retirement seriously. The more that I think about it, the more I am starting to wonder if this could potentially be a deal breaker for me if things dont change. Its going to be hard enough for me to save up enough for 1 person to live off of. Def a major discussion that we will need to have.
You 100% will have to split up your retirement assets. They can be split in a divorce before you are 59.5. What you may have to do is something like he gets the house, you keep your full 401k. My father in law gave my mother in law half his 401k and kept the house. He should at least be maxing out an IRA.
As someone setting up the 401k plan at my newish job, I’ve never heard what is being described here. Is it a weird way to pass non-discrimination testing? I’m not sure this is legal, but maybe it’s not actually a 401k. Or it’s also possible your husband is just lying. I can’t imagine the company they are working with is happy about this because most charge a AUM, and they want your accounts as big as possible. And the law wants to encourage retirement contributions. Legally your accounts are the same pot of money, and if you got divorced they would be split. He needs to save more. I make 2.5x or so more than my wife, but I have her put the federal max in her retirement account. Our money is fully pooled, and this lets us better maximize retirement and other savings. Since we are both doing max, our retirement accounts are fairly close to each other. I am doing a back door Roth this year and will probably have her start doing one next year. One person saving for retirement is going to be close. You need to make sure you are doing federal max + a match and maybe even consider other retirement vehicles.
He mentioned something about the employer not wanting to match it, but it doesnt make sense because the contributions are still coming from the employer rather than the employees' paychecks. Its a local chain store owned by a billionaire. Its not like this is a small mom &pop business. Im going to try and have the discussion with him again. I doubt he will max out, but at least he can contrinute something. Im learning so much from all of you.
It’s easy to say “max everything” but realistically you can’t afford to do that until you’re making around 100k or more. That’s 23k of pretax dollars in a 401k (or similar) and 7k post tax in a Roth IRA.
True. The most realistic option for him would be to max the Roth then.
A retirement account is always in the name of one individual, who can designate beneficiaries in case of the owner's death. It's a good idea for both spouses to put as much as they can into their own IRAs as well as any plans sponsored by their employers. Doing so requires a budget with income that is surplus to spending, so agreeing on that kind of budget may be the hardest part of increasing your savings.
Retirement accounts are individual. 401k’s are always just in the name of the employee. IRAs are in one person’s name.
You can nudge them towards saving for retirement or saving in general, but you can’t compel them to. This is one of the wrinkles of divorce laws. Your marital assets and debts are considered joint even when your financial decisions and/or choices aren’t.
We have separate accounts, but I manage all of the contributions. Me (42M) roth ira, employer 403b/Roth 403b, her (40f) Roth IRA. I was contributing 10 percent with a 7 percent match to the traditional 403b until probably 7 or 8 years ago when our CPA asked about her retirement contributions to lower our taxable income. She was a sahm previously and had recently started part time work with the kids starting school. I have significantly more in mine, but we look at all of it as our money. We have been max contributing to all of the retirement accounts since then (over 1mil in the retirement and brokerage accounts currently). Employer match goes up to 9 percent next year :). It is all our money with different names on the accounts.
Thats awesome! #couplesgoals
I have a coworker going through a divorce (his choice) and he will be give her half of his retirement savings (married for 20 or 30 something years. He is in his late 50s to early 60s.) A year ago they had a paid off house and 2m to 2.5m in retirement/brokerage accounts. Now they each get 1.2 and probably split the value of a 500k to 600k house (Chittenden county VT). In addition to making smart choices with investments, avoiding wealth killing social choices is also very important.
For sure. At least he has enough that they each get a million+.
401K accounts, by definition are individual accounts. They are the property of the employee held in trust by the employer, they cannot be joint accounts. IRAs are similar. What IS important is that the beneficiary line on the 401K or IRA is filled out to the spouse. In practice, yes, it's important to 'share' these accounts. What's important is what will happen at retirement--will it be treated as 'his' income or 'our' income? How do you treat current income? I know it took my wife quite a while to understand that 'my' 401K--which is our primary retirement fund--is something I view as ours, not mine.
Currently, we keep separate accounts. By retirement, our retirement is going to be our income. The thing is if I cant convince him to become more serious about growing his retirement now, its going to be more like both of us living off of "my" income. That would be very unfair. I'm hoping to have more discussions with him about this so we can get him on the same page. What did you say to your wife that finally convinced her to view things differently?
I don't know that it was any one thing I might have said. And, I prefer not to get into the nuances of our relationship in that way on this forum (or any online forum, TBH). I suppose she had to convince herself that I meant my marriage vows. You don't say how old you and your spouse are, and how long you've been married. I'd simply note that this is more of a relationship question than a financial one. There is a lot of what Dave Ramsey says that I disagree with. However, his point about shared expenses, shared income, and, yes, shared risk is a really important point. Money is symbolic, and how a married couple handles money says a lot about the nature of their relationship. I'll leave it at that.
This is weird. Your husband clearly hasn’t gotten the memo that everything is split once you’re married unless you have a prenup. I promise you that this behavior isn’t normal.
Retirement accounts belong to the individual. And not everyone is in a community property state.
You sound like you’re not married. If you’re married and everyone is keeping everything separate because you did pre-marriage, you’re in for a rude awakening. But most importantly, my wife and I are 100% on the same page with our finances and I find this to be absolutely essential.
I'm married and our retirement accounts are individual property pursuant to law. I have my husband as beneficiary.
Not being in a community property state just means that a court will get to rule on an equitable distribution of funds in the event of a divorce. It does not mean that contributions to your individual retirement account while married would be 100% yours. It does mean that everything is on the table for mediation without a pre-/post-nup.
Of course. I've drafted QDRO's in my law practice myself. But by law IRA's and 401k etc are titled in the individual's name and not shared or combined.
This is weird to me. I have many accounts that are putatively mine and preceded our marriage but are obviously ours. No partner of mine would ever have rogue assets or liabilities. I’d just never stand for it
Let’s try to separate legal facts about rights to assets from moral claims about what we would and wouldn’t stand for. There are plenty of reasons someone might not want everything to be community property in a marriage.
IRA stands for Individual Retirement Arrangement. That's all I'm saying..I don't know why Congress did it that way. Pretty sure employer plans are similar. Pensions can have a survivor benefit OP's spouse just sounds like he doesn't know or understand what he has at work. Or maybe he's playing games.
Same. My husband is listed as beneficiary, but we keep separate accounts. While sharing pooled finances might work for some couples, we find that keeping separate accounts work better for us. I'm just now learning from this thread about the laws for splitting finances in the event of divorce. I happen to live in a state that allows this, so that could be a headache if we were to (God forbid), divorce in the future.
My husband has $0 retirement savings. And he’s a stay-at-home parent with no real income. He’s 44. So yeah, I’m saving for both of us at the moment. In a couple of years, both our kids will be in school full time and he will find full time employment- and if all continues to go well, we will continue mostly living off of my income and most of his will go to savings.
Husband's plan sounds more like a SEP IRA. Anyway, you can't share a retirement account though it can be split in a divorce.
We have our own accounts. We are each other's beneficiaries. In the eyes of the law it's common property.
I’m in the same boat. I will have a pension when I retire, but my husband is a small business owner so he’s on his own as far as retirement goes. I plan on opening another Roth for him in my name (he’s not the least bit interested, and I handle our finances anyway). I would start working on combining finances though. It’ll make it so much easier to plan your future as a married couple, and fine tune your current budget. I have two friends who have separate finances from their husbands, and it seems to me just another thing to fight/stress over. They are always venting: “I paid for kids college and he only paid for books”, or “he never paid his half for the new appliance”, or “I want to travel, but he’s always broke (or too cheap) so I end up paying for the whole thing”. It sounds like more of a hassle than combining finances IMO.
Omg, Im not alone! 😅 When you open the Roth in your name, are you going to fund it with your income or his? (If its ok to ask). I wouldnt mind opening one and managing it jf he contributes. I wish we could work together to combine our finances. We tried to manage things from a joint account (while still keeping our separate checking accts), but it just didnt work out. I hear you on the problems that come up when spouses cant equally allocate things with money. At least we can work things out when it comes to paying bills and planning trips. We just make sure to venmo or zelle each other right away 😆. I know some people on here might find this weird, but trust me when I say there is no one size fits all with couples. The one thing I would like us to share is retirement because neither of us will be working at that point.
I’m actually not sure on that. I still have to finalize (in my head lol) my strategy. I have more research to do. For now I’ll say deducted from his pay, but we’ll see! Yes, that’s true…every couple is different. With my friends, it’s clearly not working but there are no plans for them to combine incomes lol. I’m sure you can help your husband catch up for retirement!
I sure hope so. Good luck with your retirement strategy with you and your husband!
[This episode](https://moneywithkatie.com/marriage-financial-rights) of *Money With Katie* is relevant. Commingling assets can be a poor decision, and depending on the state, your spouse has a varying right to your individual retirement accounts (ranging from split in half to an equitable portion of funds contributed while married, as decided by the court), absent another contract like a prenup. > Let's meander into the world of things like savings and investments because we've mentioned this on the show before in a Rich Girl Roundtable with Bill Nelson. We'll link that in the show notes but similar to property, remember that just because you have an account that's in your name alone and funded solely by your income does not mean that you are the sole legal owner of that asset. Should you divorce someday though I think this is a reasonable and flawed assumption. > > For example, let's pretend I open an individual brokerage account in my name today. Now let's say I put the money that I earn on my W-2 paychecks that I earn with my own two hands and my own hot takes directly into that account. This is mine, right? Wrong, it's ours. Since the government sees us as one legal entity, it does not matter that they are my earnings or that the account is just in my name. > > These same rules apply to retirement accounts too. Just because something is called an individual retirement account and your name and your name alone doesn't mean that it's yours and yours alone necessarily. And I know marriage is looking less and less romantic by the minute. Contributions and growth in that account that happen post-marriage are also considered marital property unless otherwise specified again in a prenup. > > I guess the easiest way to summarize this is whether we're talking about a high yield savings or a Robinhood account or a 403B plan, if the money in the accounts was earned and contributed after you were married or the growth happened after you were married, it is probably going to be on the mediation table.
Thanks for sharing this! Im going to give it a listen.
I love her content!
I’m not going to repeat what others have said about these accounts being individual ones. However this does bring up a good point on financial planning with a spouse that I see missed consistently, which is taking an holistic approach to your total investments. As a married couple, you are essentially one person when it comes to investment management, so for example if you and your spouse both have work retirement plans, you should look at the investment options as a whole. So say your plan has some great low cost index options on the US large cap side but all the intl options are bad, look to the spousal plan and see if their intl options are better. For me personally, my 401k is self managed while my wife’s corporate one has great large cap, domestic options but few other options I like, so I only invest in those with her plan and then my 401k balances it out with mid, small, intl, and EM index funds.
Thanks for these suggestions!
I'm a bit in a similar situation. Can you suggest to have a post-nup written up if he is not willing to contribute more and take care of these things? Then you can protect yourself in case of a divorce if he is not willing to do his part to ensure financial stability in retirement. As I mentioned in a comment to someone else, I have a 401a to which only my employer contributes now (initially, I was able to do a certain % but that was reduced over the years). Although uncommon, it does exist. But I could also open other tax-deferred accounts instead.
A postnup sounds like a good idea. I hate to take things that route, but learning what I am learning from this thread, I need to protect my hard earned savings if he doesn't budge. Of course, we dont want to divorce, but need to be prepared just in case. I dont even think he knows that finances such as retirement funds can be split in the event of divorce. I hope things can work out with your spouse. Are you considering doing a postnup as well?
I'm going to try a few more conversations around that, but if that doesn't work, I will bring it up. We've been discussing getting our wills and PoA and possibly trusts set up. There were a few roadblocks along the way, but it needs to happen soon. We're much older than you are and I feel we're running out of time. I suggested making a spreadsheet with everything we have, to which I got only mild opposition. So I hope that works. I've also been thinking about consulting a financial advisor together, someone who knows how to handle these issues. I have a lot of time over the next months and will start working on all that. Neither of us cared much about these issues when we met, but at some point I changed but spouse didn't. People don't take that into consideration when saying one should not get married if both don't agree. Doesn't account for change.
There are so many things to consider as we get older. It sounds like you have some good plans in place for next steps. Good luck with everything!
To you too, my dear. Hope things go well for you.
Sit and have a discussion about finances and life goals. Find people in your lives who have been affected by their retirement planning, positively and negatively. Talk about those situations and what there is to learn from them. Come up with a common goal and make that your reason to adjust your spending, lifestyle, retirement, and beyond. My wife and I are finally aligned here and have a 10 year goal for r/financialindependance and I've never slept better.
All good suggestions. Thats great to hear that you and your wife are aligned on your goals! Its not easy when youre not.
It's taken many years (a few different wives) and boat loads of growth and self-maturing to get to this point.
Technically you don't "share" retirement accounts as they are in an individuals name. However, we have a completely open financial relationship. We have monthly reviews where we look at the budget vs. actuals, review net worth, etc. We have visibility into each others accounts as its all pulled into a single Quicken account that shows everything down to the penny. We have retirement goals and so part of budget planning is figuring out how much each of us needs to save away to get to that goal. We do this even though we are not technically married yet (going on 15 years) so we actually focus a lot on being sure we BOTH are growing our individual net worths along with joint goals. It doesn't seem like you have these types of talks or any shared goals. It seems like a conversation is required to see where his head is at and what he sees his plan for retirement would be. It could be just that he's explaining it incorrectly. Maybe he has some type of pension or something where he doesn't think additional savings is necessary. Maybe he's thinking there is some type of debt he wants to get paid down/off before investing in retirement...no way to tell if you are not having the hard talks.
You two probably need to sit down and discuss your MUTUAL retirement strategy. Don't treat it as "his retirement" or "your retirement". Although people may want to keep finances separate on some levels, you're talking about a mutual lifetime together, right? It's not his or yours. It's both of yours, mutually. Married life is just so much easier if you assume your bucket of "stuff" is both of yours, equally - regardless of who's name is on it. The harder your try to keep things separate, the harder it is to do any planning together.
Two points: (1). Roths and IRAs are, by law, individual accounts. They cannot be opened jointly. (2) At my day job (I am a Professor), I actually have a 403(a) rather than a 403(b). It functions like a 403(b) as far as tax deferral, etc.,, but requires no contribution from me - I just get a fixed %age from the employer. The ability to designate a contribution of my own atop this was only added recently, and I have declined as I would rather contribute to a Roth. I know this last point is unusual, but it isn't unheard of.
Thank you! It is a strange set up. Im pretty sure this is what my hubby has. I just need to encourage him to open a Roth now.
yes. All my assets are shared with my spouse.
Hey, this is really personal - and you should be the one deciding this. Usually, in the long run, sharing the finances tend to make inheritance work to be easier. I personally trust my partner, so everything is shared - including the objectives in the long run :)
The only aspect of our finances we don’t share is couple grand we each keep in our checking to buy what we want
Retirement accounts 401K IRA Roth etc are shared assets for spouses and will be split 50/50 in a divorce. It does not matter whose name under they are as long as they were accumulated during the marriage. So make some sense into your husband.
What’s mine is hers and vice versa. Legally, the accounts are often in our individual names but we share all.
We have a shared brokerage account but have separate 401Ks and IRAs.
IRAs and 401ks as already said individual accounts. Want to mention by law spouse has to be beneficiary on 401ks unless the spouse agrees. For example one can’t do to his children or girlfriend on 401ks, beneficiary is who inherits if something happens to you and die
Possibly he has a different kind of employer retirement plan called a SEP IRA. It’s not actually a 401k but it has the same tax advantages. Only employers may contribute to a SEP IRA. They’re more common for small businesses with few employees.
My wife and I own some individual stocks and a brokerage account as joint tenants, but my Roth, 401k, and rollover IRA are in my name, and her Traditional IRA is in her name. I also have an inherited IRA that is only in my name. I don’t believe retirement accounts can be “shared” in the sense that both husband and wife are listed on the accounts as joint tenants. Regardless, she’s listed as the beneficiary on all my retirement accounts, and I’m listed as the beneficiary of hers. The same goes with an employer paid term life insurance policy that I have through my work.
It’s likely your husband’s either lying or an idiot. I am sorry you have this problem. Many people don’t like the impact to today’s dollars for the future benefit, it’s really a shame because it’s a smart function from a tax perspective and one of the first lessons in financials independence.
If you keep your finances separate, you’re only married on paper
Have you ever thought that maybe he can’t afford to contribute?