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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 07:59 AM   #21
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Re: Should a married couple have individual retirement investing plans?

There's always the QDRO to get at the IRA/401k assets. It's very common, since for many folks this is a large portion of their assets. Qualified Domestic Relations Order (or at least that's what it's called in my state). One spouse would have a right to collect a portion of the retirement account assets of their ex-spouse at the time of distribution with a QDRO. These QDRO's go on file at the IRA/401k custodian's office (just to make sure your ex-spouse doesn't "forget" to pay you ).

But the better plan is to fund your own IRA. That's money in your pocket that you control and you decide when to distribute and in what amounts (whether through a 72t early distribution, to pay for kid's college, or at 59.5). There's no reason not to.
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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 08:20 AM   #22
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Re: Should a married couple have individual retirement investing plans?

Quote:
Originally Posted by justin
Qualified Domestic Relations Order (or at least that's what it's called in my state). One spouse would have a right to collect a portion of the retirement account assets of their ex-spouse at the time of distribution with a QDRO. These QDRO's go on file at the IRA/401k custodian's office (just to make sure your ex-spouse doesn't "forget" to pay you
Yes, this is what I was thinking of when I said that dividing this asset "isn't pretty." Its not a clear division of property that allows the parties to move on, they are tied to one another through retirement with the parties most of the time continuing to feel that they got a bad deal.

I've been thiking about this question since yesterday - it seems to me that marriages have a better chance when both parties feel they are protected financially. If all the money is in one spouse's name then that spouse has control of the other's future - I would really worry that this is just the beginning of controlling behavior

Things are rarely ever "equal" but you, and all married people who consider themselves a "team" financially should structure their investments so they don't completely favor one of them.
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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 02:15 PM   #23
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Re: Should a married couple have individual retirement investing plans?

There's a lot of great advice here - it ALL seems to be running in favor of having your own accounts. Several of them have suggested, reasonably enough, that your marriage might not last. But what if it does? Won't everything be alright if you're together forever?

Possibly not.

My father-in-law just died. He was very successful and left his wife of 58 years with plenty of money and a house in one of the most expensive neighborhoods in the country. While he was alive he INSISTED on taking care of all things financial. He made ALL of the decisions, knew where ALL of the accounts were, did ALL of the talking with the lawyers. She was expected to sign papers as they were put in front of her and keep her mouth shut. She asked regularly to understand more -- especially as he became ill and his death became inevitable -- but he swore that he had it all under control.

Now that he's dead -- CHAOS!!!! She doesn't know what she's got, where it is, or most important, what to do with it once she finds it. (Turns out he didn't have it all under control after all.) Having gotten through the trauma of his death from cancer she is now faced with the job of trying to understand investments and concepts she's never heard of. She tells me that she's so troubled that she hasn't even had time to grieve. What she does seem to have time for is a burning anger at his having shut her out, and at herself for having let him do it.

You sound confused and a little uncomfortable about this issue. If I'm right, I recommend that you sit with that feeling for a full minute, and experience it completely. Feel the little knot in the stomach if you have one, the flurry of questions in your mind, the distrust you are trying to ignore but which keeps coming back. Now, imagine feeling that way for ALL the rest of your life together, right up untill you're a white-haired, almost-deaf widow of 83 with shaky hands and a mountain of financial documents on your dining room table.

Your husband is probably a good guy who loves you and thinks that as the oldest and most experienced, he knows best. (I was in a relationship with a man 13 years my senior when I was your age -- I know of what I speak.) Sometimes, he probably DOES know best.

But YOU are an adult also. Whether or not he understands that -- YOU need to understand that. It's up to YOU to decide whether you can learn to live happily in ignorance and let him make financial decisions, or whether you want to understand and have a say in financial matters. Whatever you decide, you want to get this type of thing settled early in the marriage, because patterns are much harder to break once established.

Quite apart from the relationship issues, you want to know this stuff because it feels GOOD to master financial concepts and to feel in control of your life. ;-)

As someone here said, you're off to a fabulous start by consulting this board. I wish I'd been that savvy at 23. Keep up the good work!!!
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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 03:19 PM   #24
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Re: Should a married couple have individual retirement investing plans?

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Things are rarely ever "equal" but you, and all married people who consider themselves a "team" financially should structure their investments so they don't completely favor one of them.
Mine's definitely tilted in my favor, but its only because i also have a 401(k) (TSP), and she doesnt. We both fully fund our Roths though every year. I do small things to help the inequity by, say, funding hers first every year (it makes a difference). But Ive almost been in the federal government long enough (and married to her) that she'll be entitled to half of my pension whether we stay together or not. On top of that, my parents would disown me if I left her (since they probably like her more than me), so she's sitting pretty atm.

Caroline, i agree with your post and your concern, but i guess that situation wouldnt be true in every clueless spouse's case. In my case, i have given my wife one piece of paper kept in an undisclosed location that gives her user/passwords to every account i have. Then again, if she didnt have that, all she'd have to do is just let the mail come in and within 3 months, she should have a statement for just about every account i have. And in most of those accounts, i directly listed her as a beneficiary in the event of my demise (effectively nullifying the need for a will in those cases). So i guess for someone with a really complicated financial struture that would be a fear, but for me, i just own a house, a couple of cars, 2 money market funds, and about 15 mutual funds with varying amounts of money in them.
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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 03:30 PM   #25
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Re: Should a married couple have individual retirement investing plans?

Quote:
Originally Posted by Azanon
i just own a house, a couple of cars, 2 money market funds, and about 15 mutual funds with varying amounts of money in them.
What if your survivor had no clue what a mutual fund even was? I think that keeping both spouses educated is an excellent idea.

OP should definately have her own accounts and strive to learn about investing. It isn't hard, and it will serve you well.
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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 03:54 PM   #26
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Re: Should a married couple have individual retirement investing plans?

Quote:
Originally Posted by Azanon
On top of that, my parents would disown me if I left her (since they probably like her more than me), so she's sitting pretty atm.
Hey Az, there are some here who like her more than you, too.
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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 05:17 PM   #27
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Re: Should a married couple have individual retirement investing plans?

im very proud of how much my wife learned about the markets over the last few years. she literally went from not a clue and buying tech funds from her savings bank as an investment for a widow to having a good idea and handle on all our investments. she even has a grasp on all the econimic events and what they mean.


NOT BAD FOR A GIRL!


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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 05:23 PM   #28
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Re: Should a married couple have individual retirement investing plans?

For us the transition of our portfolios when we got married 1-1/2 years ago was rather easy. i had my newsletter i was following for years and she had a big mish mosh of everything anyone sold her.

we sold off her stuff and replaced it with the identical funds i had. i had a lot of money in retirement plans, she had alot of money in taxable accounts.

we gradually refined the portfolio where i sold off the stock funds and she bought them in her taxable account. i replaced them with the bond funds and high dividend paying stocks or funds with higher turnovers. took a while but we finally have created a joint portfolio that functions as 1 unit.
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Re: Should a married couple have individual retirement investing plans?
Old 12-05-2006, 08:57 PM   #29
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Re: Should a married couple have individual retirement investing plans?

Quote:
What if your survivor had no clue what a mutual fund even was?
My mother (83) just lost her wallet. She was carrying around her social security card at the time (!!!!) along with ID, $250, etc. etc.

She immediately went down to her credit union, where she holds her checking, savings, and credit card accounts, and "the nice folks at the credit union fixed everything" for her.

I asked if they'd called Equifax, etc. etc. and put a freeze on her credit record. Or if she'd got a police report so that I could do that for her. Or if she'd contacted Social Security for a new number.

Huh?

Twenty minutes later she still doesn't understand that folks who get hold of her information can steal her identity. If you asked her what a mutual fund was her eyes would roll back in her head. (In fact, I'm seeing her on Sunday. I think I'll try that and report back!)

I think we've all got to exercise our financial muscles regularly, or we end up unable to use them if and when they're needed.
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