Author Topic: Newly Married Investment Question - What to do??  (Read 1784 times)

michaelmoneyman

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Newly Married Investment Question - What to do??
« on: February 28, 2017, 03:29:52 PM »
Hi guys and gals. Quick question here that I cant find the answer for anywhere online, but I figured some of you may be in the same boat as me or were in the past. My wife and I have combined most of finances except our investments. My thought process goes like this...

I have a work sponsored 401k and a Roth IRA. She has a work sponsored 401(3b). We would like all the money together so that it compounds at a greater rate, but I don't want to give up the added bonus that my job matches up to 6% of my salary (I believe hers does the same).

Does anyone have any thoughts on the route I should take here? Max out each of separate accounts and just live with it... Invest up to the 6% mark where the employer stops matching in both the 401k and 401 (3b) and then invest the rest in a joint account?

Any help would be greatly appreciated. Thanks.

braje

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Re: Newly Married Investment Question - What to do??
« Reply #1 on: February 28, 2017, 03:55:36 PM »
If all the accounts are invested the same way the returns are the same
example acct 1 1000*.05=50, acct 2 3000*.05=150, acct 3 2000*.05= 100 (50+150+100=300)
OR 6000*.05=300.
The number of accounts doesn't matter.
You can open a taxable joint account, but I don't know of any way to combine your indiviual retirement accounts.

OthalaFehu

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Re: Newly Married Investment Question - What to do??
« Reply #2 on: February 28, 2017, 04:17:26 PM »
I think you might have a simple math mistake. One account will not compound faster than 2 smaller ones as long as the totals are the same. What I like to do is set my wife's investment choices at somewhat conservative and set mine as if I were 10 years younger.

michaelmoneyman

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Re: Newly Married Investment Question - What to do??
« Reply #3 on: February 28, 2017, 06:59:52 PM »
You guys have debunked my theory. I was thinking it compounded like a credit card accumulates interest for some reason (wouldn't that be nice).

Makes sense now. Thanks for your help.

SwordGuy

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Re: Newly Married Investment Question - What to do??
« Reply #4 on: February 28, 2017, 07:24:30 PM »
Um...  They do compound exactly like a credit card, except in your favor instead of the bank's.


braje

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Re: Newly Married Investment Question - What to do??
« Reply #5 on: March 02, 2017, 12:27:00 AM »
Um...  They do compound exactly like a credit card, except in your favor instead of the bank's.

Yep

Paul der Krake

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Re: Newly Married Investment Question - What to do??
« Reply #6 on: March 02, 2017, 01:06:29 AM »


Think hard, OP.

talltexan

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Re: Newly Married Investment Question - What to do??
« Reply #7 on: March 02, 2017, 07:18:23 AM »
OP-
no one likes to talk like this, but since we're strangers on the internet, please let me advocate for a fairly even division between your wife's and your retirement savings, particularly if your two incomes are very different. I was an expert witness for many divorce cases in which the woman undervalued retirement savings (usually because she wanted the house instead), leaving her at an age with reduced earning power and reduced retirement savings.

Particularly if you're higher-earning, the reasonable thing to do is make sure your wife's 401(k) is beefed up. A judge will divide everything anyway, but it will change the starting point for negotiations. Which hopefully will never happen.