Are Your Family’s Retirement Plans Fighting Each Other?

Are your retirement plans fighting with each other?

How many retirement accounts do you and your spouse have? Do you both have Roth IRAs and a 401k retirement plan at work? Or, old ones from a former job?

You may find out after closer inspection that your separate plans do not mesh well with each other. In fact, you may find yourself poorly diversified with a lot of fund overlap if you are not too careful.

You may want to add several checks to your annual investing portfolio rebalancing this year to synchronize your entire family’s retirement plans. Here are some things to consider.

Look at Your Family as a Whole

One of the best ways to synchronize your entire family’s retirement planning is to look at the family as a whole unit instead of multiple accounts owned by two people. Your spouse’s retirement accounts and his or her asset allocations need to dovetail into yours as well.

There is a risk of overlapping investments between a husband and wife’s retirement accounts. There are many basic current accounts available that you can choose from in order to help you diversify your investments, savings accounts, and other assets.

For example, many 401k retirement plans promote index funds as their fundamental investment choice. Are you and your spouse investing in the same types of assets without even realizing it? You have the very good potential for both people to be over weighted in an index fund or ETF that invests in a broad market index such as the S&P 500.

Inspect Your Investments And Allocations

There are several ways that you can ensure that your asset allocations as a family provide you with diversification across several asset classes. You can each set up separate asset allocations between, stocks and bonds, as well as both choosing like large and small cap funds,

Are You Capitalizing on Retirement Plans?

A spousal IRA and Roth IRA are other retirement plans that you want to ensure that you are using as much as possible. Even if your spouse does not earn an income, you both can invest in separate Roth IRA accounts assuming that at least one of you has an earned income and meets the contribution limits.

A Roth IRA is such a valuable tool that allows families to reduce the amount of taxes they pay in retirement, and taking advantage of investing $10,000 as a family even if your spouse is not currently working can have a dramatic effect on your retirement nest egg.

It can often be worth the effort of one spouse funding both in a family effort to maximize retirement benefits. Families should also strive to ensure that they capture any employer matching 401k contribution if available to one member of the family and not miss out on free money for retirement.

View Your Plans Together

One way to monitor your family’s eclectic collection of retirement funds is view them all in the same place. Services like the ones offered by, banks, and other financial websites that allow you to view several accounts from many different sources provide families with a single place to review and focus their attention.

It is very easy to see which accounts may be doing well or which ones need more of your family’s focus when they are all displayed on one website. Websites like Mint are great places not only to track your spending habits but to easily see all of your family’s retirement accounts in one place. – FREE Money Management Software!

A family should approach retirement thinking like one entity instead of a collection of accounts owned by two separate people. A husband and wife’s retirement accounts can interweave and support each other providing increased diversification when approached as one.

How to Stop Facing an Uphill Battle with Your Finances

4 thoughts on “Are Your Family’s Retirement Plans Fighting Each Other?”

  1. You bring up a great point that I haven’t really thought about before. I always forget that I need to think about my wife’s investments too.

    • Yeah, I’m with Jason – I never even CONSIDERED this before. Now I’m also wondering if I should factor my kids’ 529 funds into consideration when it comes to diversification – thoughts?

  2. Great article. I see this often with new clients and call this either “financial clutter” or “retirement clutter.” In today’s society with most people having worked for a number of employers, having several old 401(k)s and/or IRAs in addition to other investments is quite common. The first step that I take with each client is to populate a simple excel spreadsheet that lists the client’s various accounts across the top and individual holdings by asset class down the left side. I calculate the percentage of the total portfolio and asset class. This is often the first time clients have looked at all of their holdings as a portfolio. I maintain this spreadsheet for all clients and update on a regular basis. I certainly use other tools to review their investments on both a total and individual holding basis, but this is the starting point.

  3. This is the kind of thing that made me realize that me and my exgirlfriend weren’t a good match. Our retirement plans were completely different. She simply did not have one and made no effort to ever contribute to one. I’d try to convince her that she needed to, but she was just too stubborn to change her ways.


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