Retirement Account in One Spouse's Name - OK?

[Anonymous]

Something to consider is the age difference between you and your spouse. If you are several years apart, it could be advantageous to have some money in each of your names. It ives you more flexibility.

For example, if you and spouse are 5 years apart in age, when the person who has all the 401k money in his name turns 70 1/2 he will need to take required minimum distributions (RMD). Some retirees like to delay pulling out RMDs as long as possible if they have other retirement money to spend. Because if the 401k is a large pot money, the RMD will be large which could make your yearly taxes high.

On the other hand, if you have the 401k money evenly split between you, then you have 5 years of just one person having to receive RMDs, with the 5 years of lower taxes on the front end.

On the other end of the spectrum, if you need the 401k money as early as poosible and your spouse is younger, then you have more flexibility with him being able to withdraw the money when he turns 59 1/2, whereas if you are the older spouse and have all the money, you need to wait.

Not saying these scenerios apply to the OP, but it is something for people to consider. I'd also not want to be the person with NO 401k money if a divorce were to happen. I'm sure the spouse is probably entitled to half, but I'd still feel vulnerable having no retirement money in my name.

Just my 2 cents.

[Anonymous]

Anonymous wrote:We're in a similar position - I have a 401k and max out every year while DH is self-employed. We used to contribute to an IRA for him, but have reached income limits where there's no tax benefit to an IRA so at this point the majority of our retirement savings are just in my name.

DH is listed as the beneficiary on my 401k (and IRAs), with the kids as secondary beneficiaries.

OMG, this is so wrong:

- IRA's always have tax benefits, you've just lost out on tax deduct-ability
- Just because you don't get a tax benefit is no reason to not save

[Anonymous]

Anonymous wrote:We're in a similar position - I have a 401k and max out every year while DH is self-employed. We used to contribute to an IRA for him, but have reached income limits where there's no tax benefit to an IRA so at this point the majority of our retirement savings are just in my name.

DH is listed as the beneficiary on my 401k (and IRAs), with the kids as secondary beneficiaries.

If he is self employed he can open an individual 401k and save 18k + 20% of any business profit. You can also do a Roth or backdoor Roth if you are over the traditional 401k deductible limits.

[Anonymous]

Anonymous wrote:Something to consider is the age difference between you and your spouse. If you are several years apart, it could be advantageous to have some money in each of your names. It ives you more flexibility.

For example, if you and spouse are 5 years apart in age, when the person who has all the 401k money in his name turns 70 1/2 he will need to take required minimum distributions (RMD). Some retirees like to delay pulling out RMDs as long as possible if they have other retirement money to spend. Because if the 401k is a large pot money, the RMD will be large which could make your yearly taxes high.

On the other hand, if you have the 401k money evenly split between you, then you have 5 years of just one person having to receive RMDs, with the 5 years of lower taxes on the front end.

On the other end of the spectrum, if you need the 401k money as early as poosible and your spouse is younger, then you have more flexibility with him being able to withdraw the money when he turns 59 1/2, whereas if you are the older spouse and have all the money, you need to wait.

Not saying these scenerios apply to the OP, but it is something for people to consider. I'd also not want to be the person with NO 401k money if a divorce were to happen. I'm sure the spouse is probably entitled to half, but I'd still feel vulnerable having no retirement money in my name.

Just my 2 cents.

QDRO would fix the retirement savings issue. Your fear in this regard is irrational and unfounded.