Retirement Account in One Spouse's Name - OK?

[Anonymous]

I am a Fed and so have access to the Thrift Savings Plan. So far our retirement savings have been going mostly into the Thirft Savings Plan (lower cost), but of course that puts the retirement investments mostly in my name.

Obviously this means we are not maxing out retirement potential (arguably that's a mistake). But that factor aside, is it important to make sure there are retirement assets in DH's name? Or would he easily inherit the same pot of money if I die in a car crash? I've been assuming that all would be fine, but I'm not sure that I fully understand the implications.

[Anonymous]

If he does not have access to a 401k type of plan, I would at least start an IRA (ROTH if your income allows) for him.

[Anonymous]

You should have your dh listed as the beneficiary on your retirement account, so that he inherits if you pass. You can list your kids as contingent beneficiaries, so that they inherit the account if something happens to the two of you.

[Anonymous]

Have you named him as a beneficiary? The spouse nearly always inherits assets when the partner dies, but designating him as beneficiary will ensure this.

[Anonymous]

We did this, and I can't find any reasons not to.

[Anonymous]

Yes, he's the beneficiary. It sounds like I am correct in assuming there are no real drawbacks to holding one account? Our default plan was to max out potential contribution to the Thrift account, then move over to second.

[Anonymous]

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.

[Anonymous]

Anonymous wrote:Yes, he's the beneficiary. It sounds like I am correct in assuming there are no real drawbacks to holding one account? Our default plan was to max out potential contribution to the Thrift account, then move over to second.

If he works and his company matches contributions your thought process is not correct. He should at least contribute enough to get the max.

[Anonymous]

^^ contribute enough to get the match

[Anonymous]

I would think that if you can only afford as a family to save X amount of money for retirement each year, that you should contribute that money equally through each person's retirement account. Doing it this way will mean that each person gets whatever the company match is, and it also seems more fair to me.

If one person maxes out social security each year, however, and another doesn't, it actually makes more sense for the lower earned to contribute more to retirement and the higher earner not to.

For example:

Spouse 1 makes 200K a year
Spouse 2 makes 75K a year.

If they only contribute 15K a year to 401Ks, then spouse 2 should contribute the entire 15K as it will reduce the social security taxes paid on the 15K that is contributed. For spouse 1, since they maxed out social security already, it doesn't save any extra tax money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, he's the beneficiary. It sounds like I am correct in assuming there are no real drawbacks to holding one account? Our default plan was to max out potential contribution to the Thrift account, then move over to second.

If he works and his company matches contributions your thought process is not correct. He should at least contribute enough to get the max.

He doesn't have an employer matching contribution. If that changes, we would definitely want to create an account for him.

[Anonymous]

Anonymous wrote:I would think that if you can only afford as a family to save X amount of money for retirement each year, that you should contribute that money equally through each person's retirement account. Doing it this way will mean that each person gets whatever the company match is, and it also seems more fair to me.

If one person maxes out social security each year, however, and another doesn't, it actually makes more sense for the lower earned to contribute more to retirement and the higher earner not to.

For example:

Spouse 1 makes 200K a year
Spouse 2 makes 75K a year.

If they only contribute 15K a year to 401Ks, then spouse 2 should contribute the entire 15K as it will reduce the social security taxes paid on the 15K that is contributed. For spouse 1, since they maxed out social security already, it doesn't save any extra tax money.

You completely made this up. 401k contributions do not reduce social security tax.

[Anonymous]

Anonymous wrote:I would think that if you can only afford as a family to save X amount of money for retirement each year, that you should contribute that money equally through each person's retirement account. Doing it this way will mean that each person gets whatever the company match is, and it also seems more fair to me.

If one person maxes out social security each year, however, and another doesn't, it actually makes more sense for the lower earned to contribute more to retirement and the higher earner not to.

For example:

Spouse 1 makes 200K a year
Spouse 2 makes 75K a year.

If they only contribute 15K a year to 401Ks, then spouse 2 should contribute the entire 15K as it will reduce the social security taxes paid on the 15K that is contributed. For spouse 1, since they maxed out social security already, it doesn't save any extra tax money.

SS and Medicare apply to retirement contributions, but not medical, dental, or dependent care FSA amounts.

[Anonymous]

Anonymous wrote:I am a Fed and so have access to the Thrift Savings Plan. So far our retirement savings have been going mostly into the Thirft Savings Plan (lower cost), but of course that puts the retirement investments mostly in my name.

Obviously this means we are not maxing out retirement potential (arguably that's a mistake). But that factor aside, is it important to make sure there are retirement assets in DH's name? Or would he easily inherit the same pot of money if I die in a car crash? I've been assuming that all would be fine, but I'm not sure that I fully understand the implications.

I am pretty sure the TSP will not release a married account holder's funds to anyone other than the account holder's spouse. Go poke around the TSP website.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am a Fed and so have access to the Thrift Savings Plan. So far our retirement savings have been going mostly into the Thirft Savings Plan (lower cost), but of course that puts the retirement investments mostly in my name.

Obviously this means we are not maxing out retirement potential (arguably that's a mistake). But that factor aside, is it important to make sure there are retirement assets in DH's name? Or would he easily inherit the same pot of money if I die in a car crash? I've been assuming that all would be fine, but I'm not sure that I fully understand the implications.

I am pretty sure the TSP will not release a married account holder's funds to anyone other than the account holder's spouse. Go poke around the TSP website.

It will go to the assigned beneficiary. Not sure about the TSP, but typically if the assigned beneficiary is someone other than a spouse, you need a notarized form from the spouse that states they are aware they are not the beneficiary.