Interesting retirement conundrum...

[Anonymous]

Curious how folks would approach this one...

Scenario: happily married but practical couple. We have a prenup and though we never want to use it, want to be fair if anything actually does happen (at least while we love school other!). Retirement accounts are clearly specified as individual property in event of divorce.

Husband took time off to be stay at home dad but just went back to work. Makes $90k a year. Wife makes $160k per year.

Husband is behind in retirement savings (35, about 60k in retirement). Wife (33) has about $200k in retirement

Wife’s job puts 10% salary into 403b automatically. Husbands firm has no 401k plan.

So here’s the issue— salaries too high for IRA deduction. Wife still gets deduction for additional 403b contributions.

Figure budget can support (with childcare right now) putting in an additional $20k (across both husband and wife) into retirement. What would you do and why?

[Anonymous]

Know you are in this together.

[Anonymous]

We treat the retirement options as available to all, and contribute according to the household's income. For a while I was fairly low-income and maxed out my 403b because together it made sense, even though my take home was very low because of it. Another time DH had a mega backdoor roth through his work, and we maxed that.

I'd throw the money into whatever makes more sense for your financial plan overall. Can you do backdoor Roths?

[Anonymous]

I'd revise the prenup and max out all retirement savings options.

[Anonymous]

Anonymous wrote:I'd revise the prenup and max out all retirement savings options.

+1

It's not really fair for retirement savings to be individual property, yet you agreed (apparently) for one spouse to forego contributing to retirement while providing a service to the team. You should have been contributing an amount to his retirement during his at-home-parenting. But, I think it just makes more sense to split the retirements 50-50.

[Anonymous]

you guys are too cynical to be married

[Anonymous]

Did you both contribute to ROTH IRAs when husband was a sahd?

[Anonymous]

prenup? Was one of you a millionaire coming into the marriage? if not, you are too poor to be wasting time on things like a pre-nup. Your entire married income belongs to both of you. Don't waste time nitpicking through that. Save as much as you can in a tax deferred account knowing fully well that it belongs to both of you.

[Anonymous]

lol what a dumb "problem" to believe you have.

[Anonymous]

We contributed the same amount to both retirement accounts each year, even when one spouse was part-time for childcare or one made significantly more or had a match. The income is household income, so we adjusted contributions accordingly. If you have a pre-tax option, do that, but if not, just put it in post-tax. Especially given that you have a prenup that specifies that the accounts will split in the event of a divorce, it's essential to contribute fairly. (I wouldn't worry about catching up if the accounts were not equal coming into the marriage, but I would worry about compensating for the years that the husband could not contribute because he was staying home.) For us, that sometime meant that most of one paycheck went into a 401K. Obviously max out any matching, but after that, fund the 401K before you start adding more to the 403b.

[Anonymous]

Anonymous wrote:Curious how folks would approach this one...

Scenario: happily married but practical couple. We have a prenup and though we never want to use it, want to be fair if anything actually does happen (at least while we love school other!). Retirement accounts are clearly specified as individual property in event of divorce.

Husband took time off to be stay at home dad but just went back to work. Makes $90k a year. Wife makes $160k per year.

Husband is behind in retirement savings (35, about 60k in retirement). Wife (33) has about $200k in retirement

Wife’s job puts 10% salary into 403b automatically. Husbands firm has no 401k plan.

So here’s the issue— salaries too high for IRA deduction. Wife still gets deduction for additional 403b contributions.

Figure budget can support (with childcare right now) putting in an additional $20k (across both husband and wife) into retirement. What would you do and why?

What would I do? Stop treating my DH like trash and consider all retirement joint assets.

[Anonymous]

This is neither interesting nor is it a "retirement conundrum.". This is a banal marital problem.

[Anonymous]

I agree this is not an “interesting retirement conundrum”.

It is a faintly depressing story about lack of commitment to a relationship.

[Anonymous]

Why on earth does a couple who has an HHI of $250,000 and a net worth of ~$260,000 plus home equity have a prenup?

You are making life far, far more difficult than it needs to be.

[Anonymous]

Anonymous wrote:Why on earth does a couple who has an HHI of $250,000 and a net worth of ~$260,000 plus home equity have a prenup?

You are making life far, far more difficult than it needs to be.

I have seen it in cases where one partner comes to marriage with huge debt or gambling/addiction history.

However, not funding retirement while staying home or recovering his career is a bit hard hearted.