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How to divide retirement money between spouses?

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    How to divide retirement money between spouses?

    I am 9 years older than my husband. Because of that I always figured that I should put what we had to put towards retirement into my account first and if more then into his. We have ever put in as much as one person is allowed. I'm 63 so technically can tap my retirement accounts any time. He is 54 so not yet able to pull anything out without penalty. Not that we want to be taking anything out yet, knowing if needed we could is better than paying a fee because what we need is in his account. He also has to wait to 67 to retire on full SS. I have some money that I want going into the retirement accounts and I can't decide if I should dump it all in mine, divide it equally or what. Looking for ideas at this point to what makes the most sense. As much as possible I want those accounts untouched for as long as possible.
    Gailete
    http://www.MoonwishesSewingandCrafts.com

    #2
    Originally posted by Gailete View Post
    I am 9 years older than my husband. Because of that I always figured that I should put what we had to put towards retirement into my account first and if more then into his. We have ever put in as much as one person is allowed. I'm 63 so technically can tap my retirement accounts any time. He is 54 so not yet able to pull anything out without penalty. Not that we want to be taking anything out yet, knowing if needed we could is better than paying a fee because what we need is in his account. He also has to wait to 67 to retire on full SS. I have some money that I want going into the retirement accounts and I can't decide if I should dump it all in mine, divide it equally or what. Looking for ideas at this point to what makes the most sense. As much as possible I want those accounts untouched for as long as possible.
    Because of the bolded, put it in YOUR retirement accounts. If you have more than is allowed for you then you can fund his.

    That's how I do it anyway. Been married 28 years and expect to be, till death do us part, but just in case

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      #3
      Originally posted by Thrif-t View Post

      Because of the bolded, put it in YOUR retirement accounts. If you have more than is allowed for you then you can fund his.

      That's how I do it anyway. Been married 28 years and expect to be, till death do us part, but just in case
      Depending on State laws that may not matter. Where I live itís an equal 50/50 of all assets.

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        #4
        I've always felt the assets should be kept at 50-50 as much as possible. You mentioned that you are already able to take distributions penalty free, but would you be spending down 100% of the retirement savings before your spouse reached the age of 59.5? Also, are you using Roth or traditional? On one hand--the Roth you can take out contributions at any time so only the earnings would be penalized so your spouse would still be able to take distributions. On the other hand--with the traditional IRA you will be subject to required minimum distributions in about 7 years (whenever 70.5 is for you) whereas your spouse will have a few years longer before RMDs.

        The part of the puzzle that I don't have the answer to is what happens to the assets that are supposed to be 50-50 when one spouse has to go into long term care? Do they make any allowances for the other spouse if most of the money is saved in one retirement account? Would it make any difference if the retirement savings were in 2 accounts at 50-50? Another issue--suppose most of the money is saved in one retirement account and that spouse becomes incapacitated? There are a lot of banks that don't recognize POA documents that have not been drawn up by the banks themselves (though PA might be the exception to this problem due to legislation). I also wonder how many spouses who have the majority of the retirement savings in one spouse's name have POA set up for the other spouse.

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          #5
          6 weeks after we got married I got sick>disabled. We drew up POA at that time, both regular (financial) and healthcare. This is money from the sale of our rental property so it is equally ours. I am more concerned with access without penalty to it if we did need to draw on it. Unlike most on the thread about your 'magic' number for the amount you want to be tucked aside before you can retire, I have no illusions that we would have even $250,000 upon either of our retirements.

          I have done a lot of reading, etc. about the issue and don't recall ever seeing any mention of when there is a big gap in ages in a couple. If they are both about the same age and one is retiring sooner than the other but only by a year or two it is pretty cut and dried but a 9-year gap, I've never seen a mention if there is anything to do differently.

          Thanks for your thoughts on this. Still going to be thinking on this one for a bit.
          Gailete
          http://www.MoonwishesSewingandCrafts.com

          Comment


            #6
            I'm guessing you are talking about funding Roths or traditional IRAs. We have always funded our Roths equally each year. We've been able to max them out every year but even if we couldn't, we would have funded them equally. Any time I made contributions, I always split them evenly between us. We don't have the age difference but I think I'd do it the same no matter what.

            When one of us dies, the other gets all of the money anyway so it really doesn't matter. Plus, with Roths at least, contributions can be withdrawn at any time without penalty so if we found ourselves in a situation where we needed more money than was in my Roth, we could always pull money out of hers.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
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              #7
              if youre married should it not really matter that much? idk, im not married but that's the way i'd look at it. if one spouse dies, the marital assets transfer over to the other spouse right?

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                #8
                What I was looking at was I can tap my retirement account already if needed while he can't do it without a penalty as he is too young. I finally decided and split it equally. The good thing is the accounts are in a mutual fund which is down about 10 points right now from what it has been, so to me I got them on sale.
                Gailete
                http://www.MoonwishesSewingandCrafts.com

                Comment


                  #9
                  Originally posted by Gailete View Post
                  What I was looking at was I can tap my retirement account already if needed while he can't do it without a penalty as he is too young.
                  Except from his Roth which he can tap any time.
                  Steve

                  * Despite the high cost of living, it remains very popular.
                  * Why should I pay for my daughter's education when she already knows everything?
                  * There are no shortcuts to anywhere worth going.

                  Comment


                    #10
                    He doesn't have a Roth IRA, I have one and we both have a regular IRA. I deposited the money into our IRAs for 2018 as it may help with taxes for 2018. We aren't looking forward to any large money influxes this coming year like we did this past year, so I want to be sure we aren't left holding the bag so to speak. I haven't installed TurboTax yet. With all the new changes, doing taxes this year will be interesting. Doesn't matter how much you read about them, seeing them in black and white brings them home.

                    My Roth IRA has been built upon deposits from the pattern business and dividends reinvested and is over $7000 at this point. Many of those deposits were less than $50. It would have been so easy to go spend it on something else, so I am really proud of myself between that and my stock portfolio, and even with the ups and downs on the stock market lately, my total is basically where has been for the last couple months.
                    Gailete
                    http://www.MoonwishesSewingandCrafts.com

                    Comment


                      #11
                      Gailete, when do you plan on stopping working? When does it? What is your long term plan? Are you planning on leaving him what's left in the retirement account? Do you want it to go to your children? I think that will also help us make a better decision. Whose money are you depositing now? Just yours? Where does it come from? Who pays the for your current living expenses? How do you plan on living when you both stop working?

                      Are you planning on staying together?
                      LivingAlmostLarge Blog

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                        #12
                        The money was from the sale of our rental property which made it ours. So I split it. I have no expectations of leaving my kids a penny. While we may have more in our retirement accounts than many Americans, it is just barely, when I can no longer work, enough to bring in enough to bridge the gap between my SS and living under a bridge. My Roth and stocks are mine that I earned from the pattern business and as far as I am concerned is mine, but the same story. I will probably stop working when I lay down and die. I'm just in a hard spot now. It reminds of when I got one of my knees done. I was taking the 3-6 weeks it needed to heal and then I realize he hadn't done an ounce of work since I had come home from the hospital. He didn't start working again until I got back to work. Almost like in his mind if I wasn't working why should he. He wasn't like this when we first got married. I don't know what happened.
                        Gailete
                        http://www.MoonwishesSewingandCrafts.com

                        Comment


                          #13
                          Originally posted by Gailete View Post
                          The money was from the sale of our rental property which made it ours. So I split it. I have no expectations of leaving my kids a penny. While we may have more in our retirement accounts than many Americans, it is just barely, when I can no longer work, enough to bring in enough to bridge the gap between my SS and living under a bridge. My Roth and stocks are mine that I earned from the pattern business and as far as I am concerned is mine, but the same story. I will probably stop working when I lay down and die. I'm just in a hard spot now. It reminds of when I got one of my knees done. I was taking the 3-6 weeks it needed to heal and then I realize he hadn't done an ounce of work since I had come home from the hospital. He didn't start working again until I got back to work. Almost like in his mind if I wasn't working why should he. He wasn't like this when we first got married. I don't know what happened.
                          So the money was joint? I guess i would split it as well. How do you split expenses? I mean when you retire or even now how are expenses handled? How do you pay property taxes, utilities, medical, cleaning, food, car, insurance, etc?

                          I will also say you asked in the beginning that you are debating putting it into only your retirement accounts. Would he notice and say something if you did such a thing? Why would you put it into retirement versus just leaving it in taxable accounts if it's from a rental home sale?
                          LivingAlmostLarge Blog

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                            #14
                            I handle all the money. He basically knows what I am doing with it. For all practical purposes, I have been 'retired' for about the last 16 years. Our money was always put together. If we had been splitting expenses, he would be in a lot of debt to me at this point. I wanted to put it into an IRA so it would be better taxwise for 2018 which has a rather large final project he got paid for. By the way his taxes for that business works, while we only got the last payment this past year, the whole amount is taxable to 2018. So any deductions we can grab for 2018 I wanted to grab. I am weird when it comes to money. I hate taking money out of a savings account unless I am paying for something that the savings were set up for such as taxes out of the tax account. The money was set aside for that, but 'regular' savings I will do just about anything to avoid tapping them, then my 'regular' stock portfolio and then the IRAS and my with IRA. By putting it into the different spots, then I know I won't be forgetting that this was supposed to be for taxes but I'm spending it on new tires for the car. He has no clue how I track things, but it works for me. He already told me that if something happens to me he will only have a checking and savings account. But he will be in bad shape since if something happens to me, he will be without my SS check and the small pension I get from the ex.and under his hands at least from what I can tell now the pattern business will die. Anyhow it works for me. He knows that I have put any retirement funds into my account first simply because I can access mine without penalty already and he has a while to go for his. Not knowing how long we can go without tapping the IRA/Roth accounts I want them to grow as much as possible until we really need them. I was reading an article the other day and couldn't believe that I HAVE to start tapping my IRA in about 7 years! When did I get so old????
                            Gailete
                            http://www.MoonwishesSewingandCrafts.com

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                              #15
                              How much is your Roth and how much is in your regular IRA? Does it make sense to convert some now if you have such a low bracket?
                              LivingAlmostLarge Blog

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