Same/Similar Allocation Plan for Spouses if Age Disparity?

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Same/Similar Allocation Plan for Spouses if Age Disparity?

Postby PGR » Mon Aug 26, 2013 9:44 pm

I've often seen posted on this forum that spouses should consider managing their respective portfolios from a somewhat 'unified' perspective. (e.g. same/similar allocation plan for combined funds, etc...)

What if two spouses have a somewhat notable age difference? Say more than 10 years? Would that be a scenario to treat each portfolio with somewhat different or unique allocation plans, etc?

Thanks
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Re: Same/Similar Allocation Plan for Spouses if Age Disparit

Postby Dandy » Mon Aug 26, 2013 10:37 pm

There is no problem taking age and risk tolerance into account when deciding on a married couple's portfolio(s). Keep in mind that females tend to live longer than males. I would think the risk tolerance is a bit more important. The greater the age and risk tolerance differences the more likely separate allocations should be considered.
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Re: Same/Similar Allocation Plan for Spouses if Age Disparit

Postby littlebird » Tue Aug 27, 2013 3:56 pm

PGR wrote:I've often seen posted on this forum that spouses should consider managing their respective portfolios from a somewhat 'unified' perspective. (e.g. same/similar allocation plan for combined funds, etc...)

What if two spouses have a somewhat notable age difference? Say more than 10 years? Would that be a scenario to treat each portfolio with somewhat different or unique allocation plans, etc?

Thanks

No matter what the age difference, I don't see that a "unified " approach necessarily means a same/similar allocation. The various accounts you own between you could be allocated to their "best and highest use" depending on what is available to each of you and keeping each account as simple and uncluttered as possible, e.g., short term bonds in his IRA and Total Bond in her, larger, IRA, if you want more Total Bond and she has a larger IRA.

Are you really asking whether each should manage his/her own account predicated on their own age or should a combined investment plan be predicated on their average age/younger person's age/some other age? If that's your question, we - with a >15 year difference - settled on using the younger of our ages.
Last edited by littlebird on Tue Aug 27, 2013 4:11 pm, edited 1 time in total.
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Re: Same/Similar Allocation Plan for Spouses if Age Disparit

Postby GTF » Tue Aug 27, 2013 4:09 pm

I would agree the allocations in each IRAs could be the same or different. More importantly, if there is a substantial difference in age and say the husband is older with larger earnings taking SS at 70 might be very important to the younger surviving spouse. Since that is exactly my circumstance, those are my thoughts and with a 50/50 allocation overall as I am fairly confident my wife will survive me. The next important step will be to make sure she can handle all the re-balancing and other things she will need to know in the (hopefully not so soon) future.
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Re: Same/Similar Allocation Plan for Spouses if Age Disparit

Postby kate1234 » Wed Aug 28, 2013 11:03 am

We struggled with this too and ultimately came up with a single asset allocation that made sense for the younger spouse; that's the timeline you've got to have covered.
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Re: Same/Similar Allocation Plan for Spouses if Age Disparit

Postby JimB » Wed Aug 28, 2013 12:25 pm

In my case, the age difference is large enough that I most likely will not be around when my wife turns 59 1/2. So we cannot consider her savings as part of the pot used in my retirement. We have different allocations and my savings are to cover bills after I can no longer work. Her savings are for a more distant future and her allocation is more aggressive.
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