Separate $ in...retirement??

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nick evets
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Separate $ in...retirement??

Post by nick evets » Fri Nov 15, 2019 1:44 pm

For 20 years of marriage my wife and I have had a 'his,' 'hers,' and 'ours,' account. It's worked out well: we've been fortunate to have good jobs over most of our lifetime, and are on the cusp of retirement. A couple points that may or may not be germane:
1) we don't have children, and no desire to leave an estate beyond some nominal gifts to relatives and any balance to charity
2) my wife is 5 years older: current plan is to both retire in the next year or two. I'll be 55 or 56, and she'll be 60 or 61.
3) her retirement portfolio is about 35% larger than mine (she's worked longer at higher-paying jobs).
4) To achieve an overall household 60/40 AA I'm 95/5 and she's 40/60.

We've done quite a bit a of planning, and worked hard on calculating anticipated income needs in retirement. Working with various retirement planners (through work, online, rule of 4%, etc.) I'm cautiously optimistic that retirement is an imminent possibility. I assumed once retirement started we would 'combine' assets entirely.

However, my wife is now suggesting we simply each control and spend from our retirement portfolios as we see fit. This is a curve ball. Her point is she's worked too hard over her life (can't deny that), and wants to spend whatever she wants. If she can't she'll just...keep working. I think a lot of this is driven by fear that I will become 'cheap' -- I'm certainly not, but I have been concerned our planned income need is excessive, and I have a healthy concern for sequence of return risks, and the unknown over a long retirement.

After being taken aback, initially, I don't find I really have a strong counter-argument. I'm potentially retiring 5 years earlier, and with less money. :)

I guess what's immediately actionable is needing to adjust my own AA -- if it's not part of a collective pool, I don't want to be at 95% equities. Otherwise...anyone else continue -- in retirement -- treating accounts individually?

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Re: Separate $ in...retirement??

Post by Jack FFR1846 » Fri Nov 15, 2019 1:49 pm

As you treat your money separately, I would submit that you only look at your own retirement savings and calculate your own spending and then figure out if you're ok to retire and support yourself.

Treating the money as his and hers is foreign to me.....with my wife having stayed home with the kids, I'd literally be driving my Lamborghini around in retirement and she'd be walking to the bus stop.
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Silk McCue
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Re: Separate $ in...retirement??

Post by Silk McCue » Fri Nov 15, 2019 1:51 pm

Given this turn of events you definitely need to change your AA. In addition you may need to work longer if she is going to spend in a manner outside of your previous understanding. Should she predecease you, you will need enough income and assets to live into your 90s. She may also need to change her AA to support her plans and if she doesn't the math MAY all fall apart for this early retirement.

I trust this will all work out. Be calm and carry on.

Cheer

retired@50
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Re: Separate $ in...retirement??

Post by retired@50 » Fri Nov 15, 2019 1:52 pm

This is tricky since you are married, can we assume you file taxes together as "Married, filing jointly"?

If so, then your income affects her income (dividends, cap gains, RMDs, interest) and her income affects your income (dividends, cap gains, RMDs, interest). So, pretending that each of you are "on your own" isn't really the case because of the reciprocal tax implications.

This may not add any clarity, just another variable to consider... Best of luck.

Regards,

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JoeRetire
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Re: Separate $ in...retirement??

Post by JoeRetire » Fri Nov 15, 2019 1:54 pm

nick evets wrote:
Fri Nov 15, 2019 1:44 pm
However, my wife is now suggesting we simply each control and spend from our retirement portfolios as we see fit. This is a curve ball. Her point is she's worked too hard over her life (can't deny that), and wants to spend whatever she wants. If she can't she'll just...keep working.
This is very confusing, and I can imagine it was quite a shock.

Do you understand her reasoning? Do you agree with it?
I think a lot of this is driven by fear that I will become 'cheap' -- I'm certainly not, but I have been concerned our planned income need is excessive, and I have a healthy concern for sequence of return risks, and the unknown over a long retirement.

After being taken aback, initially, I don't find I really have a strong counter-argument. I'm potentially retiring 5 years earlier, and with less money. :)
But you fear running out of combined money. So certainly you must now fear that she will run out of money once your finances are separated?
I guess what's immediately actionable is needing to adjust my own AA -- if it's not part of a collective pool, I don't want to be at 95% equities.
That makes sense.
Otherwise...anyone else continue -- in retirement -- treating accounts individually?
I've never heard of it, other than for those that had always kept their finance completely separate through the duration of their marriage.

I don't want to be nosy, but is everything else okay with you two?

Certainly some long discussions are in order. Minimally, you want to understand the boundaries of this new financial arrangement - who pays for what, what happens if one of you runs out of money, etc, etc.

Normally couples should coordinate their social security benefits claiming strategy. You might want to talk about how that would work as well.

Complicated!
Last edited by JoeRetire on Fri Nov 15, 2019 2:03 pm, edited 3 times in total.
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Silk McCue
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Re: Separate $ in...retirement??

Post by Silk McCue » Fri Nov 15, 2019 1:55 pm

retired@50 wrote:
Fri Nov 15, 2019 1:52 pm
This is tricky since you are married, can we assume you file taxes together as "Married, filing jointly"?

If so, then your income affects her income (dividends, cap gains, RMDs, interest) and her income affects your income (dividends, cap gains, RMDs, interest). So, pretending that each of you are "on your own" isn't really the case because of the reciprocal tax implications.

This may not add any clarity, just another variable to consider... Best of luck.

Regards,
+1

In my opinion taxes cannot be shared on a straight line basis. The one potentially driving rates into a higher bracket by exceeding the other's withdrawals would need to be responsible for that. It's part of the math.

Cheers

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LilyFleur
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Re: Separate $ in...retirement??

Post by LilyFleur » Fri Nov 15, 2019 2:06 pm

There are lots of unknowns...what type of lifestyle will your half of the retirement allow you to live? Does your wife want to take expensive cruises, for example, that you would not be able to afford? Will her spending be for things the two of you do together, or things she does on her own, or with her friends and family?

What is the care plan for the partner in your marriage that is the survivor?

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celia
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Re: Separate $ in...retirement??

Post by celia » Fri Nov 15, 2019 2:25 pm

We have, "his", "hers", and "ours" accounts, but our IRAs and retirement accounts are considered "joint" (mentally) because the money that funded them was withheld from our wages which was considered joint at the time. Since you've only been married for 20 years, maybe you need to consider how much was in each retirement account at the time of marriage and that amount (plus growth) could be considered your own. Each of you could even divide up your IRAs into two accounts, representing "my" IRA and "our" IRA.

We also each have inherited accounts. Those we've kept in our individual names and it gives each of us a sense of security and ability to choose someone other than our spouse as the beneficiary, since we don't really need them at this point.

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Re: Separate $ in...retirement??

Post by MotoTrojan » Fri Nov 15, 2019 2:29 pm

How do your portfolio sizes compare? What happens if you use a 3% SWR and she withdraws 8% annually and goes bust; do you get to send her to the food lines? I would have those decisions in advance.

This would make me uncomfortable but so would separate accounts during marriage/accumulation.

Topic Author
nick evets
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Re: Separate $ in...retirement??

Post by nick evets » Fri Nov 15, 2019 2:34 pm

The tax liability is a good point -- I hadn't considered that.
LilyFleur wrote:
Fri Nov 15, 2019 2:06 pm
There are lots of unknowns...what type of lifestyle will your half of the retirement allow you to live? Does your wife want to take expensive cruises, for example, that you would not be able to afford? Will her spending be for things the two of you do together, or things she does on her own, or with her friends and family?

What is the care plan for the partner in your marriage that is the survivor?
I'm still taking the temperature of the room, so to speak.

Yes, she does want to travel; a lot. She would certainly pay for me, if needed, and has been incredibly generous all of her life, but I don't care so much for travel, regardless (I'm a Foreign Service brat, and happy to never see another airplane <grin>). So I think we're just having some fundamental differences creating a shared vision of retirement.

This is probably a lot less about the specifics of spending -- which is what I'm wrapped up in -- and more about how we're going to live our lives together moving forward. My focus and concern that our spending will be too aggressive and we'll need to adjust our SWR, etc., is met with the opposite reaction from my wife.

I think we:
-Need more conversation
-Should adjust our individual accounts to the desired AA
-Explore some way of 'front-loading' the first few years of retirement: I know 'buckets' are a disliked term but I suspect if we pulled out two years, of the current planned expense, and padded it generously, we wouldn't really spend it all over the two years, and get a better sense of actual needs.

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LilyFleur
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Re: Separate $ in...retirement??

Post by LilyFleur » Fri Nov 15, 2019 2:44 pm

Travel vs. no travel seems to be linked to your individual happiness--and hers--as well as retirement income needed. Is there any way you would consider working a year or two longer in order to save more for retirement while she travels and gets some of that out of her system? It sounds like she wants to make sure she can spend on her travel, and is willing to pay for you to come along, but that she has worked hard and doesn't want to sacrifice her vision of retirement which involves a good amount of travel.

I am single, and I have found that travel is certainly a factor in the relationships I've had with retired men.

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Re: Separate $ in...retirement??

Post by Katietsu » Fri Nov 15, 2019 3:04 pm

I agree that the immediate step is to adjust each asset allocation in to reflect the desired allocation individually.

You already have decades of operating with his, hers and ours. I am actually surprised that you planned to move away from this in retirement after establishing that approach.

Do you fear that her plans will mean that she will not be able to contribute her predetermined amount to the joint account after a few years? Have you talked about an upper limit of withdrawal such as a 4% SWR or a VPW approach? If so, does she have plans to exceed those limits? Or are you suggesting something extreme like limiting withdrawals to 2% or assuming social security will not be there?

More importantly, have you actually talked specific numbers to know how far apart you are? Sometimes my DH and I seem like we have entirely different ideas on how economical/luxury to go on a purchase. Then we realize that the difference in our actual numbers might represent a few thousand dollars a year, not something that would actually derail our retirement.

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celia
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Re: Separate $ in...retirement??

Post by celia » Fri Nov 15, 2019 3:18 pm

Katietsu wrote:
Fri Nov 15, 2019 3:04 pm
You already have decades of operating with his, hers and ours. I am actually surprised that you planned to move away from this in retirement after establishing that approach.
It depends on what the agreement is for his, hers, and ours. In our case, our separate accounts are a fixed amount of money that we can spend as we wish (ie, an allowance), with most of it going to joint. You could also have separate accounts that hold your remaining pay after you contribute a fixed or proportional-to-wages amount to joint. Many other variations exist, depending on if you both work, both have retirement income, have similar discretionary spending "wants", etc.

Maybe it's time to start discussing your retirement income compared to your working income and if it will be divided up like you currently do. How will the basic bills (housing, food) be paid vs discretionary (travel, gifts, charitable donations)?

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Re: Separate $ in...retirement??

Post by aristotelian » Fri Nov 15, 2019 3:37 pm

I am tempted to do something similar. My wife and I are very compatible and have similar values and have had no issues with joint finances throughout our marriage...except that she wants to live in a HCOL city when we retire and I do not. I do not think it is necessary to go fully to separate finances, but I think it could be reasonable to retire when we can support our current lifestyle, and then say if you want to move to HCOL, you get to pay for it, whether by working longer or saving extra on the side.

delamer
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Re: Separate $ in...retirement??

Post by delamer » Fri Nov 15, 2019 4:17 pm

How is your wife proposing that you handle basic joint expenses?

Presumably there still will be housing, food, insurance, taxes, etc. that you both benefit from and share the cost for?

I can imagine a system where you both agree to contribute the same amount to basic expenses but then spend the rest of your money as you wish.

However, you both need to be prudent enough to budget so that the basics can be covered in perpetuity.

But honestly, I think you are right about the need for a shared vision. If it’s any consolation, my husband and I have always had joint finances but still are “in discussion” about how much travel and to where in retirement.

dboeger1
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Re: Separate $ in...retirement??

Post by dboeger1 » Fri Nov 15, 2019 5:08 pm

nick evets wrote:
Fri Nov 15, 2019 1:44 pm
Her point is she's worked too hard over her life (can't deny that), and wants to spend whatever she wants.
...
After being taken aback, initially, I don't find I really have a strong counter-argument.
I have a really strong counter-argument you can borrow:

0.

That's how much you'll (and by you, I mean both of you collectively) will end up with if you "spend whatever you want". No, you don't get to spend "whatever you want". You get to spend what you've saved and invested. I suppose more to a degree, if you go into debt, but I think it's safe to say you don't have unlimited money.

If you and your wife don't want to budget together, or have different expectations of freedom on spending, that's fine. The concept of separating finances in marriage is foreign to me, but my wife and I certainly don't represent every couple, and I have good friends who swear by keeping separate finances. That's not the part that's troubling me. It's your wife's assertion that she can just spend whatever she want freely without carefully budgeting her retirement (in her defense, that's just the way you quoted her to us; she may never have said exactly that).

Regardless of how you end up doing it, careful budgeting is an absolute must for a mature couple to properly manage their finances in retirement. That should be non-negotiable. Whether you create separate spending accounts or not is up to you, but that's ultimately just a detail. Before the money ever hits those accounts, you both must come together as a responsible couple and make an explicit decision on how much to fund those accounts with. If you think you're both just going to draw down the shared funds blindly without planning and everything's going to be fine, then you're leaving the longevity of your portfolio up to chance.

Don't do that to yourselves. If your wife has worked too hard for too many years to count pennies, then she has also worked too hard for too many years to end up broke. I know Bogleheads tend to view Dave Ramsey's financial advice as too simplistic and directed at financial illiterates, but I feel like this is the kind of basic budgeting advice he would give. You and your wife both need to take control of your emotions and stay the course. If a separate discretionary spending account is what she needs for her sanity, that's what you should do. But absolutely do not treat the whole portfolio as funny money. It's not going to be funny when one of you needs surgery, or your house gets a leaky roof, or life in general otherwise happens.

timemoveson
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Re: Separate $ in...retirement??

Post by timemoveson » Fri Nov 15, 2019 5:22 pm

nick evets wrote:
Fri Nov 15, 2019 1:44 pm
For 20 years of marriage my wife and I have had a 'his,' 'hers,' and 'ours,' account. It's worked out well: we've been fortunate to have good jobs over most of our lifetime, and are on the cusp of retirement. A couple points that may or may not be germane:
1) we don't have children, and no desire to leave an estate beyond some nominal gifts to relatives and any balance to charity
2) my wife is 5 years older: current plan is to both retire in the next year or two. I'll be 55 or 56, and she'll be 60 or 61.
3) her retirement portfolio is about 35% larger than mine (she's worked longer at higher-paying jobs).
4) To achieve an overall household 60/40 AA I'm 95/5 and she's 40/60.

We've done quite a bit a of planning, and worked hard on calculating anticipated income needs in retirement. Working with various retirement planners (through work, online, rule of 4%, etc.) I'm cautiously optimistic that retirement is an imminent possibility. I assumed once retirement started we would 'combine' assets entirely.

However, my wife is now suggesting we simply each control and spend from our retirement portfolios as we see fit. This is a curve ball. Her point is she's worked too hard over her life (can't deny that), and wants to spend whatever she wants. If she can't she'll just...keep working. I think a lot of this is driven by fear that I will become 'cheap' -- I'm certainly not, but I have been concerned our planned income need is excessive, and I have a healthy concern for sequence of return risks, and the unknown over a long retirement.

After being taken aback, initially, I don't find I really have a strong counter-argument. I'm potentially retiring 5 years earlier, and with less money. :)

I guess what's immediately actionable is needing to adjust my own AA -- if it's not part of a collective pool, I don't want to be at 95% equities. Otherwise...anyone else continue -- in retirement -- treating accounts individually?
Well, the "good news" is that in much of your country and many places in the world, the outcome of the divorce proceedings would more or less ensure that what's hers will be yours, and everything will be equalized so you can both share similar lifestyles when you are no longer married.

I hope this doesn't became a really big money issue for you OP.

Seriously, I do realize that there are many different models couples use, and successfully. But, I cannot imagine how it would feel after 20 years to be "surprised" by this financial and relationship revelation. That is a pretty damn big surprise. Enough to rock someone's world view. It sounds exactly like being surprised by the affair, or surprised by the demand for a divorce, or the request for an open marriage.

I personally cannot conceive of a model where things were kept separately for decades during working years and for that intent to continue. But that is just me. It is completely counter to my ethos, values and in fact the practical reality of the legal system that would very quickly correct any "working arrangement" I thought I had with my wife.

dbr
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Re: Separate $ in...retirement??

Post by dbr » Fri Nov 15, 2019 6:22 pm

nick evets wrote:
Fri Nov 15, 2019 1:44 pm

4) To achieve an overall household 60/40 AA I'm 95/5 and she's 40/60.

. . .snip

I guess what's immediately actionable is needing to adjust my own AA -- if it's not part of a collective pool, I don't want to be at 95% equities. Otherwise...anyone else continue -- in retirement -- treating accounts individually?
I would say 4) was never actually operational and just a fiction you have been following. What has your wife been saying about this? The consequences were probably actually positive as the stock market has had a good run up the last ten years. It seems generally agreed you should allocate to a more comfortable allocation.

It would be obvious your wife is already treating the accounts individually, so you don't have much choice.

Of course you also say your wife is/would be generous in gifting you expenditures you couldn't or wouldn't make, so there is some wiggle room.

As someone else asked, who bails whom out if one or the other of you crashes?

marcopolo
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Re: Separate $ in...retirement??

Post by marcopolo » Fri Nov 15, 2019 6:32 pm

nick evets wrote:
Fri Nov 15, 2019 1:44 pm
For 20 years of marriage my wife and I have had a 'his,' 'hers,' and 'ours,' account. It's worked out well: we've been fortunate to have good jobs over most of our lifetime, and are on the cusp of retirement. A couple points that may or may not be germane:
1) we don't have children, and no desire to leave an estate beyond some nominal gifts to relatives and any balance to charity
2) my wife is 5 years older: current plan is to both retire in the next year or two. I'll be 55 or 56, and she'll be 60 or 61.
3) her retirement portfolio is about 35% larger than mine (she's worked longer at higher-paying jobs).
4) To achieve an overall household 60/40 AA I'm 95/5 and she's 40/60.

We've done quite a bit a of planning, and worked hard on calculating anticipated income needs in retirement. Working with various retirement planners (through work, online, rule of 4%, etc.) I'm cautiously optimistic that retirement is an imminent possibility. I assumed once retirement started we would 'combine' assets entirely.

However, my wife is now suggesting we simply each control and spend from our retirement portfolios as we see fit. This is a curve ball. Her point is she's worked too hard over her life (can't deny that), and wants to spend whatever she wants. If she can't she'll just...keep working. I think a lot of this is driven by fear that I will become 'cheap' -- I'm certainly not, but I have been concerned our planned income need is excessive, and I have a healthy concern for sequence of return risks, and the unknown over a long retirement.

After being taken aback, initially, I don't find I really have a strong counter-argument. I'm potentially retiring 5 years earlier, and with less money. :)

I guess what's immediately actionable is needing to adjust my own AA -- if it's not part of a collective pool, I don't want to be at 95% equities. Otherwise...anyone else continue -- in retirement -- treating accounts individually?

I am a little confused as to why you are surprised. You have kept separate finances for 20+ years. Why are you now surprised that she might want to continue to do that in retirement? I wonder if she is equally surprised that you "assumed once retirement started we would 'combine' assets entirely.".
What made you assume that? Did you discuss this assumption with her previously?

I agree that if you keep separate finances, it would make sense for each to keep their desired AA in their portion rather than as a single portfolio.
Once in a while you get shown the light, in the strangest of places if you look at it right.

flaccidsteele
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Re: Separate $ in...retirement??

Post by flaccidsteele » Fri Nov 15, 2019 6:44 pm

marcopolo wrote:
Fri Nov 15, 2019 6:32 pm
I am a little confused as to why you are surprised. You have kept separate finances for 20+ years. Why are you now surprised that she might want to continue to do that in retirement? I wonder if she is equally surprised that you "assumed once retirement started we would 'combine' assets entirely.".
What made you assume that? Did you discuss this assumption with her previously?

I agree that if you keep separate finances, it would make sense for each to keep their desired AA in their portion rather than as a single portfolio.
+1 This

My spouse and I keep somethings separate and somethings together

It wouldn't make sense for me to expect this to change in retirement

HomeStretch
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Re: Separate $ in...retirement??

Post by HomeStretch » Fri Nov 15, 2019 6:55 pm

Address the relationship issue, if any, and then come to a mutual agreement on how to handle the finances. You can both work this out if you want to. Best of luck.

sls239
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Re: Separate $ in...retirement??

Post by sls239 » Fri Nov 15, 2019 7:07 pm

I think your wife values her independence and is potentially afraid of losing that in retirement.

Try and empathize with that.

She speaks as if she simply wants to be in charge of her own life, not that she wants to hoard her money away from you or blow through it all.

I don't think drastic changes in your finances are necessary.

dbr
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Re: Separate $ in...retirement??

Post by dbr » Fri Nov 15, 2019 7:10 pm

sls239 wrote:
Fri Nov 15, 2019 7:07 pm
I think your wife values her independence and is potentially afraid of losing that in retirement.

Try and empathize with that.

She speaks as if she simply wants to be in charge of her own life, not that she wants to hoard her money away from you or blow through it all.

I don't think drastic changes in your finances are necessary.
Given the wife favors a 40/60 asset allocation I think asking her what she thinks of being 95/5 would be interesting.

Trader Joe
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Re: Separate $ in...retirement??

Post by Trader Joe » Fri Nov 15, 2019 7:22 pm

nick evets wrote:
Fri Nov 15, 2019 1:44 pm
For 20 years of marriage my wife and I have had a 'his,' 'hers,' and 'ours,' account. It's worked out well: we've been fortunate to have good jobs over most of our lifetime, and are on the cusp of retirement. A couple points that may or may not be germane:
1) we don't have children, and no desire to leave an estate beyond some nominal gifts to relatives and any balance to charity
2) my wife is 5 years older: current plan is to both retire in the next year or two. I'll be 55 or 56, and she'll be 60 or 61.
3) her retirement portfolio is about 35% larger than mine (she's worked longer at higher-paying jobs).
4) To achieve an overall household 60/40 AA I'm 95/5 and she's 40/60.

We've done quite a bit a of planning, and worked hard on calculating anticipated income needs in retirement. Working with various retirement planners (through work, online, rule of 4%, etc.) I'm cautiously optimistic that retirement is an imminent possibility. I assumed once retirement started we would 'combine' assets entirely.

However, my wife is now suggesting we simply each control and spend from our retirement portfolios as we see fit. This is a curve ball. Her point is she's worked too hard over her life (can't deny that), and wants to spend whatever she wants. If she can't she'll just...keep working. I think a lot of this is driven by fear that I will become 'cheap' -- I'm certainly not, but I have been concerned our planned income need is excessive, and I have a healthy concern for sequence of return risks, and the unknown over a long retirement.

After being taken aback, initially, I don't find I really have a strong counter-argument. I'm potentially retiring 5 years earlier, and with less money. :)

I guess what's immediately actionable is needing to adjust my own AA -- if it's not part of a collective pool, I don't want to be at 95% equities. Otherwise...anyone else continue -- in retirement -- treating accounts individually?
No, this has not and would never happen to me.

Some feedback on your post:

1. It never worked out well - as you are now experiencing.
2. I do not see this as a "curve ball". This is completely expected - from the very beginning.
3. I am not sure why you are "taken aback" You agreed to this arrangement 20 years ago. Again, no surprise here.
4. Yes, adjust your own AA as if you are all single and all alone in retirement.

FYI my wife and I agreed on this topic well in advance of marriage. We combined everything from the very beginning. We (and our portfolio) are one. That is what real marriage/commitment/partnership is all about.

Gnirk
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Re: Separate $ in...retirement??

Post by Gnirk » Fri Nov 15, 2019 7:28 pm

Second marriage for us, nearly 25 years.

We agreed before we married to keep all of our finances separate because we both have children from a previous marriage. 90% of our portfolios are in taxable, and we don't have pensions. Our income is from SS, small RMDs and taxable. We each maintain our own AA....his portfolio is 60/40 and mine is 40/60 right now.
My portfolio is 1/4 the size of his. He is frugal, but spends what he wants on what he wants and pays the majority of our joint expenses.
I pay about 25% of our joint expenses, and then can do what I want with the rest of my income.

Have you discussed how you will pay your joint expenses?

Our investments, other than the small IRAs, will go to our respective children.

JediMisty
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Re: Separate $ in...retirement??

Post by JediMisty » Fri Nov 15, 2019 8:56 pm

Gnirk wrote:
Fri Nov 15, 2019 7:28 pm
Second marriage for us, nearly 25 years.

We agreed before we married to keep all of our finances separate because we both have children from a previous marriage. 90% of our portfolios are in taxable, and we don't have pensions. Our income is from SS, small RMDs and taxable. We each maintain our own AA....his portfolio is 60/40 and mine is 40/60 right now.
My portfolio is 1/4 the size of his. He is frugal, but spends what he wants on what he wants and pays the majority of our joint expenses.
I pay about 25% of our joint expenses, and then can do what I want with the rest of my income.

Have you discussed how you will pay your joint expenses?

Our investments, other than the small IRAs, will go to our respective children.
This is the model of finances in marriage I prefer. The percentage of expenses paid is equal to the relative salary. In retirement, the relative assets would substitute for salary in the formula. I have a child from my former marriage. Should I ever remarry, I would want to keep my finances separate. My current S.O. has 25% of my net worth. He lives in my home rent free but contributes by fixing things and pitching in work on home projects. Still, in retirement, each partner must work in concert to not overspend. Just as if they had combined incomes. Legally, IRAs and 401ks can't be combined anyway. But should I leave this mortal coil early, I expect to leave most of my funds to my now adult child. I don't want my son's inheritance to end up in another family's hands.

dbr
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Re: Separate $ in...retirement??

Post by dbr » Fri Nov 15, 2019 9:31 pm

Just a minor mathematical quibble. If A has one quarter the assets of B, then A pays 1/5 of the costs not 1/4.

bluquark
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Re: Separate $ in...retirement??

Post by bluquark » Fri Nov 15, 2019 10:01 pm

Personally, I see combining finances to be a logical arrangement for single/imbalanced earners with children, and separate finances with occasional pooling to be a logical arrangement for dual earners with no children. I'm not sure being retired or not changes anything.

The cost of children is very high and a lot of the cost involved is nonmonetary, so in that context it makes sense to pool most of the family's resources. But for a financially peer couple with no major strain on the finances, it's hard to see what is the benefit of switching to a nebulous, yet-to-be-defined process of shared control of expenses. It would just seem to introduce new burdens of negotiation and disclosure that are not needed.

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nick evets
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Re: Separate $ in...retirement??

Post by nick evets » Sun Nov 17, 2019 3:35 pm

sls239 wrote:
Fri Nov 15, 2019 7:07 pm
I think your wife values her independence and is potentially afraid of losing that in retirement.

Try and empathize with that.

She speaks as if she simply wants to be in charge of her own life, not that she wants to hoard her money away from you or blow through it all.

I don't think drastic changes in your finances are necessary.
Interesting comments all...I think the above most accurately sums the situation. It's a delicate balance - she has a larger retirement portfolio, and is willing to combine to allow both of us to retire early, but not at the expense of losing complete control and/or allowing me to fret about spending.

We've had a good discussion over the weekend, but there are some logistics to iron out. Example comment: "I don't want you saying we can't go on a trip because the market is down..."

The mechanics of our current arrangement are simple: we each pay a share of the bills roughly proportional to our income, and have a set amount drafted to a mutual account each month -- this is used for upkeep of our residences, pet care, and vacations. What's left, we each use as we see fit albeit with some attention to our overall budget. We don't track each other's spending, and we each have a 'discretionary' or 'fun' monthly budget of $500. Any big ticket items we discuss.

I still think in retirement is makes sense for one person (me!) to manage the assets overall, but do it in a manner that allows each to get a monthly paycheck -- I'm fine if her check is %30 larger, or whatever the difference is when we retire.

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MrBobcat
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Re: Separate $ in...retirement??

Post by MrBobcat » Sun Nov 17, 2019 4:34 pm

nick evets wrote:
Sun Nov 17, 2019 3:35 pm
sls239 wrote:
Fri Nov 15, 2019 7:07 pm
I think your wife values her independence and is potentially afraid of losing that in retirement.

Try and empathize with that.

She speaks as if she simply wants to be in charge of her own life, not that she wants to hoard her money away from you or blow through it all.

I don't think drastic changes in your finances are necessary.
Interesting comments all...I think the above most accurately sums the situation. It's a delicate balance - she has a larger retirement portfolio, and is willing to combine to allow both of us to retire early, but not at the expense of losing complete control and/or allowing me to fret about spending.

We've had a good discussion over the weekend, but there are some logistics to iron out. Example comment: "I don't want you saying we can't go on a trip because the market is down..."

The mechanics of our current arrangement are simple: we each pay a share of the bills roughly proportional to our income, and have a set amount drafted to a mutual account each month -- this is used for upkeep of our residences, pet care, and vacations. What's left, we each use as we see fit albeit with some attention to our overall budget. We don't track each other's spending, and we each have a 'discretionary' or 'fun' monthly budget of $500. Any big ticket items we discuss.

I still think in retirement is makes sense for one person (me!) to manage the assets overall, but do it in a manner that allows each to get a monthly paycheck -- I'm fine if her check is %30 larger, or whatever the difference is when we retire.
How much do you need (in your personal account, not hers) before you'll feel comfortable saying let's go on that trip even if the market is down? I'd base your retirement age on that.

As far as the rest of it, meh every marriage is different and each individual is different and has different needs. I wouldn't read anymore into it than what your wife told you. Adjust your investment allocations accordingly as should she.

In our marriage if my wife wanted to control all the accounts and investment choices I'd freak and compromise that she could look after hers and I'd look after mine... It's just the way I am. As it is she puts up with me handling all the money issues.

delamer
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Re: Separate $ in...retirement??

Post by delamer » Sun Nov 17, 2019 5:05 pm

nick evets wrote:
Sun Nov 17, 2019 3:35 pm
sls239 wrote:
Fri Nov 15, 2019 7:07 pm
I think your wife values her independence and is potentially afraid of losing that in retirement.

Try and empathize with that.

She speaks as if she simply wants to be in charge of her own life, not that she wants to hoard her money away from you or blow through it all.

I don't think drastic changes in your finances are necessary.
Interesting comments all...I think the above most accurately sums the situation. It's a delicate balance - she has a larger retirement portfolio, and is willing to combine to allow both of us to retire early, but not at the expense of losing complete control and/or allowing me to fret about spending.

We've had a good discussion over the weekend, but there are some logistics to iron out. Example comment: "I don't want you saying we can't go on a trip because the market is down..."

The mechanics of our current arrangement are simple: we each pay a share of the bills roughly proportional to our income, and have a set amount drafted to a mutual account each month -- this is used for upkeep of our residences, pet care, and vacations. What's left, we each use as we see fit albeit with some attention to our overall budget. We don't track each other's spending, and we each have a 'discretionary' or 'fun' monthly budget of $500. Any big ticket items we discuss.

I still think in retirement is makes sense for one person (me!) to manage the assets overall, but do it in a manner that allows each to get a monthly paycheck -- I'm fine if her check is %30 larger, or whatever the difference is when we retire.
She’s managed her own investments while working, but at retirement you want to change that?

On what basis?

Broken Man 1999
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Re: Separate $ in...retirement??

Post by Broken Man 1999 » Sun Nov 17, 2019 5:16 pm

She seems perfectly willing to work longer to fund her desires.

Hard to argue with that, it's not like you are going to have to pay for it. If you want to go with her, and don't want to drain your stash, go back to work.

Why would she think you are cheap, are you?

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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scubadiver
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Re: Separate $ in...retirement??

Post by scubadiver » Sun Nov 17, 2019 5:24 pm

nick evets wrote:
Sun Nov 17, 2019 3:35 pm
sls239 wrote:
Fri Nov 15, 2019 7:07 pm
I think your wife values her independence and is potentially afraid of losing that in retirement.

Try and empathize with that.

She speaks as if she simply wants to be in charge of her own life, not that she wants to hoard her money away from you or blow through it all.

I don't think drastic changes in your finances are necessary.
Interesting comments all...I think the above most accurately sums the situation. It's a delicate balance - she has a larger retirement portfolio, and is willing to combine to allow both of us to retire early, but not at the expense of losing complete control and/or allowing me to fret about spending.

We've had a good discussion over the weekend, but there are some logistics to iron out. Example comment: "I don't want you saying we can't go on a trip because the market is down..."

The mechanics of our current arrangement are simple: we each pay a share of the bills roughly proportional to our income, and have a set amount drafted to a mutual account each month -- this is used for upkeep of our residences, pet care, and vacations. What's left, we each use as we see fit albeit with some attention to our overall budget. We don't track each other's spending, and we each have a 'discretionary' or 'fun' monthly budget of $500. Any big ticket items we discuss.

I still think in retirement is makes sense for one person (me!) to manage the assets overall, but do it in a manner that allows each to get a monthly paycheck -- I'm fine if her check is %30 larger, or whatever the difference is when we retire.
I'm squarely in the camp of "Marriage is a partnership and there is no his or hers, only ours". That said, I understand that some couples prefer to keep their finances separate for a variety of reasons and often do so successfully. What you describe above seems reasonable. The only thing that caught me eye was the comment:
nick evets wrote:
Sun Nov 17, 2019 3:35 pm
We've had a good discussion over the weekend, but there are some logistics to iron out. Example comment: "I don't want you saying we can't go on a trip because the market is down..."
It does beg the question of whether or not your combined joint savings are sufficient to support the retirement lifestyle to which your spouse aspires. If that is not an issue, I think you are on a good path to resolving this matter.

Golfview
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Re: Separate $ in...retirement??

Post by Golfview » Sun Nov 17, 2019 5:29 pm

I think I would be thankful that I had a wife that contributed more then her share of money over the years with a greater income then I had,she has always come through for you so why are you feeling she would stop now?Be grateful you've had a generous and hard working wife!

Rosencrantz1
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Re: Separate $ in...retirement??

Post by Rosencrantz1 » Sun Nov 17, 2019 5:41 pm

MrBobcat wrote:
Sun Nov 17, 2019 4:34 pm
nick evets wrote:
Sun Nov 17, 2019 3:35 pm
sls239 wrote:
Fri Nov 15, 2019 7:07 pm
I think your wife values her independence and is potentially afraid of losing that in retirement.

Try and empathize with that.

She speaks as if she simply wants to be in charge of her own life, not that she wants to hoard her money away from you or blow through it all.

I don't think drastic changes in your finances are necessary.
Interesting comments all...I think the above most accurately sums the situation. It's a delicate balance - she has a larger retirement portfolio, and is willing to combine to allow both of us to retire early, but not at the expense of losing complete control and/or allowing me to fret about spending.

We've had a good discussion over the weekend, but there are some logistics to iron out. Example comment: "I don't want you saying we can't go on a trip because the market is down..."

The mechanics of our current arrangement are simple: we each pay a share of the bills roughly proportional to our income, and have a set amount drafted to a mutual account each month -- this is used for upkeep of our residences, pet care, and vacations. What's left, we each use as we see fit albeit with some attention to our overall budget. We don't track each other's spending, and we each have a 'discretionary' or 'fun' monthly budget of $500. Any big ticket items we discuss.

I still think in retirement is makes sense for one person (me!) to manage the assets overall, but do it in a manner that allows each to get a monthly paycheck -- I'm fine if her check is %30 larger, or whatever the difference is when we retire.
How much do you need (in your personal account, not hers) before you'll feel comfortable saying let's go on that trip even if the market is down? I'd base your retirement age on that.

As far as the rest of it, meh every marriage is different and each individual is different and has different needs. I wouldn't read anymore into it than what your wife told you. Adjust your investment allocations accordingly as should she.

In our marriage if my wife wanted to control all the accounts and investment choices I'd freak and compromise that she could look after hers and I'd look after mine... It's just the way I am. As it is she puts up with me handling all the money issues.
Wow... I read this and thought 'this could be me!' My wife and I (married in our late 40s) have "his", "hers" and "ours" accounts too - with the largest being the "ours" accounts. One big difference is that, by far, I brought more resources to the marriage (and subsequent retirement) than my DW. I manage ALL of "my" money and "our" money (investments) and she prefers this. Like you, I'd never give up managing my own IRA/roth/taxable accounts. Occasionally, I suggest to my DW that she might, perhaps, be interested in managing her IRAs/roth…. but, she seems to have little interest in doing that. I know my DW thinks of me as being on the "frugal side".... it'll be interesting to see how that plays out for us regarding expensive travel. To be honest, though, we've been fortunate and we shouldn't have to "discuss" travel costs too much.

Katietsu
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Re: Separate $ in...retirement??

Post by Katietsu » Sun Nov 17, 2019 5:56 pm

Maybe you could use an hourly fee financial advisor to provide safe spending guidelines. Maybe even something as limited as the $96 a year Plan Vision service. I understand that you probably already feel you know are aware of all the models for decumulation. But there are often times when spouse’s have an easier time assimilating information from a third party.

Dottie57
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Re: Separate $ in...retirement??

Post by Dottie57 » Sun Nov 17, 2019 6:29 pm

From Op’s post above

“ I still think in retirement is makes sense for one person (me!) to manage the assets overall, but do it in a manner that allows each to get a monthly paycheck -- I'm fine if her check is %30 larger, or whatever the difference is when we retire.”

I would not take kindly to someone who thinks they will decide my allotment from my own money.

If I were OP I would introduce my wife to several calculators that can recommend spending amounts. Ideas are Firecalc and i-orp. Also introduce wife to trinity study and 4% withdrawl rate.

Outer Marker
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Re: Separate $ in...retirement??

Post by Outer Marker » Sun Nov 17, 2019 8:53 pm

nick evets wrote:
Fri Nov 15, 2019 1:44 pm
For 20 years of marriage my wife and I have had a 'his,' 'hers,' and 'ours,' account. It's worked out well: we've been fortunate to have good jobs over most of our lifetime, and are on the cusp of retirement.
***
However, my wife is now suggesting we simply each control and spend from our retirement portfolios as we see fit. This is a curve ball.

After being taken aback, initially, I don't find I really have a strong counter-argument. I'm potentially retiring 5 years earlier, and with less money. :)

I guess what's immediately actionable is needing to adjust my own AA -- if it's not part of a collective pool, I don't want to be at 95% equities. Otherwise...anyone else continue -- in retirement -- treating accounts individually?
Wow. That's a lot to process. If I were you, I'd immediately reset my own AA to 60/40 and keep working for another 5 years until I had enough assets to be comfortable in my own retirement with my own money. I would not want to be a "kept man" on my wife's benevolence if she has expressed these feelings. Marriages can and do break up after 20+ years. I know from experience and thought it could never happen to me/us. I was the overwhelming breadwinner and shared everthing equally, but when it came to court, she waked away with more than half. Go figure. It sounds like in your case being financially "independent" to retire means having your own independence apart from your wife.

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Wiggums
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Re: Separate $ in...retirement??

Post by Wiggums » Sun Nov 17, 2019 9:29 pm

My coworker had his, hers and ours accounts and he is always complaining about the fairness. He is bad in other ways. For example, he’s gonna make the big push for retirement savings at age 50 because her spending is high and her income is lower and sporadic. It’s painful to watch.

My DW and I have one budget and we see all accounts as ours. We’ve always agreed on a budget and discuss big purchases beforehand. That works well for us.

I would think that the OP and his wife will be able to continue into retirement with the current arrangement. The “paycheck” in retirement will just come from their savings. They do need to discuss when one person passes, that the other is provided for before giving his/her children an inheritance. When two adults communicate well, they can make anything work. Unfortunately, I’ve seen many people get divorced just prior to retirement.

Good luck to you...

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