401K Contribution for Married Couples

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Drock3307
Posts: 15
Joined: Sat Aug 12, 2017 11:04 am

401K Contribution for Married Couples

Post by Drock3307 » Wed Jun 13, 2018 12:10 pm

Hello Bogleheads!

First, thank you in advance for taking the time to read this and responding!

My wife and I max out our ROTH IRAs and we each have a 401K account. Wife has T401K and R401K options and I have just T401K. My 401K returns are awful compared to my wife's so we decided we will contribute most into wife's 401K (almost maxed out) and will contribute into my 401K enough to get all of the employer match. All into traditional 401K but currently unable to max both 401Ks. We live in California. Am I doing the right thing or should I contribute to my own 401K for my protection? I figured in CA, everything is community property or 50/50 so it doesn't matter where contributions are made. Is this correct?

bradpevans
Posts: 355
Joined: Sun Apr 08, 2018 1:09 pm

Re: 401K Contribution for Married Couples

Post by bradpevans » Wed Jun 13, 2018 12:27 pm

Drock3307 wrote:
Wed Jun 13, 2018 12:10 pm
Hello Bogleheads!

First, thank you in advance for taking the time to read this and responding!

My wife and I max out our ROTH IRAs and we each have a 401K account. Wife has T401K and R401K options and I have just T401K. My 401K returns are awful compared to my wife's so we decided we will contribute most into wife's 401K (almost maxed out) and will contribute into my 401K enough to get all of the employer match. All into traditional 401K but currently unable to max both 401Ks. We live in California. Am I doing the right thing or should I contribute to my own 401K for my protection? I figured in CA, everything is community property or 50/50 so it doesn't matter where contributions are made. Is this correct?
more savings is, well, more savings, so that's part of the calculus. If the two of can only contribute X, then you fill her 401K due to better investment choices, expense ratios etc.

But that assumes you can only contribute X, which is a different question

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Duckie
Posts: 6061
Joined: Thu Mar 08, 2007 2:55 pm

Re: 401K Contribution for Married Couples

Post by Duckie » Wed Jun 13, 2018 3:51 pm

Drock3307 wrote:My 401K returns are awful compared to my wife's...
Returns depend on the options chosen and their expense ratios. What are the options in her 401k and in your 401k? List the fund names, ticker symbols, and plan expense ratios.

soccerrules
Posts: 803
Joined: Mon Nov 14, 2016 4:01 pm

Re: 401K Contribution for Married Couples

Post by soccerrules » Wed Jun 13, 2018 4:09 pm

Good feedback so far- i concur. Both should be contributing while working. We consider the money we save as OURS not his/hers.

Typically the general recommendation
1) Both 401K's up to employer match (even if you don't have the greatest funds you can find something)
2) Roth IRA
3a) Back to Fill up 401K (if you can't max both consider which 401K has the better options and contribute more there)
3b) HSA if you have one.
4) Taxable and 529's

Save as much as you can to the point of some discomfort and then increase savings as your income increases. Your 50+ year old self will thank you.
Don't let your outflow exceed your income or your upkeep will be your downfall.

sport
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Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 401K Contribution for Married Couples

Post by sport » Wed Jun 13, 2018 4:22 pm

Before I retired, I had a good, but not great, 401k. DW had a terrible 403b teacher's plan that specified annuities with insurance companies. We took the money she would have put into that and put it into my 401K instead. We also funded IRAs. So, you do what is best for the two of you, and do what you are able.

dalmatiandan
Posts: 42
Joined: Wed Dec 21, 2016 3:11 pm

Re: 401K Contribution for Married Couples

Post by dalmatiandan » Wed Jun 13, 2018 4:57 pm

Another vote for “ours” instead of “his/hers.” My spouse has a fantastic 403b with (cheap) Vanguard Target Retirement Fund options, so our household goal retirement contribution percentage for the year goes into that 403b and will do so until it is maxed, then we will reconsider my own plan/options. We max Roth x 2, also...

I would hate to plan for divorce too much, but that’s just me personally. At the moment, the best for our household is to use DW 403b as much as possible.

I can’t speak to community property, etc. I haven’t given it any thought.

Dan

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