You are looking at a photograph Bossy took on Wednesday of her accountant. OK, maybe it’s Brian Dennehy, but the point is: Bossy’s accountant reminded her of Brian Dennehy.
The other point: oh yeah, the whole finance thing.
Bossy wants you to know she loved her accountant, and she loved being at an appointment with her accountant, and she loved working with her accountant to solve accountanty things.
Over the next several days, Bossy wants to talk about a few of the points brought up during her appointment beginning with this:
Bossy and her husband found out that Bossy needs her own retirement fund. Up until their appointment, Bossy and her husband were working under the misconception that the retirement fund Bossy’s husband recently set up can be for both of them.
No, says the accountant/financial advisor. Bossy can be named as a beneficiary on her husband’s retirement fund, but make no mistake: it is his retirement fund.
This is because Bossy’s husband has an IRA, which means, ah-ha! Individual Retirement Account. The thing about IRAs is they are built around individual specifics, such as income and age. Bossy’s income and age are not the same as her husband’s, and she would benefit from a different IRA structure.
In the case of a 401K, this is delivered through the employer — and so once again this is clearly individual. You can name your spouse as a beneficiary on your 401K, but strictly speaking this is not a joint retirement fund. The only thing joint about a 401K is the agreement you have between you and your spouse, and there are laws in place to protect this agreement.
But: if you are bringing in even a modicum of income, it behooves you to activate your own retirement fund — and can you believe all this financial talk has reduced Bossy to using words such as modicum and behoove?
And if one spouse has no income, the other spouse can purchase them an IRA, which has financial benefits over “sharing” a retirement fund because you are not paying taxes on this money, and because often individual IRAs and 401Ks have built-in limits that prevent couples from putting away the amount of money they are able to sock aside.
Not that Bossy would know a thing about having more money than limits allow.
If you have a very limited amount of money to put aside and a spouse’s employer matches their 401K, it probably makes sense to stick with this scenario since it doubles your kitty — but this needs to be reevaluated as employment situations change and/or more money becomes available.
Certainly the first order of business is to check into your retirement scenario and find out how you and your mate have things structured.
Go forth and investigate!