Dear Dr. Don,
My wife and I have always combined our finances. When it comes to our retirement investments — 401(k), 457 plan and Roth IRA — we treat them as if they were one portfolio. Throughout the accounts, we have foreign, bond and U.S. exposure (small caps, mid caps, large caps and a REIT). I believe we are well-diversified and we monitor our allocation with quarterly rebalancing. Is there anything wrong with this approach?
— Dave Diversity
I’m with you. I only pay for two things on the Internet: my subscription to The Wall Street Journal online and a premium subscription to Morningstar.com. On Morningstar, I’m able to combine my retirement portfolio with my wife’s retirement portfolio and run portfolio analytics using Morningstar’s Portfolio X-Ray.
Some couples keep their monies separate — and there’s nothing wrong with that — but if you’re a couple, it’s all your money and you don’t want to double down on your exposures to different investments.
I’d actually go a step further and say that you shouldn’t separate retirement accounts from other nonretirement accounts. It’s all your money; take a holistic approach to how it’s invested. Diversification doesn’t just mean to diversify your retirement assets.
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