I keep seeing this comment but it's simply not possible and a throw away line. Well except maybe when one spouse works for salary only an entire life and the other never works and worker saves 100% in a single 401K/403B and never has a HSA nor taxable nor college savings nor options etc, so practically impossible today, although maybe someone somewhere fits that profile.Setting up a simple one-fund portfolio requiring no management:
Just between my spouse and we have (and we run this as joint everything, not you/me/us which would ramp up the complexity here) :-
- 2 x non-deductible Trad IRA (in the days before Roth's when that made sense and they carry a basis)
- 2 x Roth's since they existed (late 90's?)
- 2 x Rollover IRA from past employers (zero basis) (yes I know they can now technically be combined with Non-deduct Trad's but not practical if you want to ensure portability to employer plans in the future and does not change the scale)
- 2 x HSA's
- 1 x Joint Taxable
- 2 x 401K
- <several> old 401K's that don't get rolled over for various reasons, mostly around keeping access to certain funds
- 2 x Profit sharing / "top hat" plans
- 3 x Stock options & RSU's
- 2 x ESPP
- Add in 529 plans for college of some kids and potentially trust accounts and this get more numerous
Ignoring that last point, it's still at least two dozen funds and stock assets across a number of vendors, accounts and account types. Surprisingly - it's more funds than one security per account due to rebalancing, fund options, account types and optimizing of account type location.
- A number of those have limited options on vendor or fund choices.
- We can never cross merge our IRA's as they reman individual.
- We can never merge each of our Roth & Trad etc.
The tax system does not allow for a single account & fund.
I too am concerned that my uninterested spouse can deal with this complexity as it's hidden in arcane terminology & tax rules. Some account types have very specific actions & limitations. It's not as simple as saying dump everything into a single fund and moving on..... so we do need to think about how to deal with this type of issue.
Statistics: Posted by rob — Mon Jul 15, 2024 11:36 pm
