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1 vs 2 portfolio for 2 physician family

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  •  drlaomd 
    Participant
    Status: Physician
    Posts: 1
    Joined: 02/08/2019
    Disability Insurance

    Hi, i’ve been reading a lot about portfolio management recently. However I couldn’t find the exact answer to this question, If it’s already been asked, forgive me, and just point me to the right thread, thank you

     

    2 physician household, both working.

    Spouse 1

    401k and backdoor roth

    Spouse 2

    403, 457, and backdoor roth

     

    We will be contributing the max allowed each year. We do not have any taxable accounts yet. Will be doing total stock, intl stock, total bonds most likely, using index funds. May have to be creative with the 403/457 since there isn’t a true ‘total’ index fund option.

     

    Can someone please discuss pro’s and con’s of managing all 5 accounts as one portfolio vs managing each spouse separately as 2 portfolios’. It seems simpler to deal with each separately for now especially as we are starting out. Thoughts?

     

    thank you all

     

    #189357 Reply
     billy 
    Participant
    Status: Physician
    Posts: 127
    Joined: 04/07/2016

    It will be easier to rebalance each year if you treat the whole thing as one portfolio.  Plus this makes it easier since some plans wont have all the low expense options that you may want.  Then when you add in a taxable in a few years it will make it less of a chance of creating a wash sale if you tax loss harvest, and you will have options of placing the more tax efficient funds in the taxable and tax inefficient in the tax deferred or roth accounts.  Treat the whole account as one.

     

    For example- You can also then use the roth space to place whatever is not in each of your 401/403/457 plans and then only place the other categories in those.

    #189367 Reply
     Peds 
    Participant
    Status: Physician
    Posts: 2699
    Joined: 01/08/2016
    Can someone please discuss pro’s and con’s of managing all 5 accounts as one portfolio vs managing each spouse separately as 2 portfolios’.

    Click to expand…

    it should be treated as 1 large portfolio.

    pros: better, can pick best funds. and lastly: its one big pot. therefore it should be treated as such.

    cons: none

     

    #189373 Reply
    Liked by Hank, ENT Doc
     ZZZ 
    Participant
    Status: Spouse
    Posts: 182
    Joined: 06/18/2018

    Sounds like you two are young, just go 100% US equities…portfolio allocation made easy. You’ll thank me in 30 years.

    #189421 Reply
    Liked by Zaphod
     hospitalist md 
    Participant
    Status: Physician
    Posts: 61
    Joined: 10/31/2017

    I am in the exact same spot as you are with the same pre-tax  retirement vehicles available. it does make it difficult to balance your portfolio when you have different funds available.

    I treat all our accounts as one large pile ..including taxable and try to rebalance as best as possible. I use personal capital to assess my asset allocation, which makes it easy .

    #189448 Reply
     Neuron 
    Participant
    Status: Physician
    Posts: 7
    Joined: 05/08/2018

    In case you venture into taxable savings, I am under the impression that non-protected assists (like taxed accounts) should be kept separated to avoid some of the risk of a malpractice case in excess of insurance limits. My understanding is a joint account would be fair game, while assets kept solely by the non-sued spouse would be protected, with evidence that the account was steadily funded by the earnings of that spouse. I am not a lawyer though.

    #189465 Reply
     hospitalist md 
    Participant
    Status: Physician
    Posts: 61
    Joined: 10/31/2017

    @neuron- I Haven’t really thought about that… good point though… I shud look into it… currently we have a joint account …

    #189472 Reply
     Peds 
    Participant
    Status: Physician
    Posts: 2699
    Joined: 01/08/2016

    In case you venture into taxable savings, I am under the impression that non-protected assists (like taxed accounts) should be kept separated to avoid some of the risk of a malpractice case in excess of insurance limits. My understanding is a joint account would be fair game, while assets kept solely by the non-sued spouse would be protected, with evidence that the account was steadily funded by the earnings of that spouse. I am not a lawyer though.

    Click to expand…

    This is not correct.

    #189474 Reply
    Liked by Zaphod, DCdoc
     hospitalist md 
    Participant
    Status: Physician
    Posts: 61
    Joined: 10/31/2017

    @peds- so is the joint account not really at risk during mal practice case?

    #189478 Reply
     Neuron 
    Participant
    Status: Physician
    Posts: 7
    Joined: 05/08/2018

    Community Property States vs. Common Law

     

    This is may be state dependent.

    #189480 Reply
     Tim 
    Participant
    Status: Accountant
    Posts: 1121
    Joined: 09/18/2018

    Many posts bring up both malpractice and personal liabilities ( malpractice and umbrella policies).
    How your accounts are titled and ownership vary from state to state and impact the legal protections available.
    I would default to thinking a joint account will be at risk unless you have used an attorney for trusts and estate planning. Hint: personal assets will be difficult to protect.

    Your question was asset allocation. Simpler is easier, one target and go ! Is it the “best”?
    Two targets allows her choices and your choices to be reflected. Honestly, two people will have two perceptions of risk and AA. I doubt two will take much more time to maintain. Which one performs better? His or hers I bet. There isn’t a correct answer.

    #189487 Reply
    Liked by Anne
     Anne 
    Participant
    Status: Physician
    Posts: 712
    Joined: 11/07/2017

    I have a slightly different view–do whatever approach minimizes arguments about money and prevents either party from freaking out in a downturn.

    #189519 Reply
     Tim 
    Participant
    Status: Accountant
    Posts: 1121
    Joined: 09/18/2018

    @anne,
    I completely agree. There is a sense of individual accomplishment or normal reactions to movements.
    If my wife wants it separate, great. Actually, she was adamant to buy some Apple a long time ago. It’s her account, I got her to trim down the percentage a ton.
    “My Apple” gets brought up in good times. Glad she watches it. Makes it easier to calm her when statements come on like December. How did Apple do? Deflection and pivot, what are we doing for dinner!

    #189539 Reply
    Liked by Anne

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