There are many decisions to be made once you walk down the aisle and say "I do," especially when it comes to how you and your spouse will manage the money you've each been investing on your own over the years.
For some, the instinct could be to combine your investments since you've already combined the rest of your lives. Plus, a ballooned portfolio balance may also seem appealing.
According to Dominique Broadway, a financial planner and Founder of Finances Demystified, you should generally avoid combining your investment accounts with your spouse. She notes, however, that every couple is different and should take their own personal relationship into account when thinking about this decision.
According to data from the U.S. Bureau of Labor Statistics, 961,000 women returned to the workforce between Dec. 2020 and Dec. 2021 compared to 666,000 men. And, women's overall participation in the workforce has actually increased from 20% in 1920 to about 47% in 2021, as stated by the U.S. Department of Labor. With more women earning their own money, they've begun to wonder whether they should combine their savings and investments with their partner's once they're married, or if they should continue to keep things separate.
"Traditionally, when people got married they combined everything," Broadway explains. "But over the last several years there has been a shift. Men used to be the sole providers but now women are earning more money and taking more control of their finances. So, more people are making the decision to not combine finances and instead, they keep them separate but work together toward their goals."
When deciding to combine your investment accounts, there are pros and cons that should be taken into account. For one, combining investment accounts (and your finances in general) can make it much easier to manage your money as a couple. You'd have fewer accounts to keep track of, fewer management fees to pay and fewer investments to monitor.
On the flipside, though, combining investment accounts could sometimes end up being a source of tension for a couple, particularly if one person enters the marriage with little to no money saved or invested while the other one has invested a significant amount.
And in the event of a divorce, you may not always agree on how those shared investment accounts should be divided.
"In the event of a divorce, the financial outcome will depend on the state you're in," Broadway says. "The marriage law and rights you have to the other person's assets will vary based on the state, the reason for divorce and the terms of the prenup, if there is one."
It's also important to keep in mind that while brokerage accounts may be combined, you cannot combine retirement accounts like 401(k)'s or IRAs. Since 401(k) accounts are tied to employment at a company, only the employee can enroll and contribute to one. And with IRAs, the name "individual retirement account" means that there is only one owner on the account.
If combining investment accounts doesn't seem like the right fit for you and your partner, keep in mind that you can still add each other as beneficiaries to your investment accounts — including your retirement accounts.
In this case, your spouse who you named as a beneficiary can't contribute to your investment accounts, but they would have access to your account and funds if something were to happen to you. In the event of a death, the other spouse would inherit the account and from there, they could roll it into their own 401(k), IRA or other account. Making each other the beneficiaries on your own retirement accounts ensures that you're both taken care of for the future.
And if you wish, you can also open up a brand new joint brokerage account once you're married, while still keeping your own brokerage accounts separate. With a joint brokerage account, both partners will have access to contribute money and make trades. Wealthfront and Betterment give an option to open up a joint investment account. And because they're both robo-advisors that pick investments for you based on your goals, risk tolerance and time horizon, they can take some of the hassle out of deciding which investments you should make together.
Wealthfront
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts
Fees
Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance
Bonus
None
Investment vehicles
Investment options
Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks
Educational resources
Offers free financial planning for college planning, retirement and homebuying
Terms apply.
Betterment
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn't require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance.
Fees
Fees may vary depending on the investment vehicle selected, account balances, etc. Click here for details.
Investment vehicles
Robo-advisor: Betterment Digital Investing IRA: Betterment Traditional, Roth and SEP IRAs 401(k): Betterment 401(k) for employers
Investment options
Stocks, bonds, ETFs and cash
Educational resources
Betterment offers retirement and other education materials
Terms apply. Does not apply to crypto asset portfolios.
The decision to combine or not combine your investment accounts with your spouse can sometimes be a stressful one. But keep in mind that you can maintain separate accounts and still make a team effort toward building your wealth.
"Keeping your finances separate does not mean you're not working together on your financial goals. You just have your money in separate accounts," Broadway says.
Lastly, and probably most importantly, Broadway highly recommends that couples have this conversation before they get married. This way, they can set expectations and devise a plan for how they will work toward their financial goals ahead of time. And if they aren't sure what the best option would be, they can always work with a certified financial planner to figure it out.