September 30, 2025 • 12 mins
“Hey Mike, how do you create a plan for a couple who want to keep their finances separate?” Discover the challenges and strategies for building a plan when couples manage money individually.
Text your questions to 913-363-1234
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Mike (00:00):
It's an inequal distribution of power, which is
(00:02):
bullying. And it's it can bevery dysfunctional and
unnecessary stress forretirement. But people don't
look for marriage counselingnecessarily. I do end up doing
some in some sense, but here'sreally the the foundation of the
question. Here's kind of how yousolve it.
(00:25):
Welcome to How to Retire OnTime, a show that answers your
retirement questions. We're hereto move past that oversimplified
advice you've heard hundreds oftimes. Instead, we do want to
dive into the nitty grittybecause, well, it matters.
There's no such thing as aperfect investment product or
strategy. Heck, there's no suchthing as a perfect or riskless
retirement.
That's why these details matter.Text your questions to (913)
(00:45):
363-1234, and we'll feature themon the show. David, what do we
got today?
David (00:50):
Hey, Mike. How do you create a plan for a couple who
want to keep their financesseparate?
Mike (00:57):
The tricky part about this, because they're a couple,
assuming that they're married,is taxes. What one person does
from a tax standpoint affectsthe other person. So if there's
a second marriage, if there is aLet's say there's not a second
marriage, they just manage theirfinances separately. And maybe
(01:18):
one spouse is disadvantaged thanthe other because one spouse
worked and the other spousedidn't. I see these situations
every now and then, to whereit's like, that's That doesn't
make any sense.
You gotta work your wholecareer, and yeah, you paid, but
you also contributed more toyour four zero one k, and now
you're it's always the woman,almost always the woman, the
bride has less to work with, andyou're doing your finances
(01:40):
separately, this What in theworld's going on?
David (01:43):
Yeah. I yeah. I was wondering when I read this
question, like, often do you seethis? Do they keep their
finances separate, and whatcircumstances are they doing
that?
Mike (01:52):
Usually when when the woman is at home with the kids
raising them, the finances arecombined. The problem is when
the woman's at home, theirfinances are combined, a divorce
happens, maybe the woman didn'tget as much in the settlement or
the settlement in the divorce,and then marries someone, and
(02:13):
maybe that person has more orless assets. Now you have two
households, they're managingtheir finances separately, they
both want to live the same life,but they're now contributing
different allocations or amountsto percentages to the the
income. They're now saying,well, we'll all take care of
60%, you take care of 40%. Itgets very tricky.
In addition to that, maybe onespouse wants to travel more, and
(02:36):
one spouse doesn't see the valueof travel. Maybe one spouse
wants to buy a Winnebago, andthe other spouse couldn't be
bothered by a Winnebago. Maybeone spouse so you have a lot of
nuance in how you handle thefinances. Okay? Who pays for
what?
And people will say, well, wekind of have their system. And
I'll admit, like, I I don't balkat these things. When they say
(02:59):
they have their system, fine.They're not looking for marriage
counseling, but it's almostalways based on a bully system.
One person has more power thanthe other person.
It's an inequal distribution ofpower, which is bullying. And
it's it can be verydysfunctional and unnecessary
stress for retirement. Butpeople don't look for marriage
(03:22):
counseling necessarily. I do endup doing some in some sense, but
here's really the foundation ofthe question. Here's kind of how
you solve As dysfunctional orfunctional as you might be, and
that's up for you to decide.
I'm not really a judger in thatsense, but I have my opinions,
but I don't I'll work with youregardless. You decide your
(03:44):
system. But the first thingfirst is what's the lifestyle
that you both want to live? Youput together a plan with both of
your assets combined orcontributing to that plan.
That's how I prefer to do it.
And then what you do is you say,Okay, this is your Social
(04:05):
Security, this is your SocialSecurity, here's the different
ways that would be affected.You've got a pension, great, and
you've got the assets that weresaved, okay, here. And you start
to blend it all together, andthen you figure out
survivability. So what wouldhappen is if one spouse were to
pass or the other spouse were topass, and then you take two
portfolios and you figure out,okay, in each portfolio, how
(04:25):
much of a percent willcontribute to the household
income that's needed toaccomplish that goal?
David (04:32):
Okay.
Mike (04:33):
Then you've got to look at who has more in pre tax accounts
like IRAs, and who has moreaccount, more money maybe in a
non qualified like a brokerageaccount or a personal account.
Do they have a lot of money inRoth? So you have to figure out
that distribution. Then you'vegot to tie Do you see how
complicated this is? It getscomplicated.
(04:54):
Then you've got to sort throughthe ages, so who's going to be
subject to RMDs first, andyou've got to then start
considering RMD or IRA to Rothconversions in preparation for
the RMD, so the household is notdisrupted, but not disadvantages
the other spouse in casesomething happens. So it's a
very delicate balancing act. Wedo it all the time, but you've
(05:20):
got these different layers, andthere's a very specific order of
operation. You put the plantogether first, then you figure
out are there any landmarks orissues, RMDs, and so on. How
much do you have in thedifferent taxable accounts?
And then you start to constructthe portfolio based on the
protection needs, based on theincome needs, based on the
(05:40):
growth needs, based on theliquidity needs, and so on, so
that you can then say, alright,here's basically two portfolios,
they both support one plan. Nowthey're unified.
David (05:51):
So is this is this all worth it? Is it I mean, would
you ever try and convince acouple like, no, this is too
hard. Let's maybe you shouldjust combine everything or
share.
Mike (06:07):
It's a great question. When you see a fitness coach or
nutritionist, they're gonna askyou how committed you are and
how technical you wanna get.Uh-huh. Some people are gonna
wanna get so technical thatthey're measuring the macro and
micronutrients of their theirmeals. Other people are gonna
want flexible dieting.
(06:27):
So flexible, you've got, youknow, one quarter of your plate
in this type, one quarter inthis type, then a half your
plate in this type. Some people,it's calorie cal Everyone has a
different system. Mhmm. The jobof the nutritionist isn't to
force everyone into one systemthat some people will adopt and
others won't adopt. The job ofthe nutritionist is to help
people live healthily.
(06:49):
Our job isn't to force someoneto a certain system. Our job is
to work within the system thatthey want to live by and help
elevate their quality of life byallowing them to live. Many
people will let these nuanced,you know, things hold them back
from living their best life.They're like, well, I don't know
(07:09):
about this. They'll certainquestions, they'll avoid certain
conversations, and what ends uphappening is they'll work longer
than they want at a job theydon't care for, or they will
just kind of have this,sometimes a silent divorce.
They're married, but it's justlike they're more roommates than
anything else. Resentment cancome out. Mean, it's just all
(07:30):
these things that kind of holdback from your overall quality
of life. So I believe that thesethings should be addressed, and
because there's so many waysthat you can create a solution,
it's are you willing to have anopen conversation, not be
offended, but just be honestabout it. I mean marriage
counseling, for anyone that'sever done that, that's a very
(07:51):
uncomfortable thing.
But if implemented correctly,you've got a good marriage
counselor, you've got twoparties that are willing to work
things out, you typically end upwith a better marriage. So if
you can end up with a betterfinancial environment, a
healthier relationship with yourmoney, and a healthier
relationship with money and yourspouse, it typically leads to a
better overall quality of life,a better retirement to where you
(08:14):
can spend time, your mostprecious asset, maybe a little
bit more deliberately. I don'tknow. What do you think?
David (08:19):
Yeah. It sounds like I I feel like I say this every week,
but there's so many littlethings to consider. There's so
much more as as you dive intothe details, maybe details you
didn't know. You didn't knowthat that the pool was 10 feet
feet deep. You thought it was a,like, a kiddie pool.
Right? Yeah. And then youdiscover, oh, no. This this goes
deep if we want it to.
Mike (08:39):
Most people's solutions I have found, and this is
anecdotal, they are the kiddiepool. They're the simple
solution because it's all theycould really understand at the
time. They're not financialprofessionals. They don't really
understand what's going on, butthey don't understand. It's
like, you know when people hurtother people unintentionally?
They didn't mean to do it. Itjust kind of happened. So if you
(09:02):
have two spouses, let's say theyare doing things differently.
One spouse has a lot less thanthe other spouse, but they're
filing their their their taxesjointly. Well, one spouse with
the lesser amount with thelesser social security is paying
at a higher tax rate than theother spouse.
That's not fair. No. And so ifyou're gonna do it that way,
(09:22):
you've gotta it's like if if youif you want x, y, and z, you've
gotta be okay with a, b, c.There's there's a almost like a
contract with if you you have towant the consequences of your
actions.
David (09:36):
Mhmm.
Mike (09:37):
And so many times, I've said, alright, she it usually
it's usually she. She's gonnawithhold a lot less from her
social security, but you'regonna withhold a lot more. And
they'll say, well, that'sunfair. Well, you're creating
all these tax issues for her.Oh.
So it is actually fair, and wejust show the numbers and say,
you know, this is what's goingon. Mhmm. Sometimes, we will
(09:57):
actually run two plans, andthey'll have agreed that they're
gonna contribute x dollars permonth to the household, and so
run the plan separately, but thecaveat usually is, but you have
to file married filingseparately. And you're gonna
operate within your own lanes.So there is some marriage
counseling here.
Uh-huh. You can't have your cakeand eat it too, but these are
(10:19):
healthy beneficial conversationsbecause if your finances aren't
in order, what else isn't inorder? When people argue about
money, I have found it's notreally about the money, it's a
symptom of a deeper problem inthe relationship or within the
person. So these are good thingsto talk about. These are good
things to work through.
(10:40):
We don't want to shy away. Wedon't want to actively avoid
uncomfort or pain or I don'tknow, anything that would be
difficult. We want to addressthem, so once we get through it,
then we can enjoy more. Anyother thoughts on that?
David (10:55):
Sounds fair. Yeah. No. Sounds really fair. Everybody
has to be willing to be open andnot get offended, right, and
just
Mike (11:05):
talk. My wife is extremely kind and extremely giving.
Something we've had to work on,I'll admit openly is, I try to
make sure she knows she can askfor anything. And the expression
we have is, everything is anegotiation. So if she needs
help with something, and shemight she'll be maybe shy about
(11:27):
it and say, I don't want toinconvenience him.
It's like, no, I want you totell me. Yes, couples we we
inconvenience people. All peopleinconvenience other people.
That's how relationships work.
David (11:37):
Yeah.
Mike (11:38):
But it's okay to be inconvenienced. It's okay, but I
can't help you if I don't knowyour needs. And so, you know,
she'll say, hey, can you can youcome home and help me with this?
And I'll say, well, I've gotthis and this going on. She
says, I really need it for thesereasons.
I'll say, oh, got it. Thank youfor telling me. And I can I can
hear the hesitation, but it'slike, no, everything's a
(11:59):
negotiation? And she'll go,yeah, that's true. That's true.
Yeah. That's how it needs to bein a relationship. Even if
you're single, you'renegotiating with yourself. With
your friends, you're negotiatingwith your friends. In finance,
you're negotiating the riskversus the protection.
You're negotiating how you wannahandle your taxes. Everything in
life is a negotiation. So let'sget out of the black and white,
(12:21):
and let's really dive into thegray Mhmm. And find the right
shade for you. That's all thetime we've got for today's show.
If you enjoyed the show,consider telling a friend,
leaving a rating, and mostimportantly, that you are
subscribed to it so that youdon't miss a thing. For more
resources, including a copy ofmy book, on demand courses, and
so much more, just go towww.retireontime.com. If you
(12:44):
want help putting yourretirement plan together, go to
retireontime.com and click thebutton that says get started.
But seriously, from all of ushere at Kedrick Wealth, we wanna
thank you for spending yourtime, your most precious asset
with us today. We'll see you inthe next episode.
It's an inequal distribution of power, which is
(00:02):
bullying. And it's it can bevery dysfunctional and
unnecessary stress forretirement. But people don't
look for marriage counselingnecessarily. I do end up doing
some in some sense, but here'sreally the the foundation of the
question. Here's kind of how yousolve it.
(00:25):
Welcome to How to Retire OnTime, a show that answers your
retirement questions. We're hereto move past that oversimplified
advice you've heard hundreds oftimes. Instead, we do want to
dive into the nitty grittybecause, well, it matters.
There's no such thing as aperfect investment product or
strategy. Heck, there's no suchthing as a perfect or riskless
retirement.
That's why these details matter.Text your questions to (913)
(00:45):
363-1234, and we'll feature themon the show. David, what do we
got today?
David (00:50):
Hey, Mike. How do you create a plan for a couple who
want to keep their financesseparate?
Mike (00:57):
The tricky part about this, because they're a couple,
assuming that they're married,is taxes. What one person does
from a tax standpoint affectsthe other person. So if there's
a second marriage, if there is aLet's say there's not a second
marriage, they just manage theirfinances separately. And maybe
(01:18):
one spouse is disadvantaged thanthe other because one spouse
worked and the other spousedidn't. I see these situations
every now and then, to whereit's like, that's That doesn't
make any sense.
You gotta work your wholecareer, and yeah, you paid, but
you also contributed more toyour four zero one k, and now
you're it's always the woman,almost always the woman, the
bride has less to work with, andyou're doing your finances
(01:40):
separately, this What in theworld's going on?
David (01:43):
Yeah. I yeah. I was wondering when I read this
question, like, often do you seethis? Do they keep their
finances separate, and whatcircumstances are they doing
that?
Mike (01:52):
Usually when when the woman is at home with the kids
raising them, the finances arecombined. The problem is when
the woman's at home, theirfinances are combined, a divorce
happens, maybe the woman didn'tget as much in the settlement or
the settlement in the divorce,and then marries someone, and
(02:13):
maybe that person has more orless assets. Now you have two
households, they're managingtheir finances separately, they
both want to live the same life,but they're now contributing
different allocations or amountsto percentages to the the
income. They're now saying,well, we'll all take care of
60%, you take care of 40%. Itgets very tricky.
In addition to that, maybe onespouse wants to travel more, and
(02:36):
one spouse doesn't see the valueof travel. Maybe one spouse
wants to buy a Winnebago, andthe other spouse couldn't be
bothered by a Winnebago. Maybeone spouse so you have a lot of
nuance in how you handle thefinances. Okay? Who pays for
what?
And people will say, well, wekind of have their system. And
I'll admit, like, I I don't balkat these things. When they say
(02:59):
they have their system, fine.They're not looking for marriage
counseling, but it's almostalways based on a bully system.
One person has more power thanthe other person.
It's an inequal distribution ofpower, which is bullying. And
it's it can be verydysfunctional and unnecessary
stress for retirement. Butpeople don't look for marriage
(03:22):
counseling necessarily. I do endup doing some in some sense, but
here's really the foundation ofthe question. Here's kind of how
you solve As dysfunctional orfunctional as you might be, and
that's up for you to decide.
I'm not really a judger in thatsense, but I have my opinions,
but I don't I'll work with youregardless. You decide your
(03:44):
system. But the first thingfirst is what's the lifestyle
that you both want to live? Youput together a plan with both of
your assets combined orcontributing to that plan.
That's how I prefer to do it.
And then what you do is you say,Okay, this is your Social
(04:05):
Security, this is your SocialSecurity, here's the different
ways that would be affected.You've got a pension, great, and
you've got the assets that weresaved, okay, here. And you start
to blend it all together, andthen you figure out
survivability. So what wouldhappen is if one spouse were to
pass or the other spouse were topass, and then you take two
portfolios and you figure out,okay, in each portfolio, how
(04:25):
much of a percent willcontribute to the household
income that's needed toaccomplish that goal?
David (04:32):
Okay.
Mike (04:33):
Then you've got to look at who has more in pre tax accounts
like IRAs, and who has moreaccount, more money maybe in a
non qualified like a brokerageaccount or a personal account.
Do they have a lot of money inRoth? So you have to figure out
that distribution. Then you'vegot to tie Do you see how
complicated this is? It getscomplicated.
(04:54):
Then you've got to sort throughthe ages, so who's going to be
subject to RMDs first, andyou've got to then start
considering RMD or IRA to Rothconversions in preparation for
the RMD, so the household is notdisrupted, but not disadvantages
the other spouse in casesomething happens. So it's a
very delicate balancing act. Wedo it all the time, but you've
(05:20):
got these different layers, andthere's a very specific order of
operation. You put the plantogether first, then you figure
out are there any landmarks orissues, RMDs, and so on. How
much do you have in thedifferent taxable accounts?
And then you start to constructthe portfolio based on the
protection needs, based on theincome needs, based on the
(05:40):
growth needs, based on theliquidity needs, and so on, so
that you can then say, alright,here's basically two portfolios,
they both support one plan. Nowthey're unified.
David (05:51):
So is this is this all worth it? Is it I mean, would
you ever try and convince acouple like, no, this is too
hard. Let's maybe you shouldjust combine everything or
share.
Mike (06:07):
It's a great question. When you see a fitness coach or
nutritionist, they're gonna askyou how committed you are and
how technical you wanna get.Uh-huh. Some people are gonna
wanna get so technical thatthey're measuring the macro and
micronutrients of their theirmeals. Other people are gonna
want flexible dieting.
(06:27):
So flexible, you've got, youknow, one quarter of your plate
in this type, one quarter inthis type, then a half your
plate in this type. Some people,it's calorie cal Everyone has a
different system. Mhmm. The jobof the nutritionist isn't to
force everyone into one systemthat some people will adopt and
others won't adopt. The job ofthe nutritionist is to help
people live healthily.
(06:49):
Our job isn't to force someoneto a certain system. Our job is
to work within the system thatthey want to live by and help
elevate their quality of life byallowing them to live. Many
people will let these nuanced,you know, things hold them back
from living their best life.They're like, well, I don't know
(07:09):
about this. They'll certainquestions, they'll avoid certain
conversations, and what ends uphappening is they'll work longer
than they want at a job theydon't care for, or they will
just kind of have this,sometimes a silent divorce.
They're married, but it's justlike they're more roommates than
anything else. Resentment cancome out. Mean, it's just all
(07:30):
these things that kind of holdback from your overall quality
of life. So I believe that thesethings should be addressed, and
because there's so many waysthat you can create a solution,
it's are you willing to have anopen conversation, not be
offended, but just be honestabout it. I mean marriage
counseling, for anyone that'sever done that, that's a very
(07:51):
uncomfortable thing.
But if implemented correctly,you've got a good marriage
counselor, you've got twoparties that are willing to work
things out, you typically end upwith a better marriage. So if
you can end up with a betterfinancial environment, a
healthier relationship with yourmoney, and a healthier
relationship with money and yourspouse, it typically leads to a
better overall quality of life,a better retirement to where you
(08:14):
can spend time, your mostprecious asset, maybe a little
bit more deliberately. I don'tknow. What do you think?
David (08:19):
Yeah. It sounds like I I feel like I say this every week,
but there's so many littlethings to consider. There's so
much more as as you dive intothe details, maybe details you
didn't know. You didn't knowthat that the pool was 10 feet
feet deep. You thought it was a,like, a kiddie pool.
Right? Yeah. And then youdiscover, oh, no. This this goes
deep if we want it to.
Mike (08:39):
Most people's solutions I have found, and this is
anecdotal, they are the kiddiepool. They're the simple
solution because it's all theycould really understand at the
time. They're not financialprofessionals. They don't really
understand what's going on, butthey don't understand. It's
like, you know when people hurtother people unintentionally?
They didn't mean to do it. Itjust kind of happened. So if you
(09:02):
have two spouses, let's say theyare doing things differently.
One spouse has a lot less thanthe other spouse, but they're
filing their their their taxesjointly. Well, one spouse with
the lesser amount with thelesser social security is paying
at a higher tax rate than theother spouse.
That's not fair. No. And so ifyou're gonna do it that way,
(09:22):
you've gotta it's like if if youif you want x, y, and z, you've
gotta be okay with a, b, c.There's there's a almost like a
contract with if you you have towant the consequences of your
actions.
David (09:36):
Mhmm.
Mike (09:37):
And so many times, I've said, alright, she it usually
it's usually she. She's gonnawithhold a lot less from her
social security, but you'regonna withhold a lot more. And
they'll say, well, that'sunfair. Well, you're creating
all these tax issues for her.Oh.
So it is actually fair, and wejust show the numbers and say,
you know, this is what's goingon. Mhmm. Sometimes, we will
(09:57):
actually run two plans, andthey'll have agreed that they're
gonna contribute x dollars permonth to the household, and so
run the plan separately, but thecaveat usually is, but you have
to file married filingseparately. And you're gonna
operate within your own lanes.So there is some marriage
counseling here.
Uh-huh. You can't have your cakeand eat it too, but these are
(10:19):
healthy beneficial conversationsbecause if your finances aren't
in order, what else isn't inorder? When people argue about
money, I have found it's notreally about the money, it's a
symptom of a deeper problem inthe relationship or within the
person. So these are good thingsto talk about. These are good
things to work through.
(10:40):
We don't want to shy away. Wedon't want to actively avoid
uncomfort or pain or I don'tknow, anything that would be
difficult. We want to addressthem, so once we get through it,
then we can enjoy more. Anyother thoughts on that?
David (10:55):
Sounds fair. Yeah. No. Sounds really fair. Everybody
has to be willing to be open andnot get offended, right, and
just
Mike (11:05):
talk. My wife is extremely kind and extremely giving.
Something we've had to work on,I'll admit openly is, I try to
make sure she knows she can askfor anything. And the expression
we have is, everything is anegotiation. So if she needs
help with something, and shemight she'll be maybe shy about
(11:27):
it and say, I don't want toinconvenience him.
It's like, no, I want you totell me. Yes, couples we we
inconvenience people. All peopleinconvenience other people.
That's how relationships work.
David (11:37):
Yeah.
Mike (11:38):
But it's okay to be inconvenienced. It's okay, but I
can't help you if I don't knowyour needs. And so, you know,
she'll say, hey, can you can youcome home and help me with this?
And I'll say, well, I've gotthis and this going on. She
says, I really need it for thesereasons.
I'll say, oh, got it. Thank youfor telling me. And I can I can
hear the hesitation, but it'slike, no, everything's a
(11:59):
negotiation? And she'll go,yeah, that's true. That's true.
Yeah. That's how it needs to bein a relationship. Even if
you're single, you'renegotiating with yourself. With
your friends, you're negotiatingwith your friends. In finance,
you're negotiating the riskversus the protection.
You're negotiating how you wannahandle your taxes. Everything in
life is a negotiation. So let'sget out of the black and white,
(12:21):
and let's really dive into thegray Mhmm. And find the right
shade for you. That's all thetime we've got for today's show.
If you enjoyed the show,consider telling a friend,
leaving a rating, and mostimportantly, that you are
subscribed to it so that youdon't miss a thing. For more
resources, including a copy ofmy book, on demand courses, and
so much more, just go towww.retireontime.com. If you
(12:44):
want help putting yourretirement plan together, go to
retireontime.com and click thebutton that says get started.
But seriously, from all of ushere at Kedrick Wealth, we wanna
thank you for spending yourtime, your most precious asset
with us today. We'll see you inthe next episode.
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Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.