Merging Investment Accounts As A Newly Married Couple
When it comes to merging investment accounts, it is similar to merging bank accounts, however some accounts are individually owned and cannot be merged. For example, retirement accounts (think a 401(k)) cannot be jointly owned, therefore this is no way to “merge” them. At a minimum, it is good to get organized to know what investment accounts you have & where they all are & how you can “merge” them without actually merging them.
Retirement accounts
Like I stated above, your 401(k)/403(b) is tied to you as an individual. Therefore this is no way to add your spouse as a joint owner. This is the same for an IRA/Roth IRA. Retirement accounts include:
401(k)
403(b)
401(a)
IRA
Roth IRA
Solo 401(k)
SEP IRA
457 Plans
There are a few others that are less common so not going to list all of them. You can find a full list of retirement plans here: https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans
The only way to “merge” these accounts (for a lack of a better word) is to add your spouse as a beneficiary. If you were to die, your retirement account flows directly to your spouse as if it is their own retirement account.
Taxable Brokerage Accounts
This account type is where you can have some flexibility in how you title them. The titling option for taxable brokerage accounts are:
Individual
This means the account is in one persons name & no “joint” aspect.
Joint with Rights of Survivorship
This is the most common joint account type & most recommended. If one of the joint owners should die, full ownership will transfer to the surviving account owner. This account type is not valid in Louisiana.
Joint Tenants in Common
This account presumes that each owner has an equal share of the account. However, account owners can determine their own percentage of ownership. If one of the owners should die, their share of the account goes to their estate.
Community Property
This account is owned only by a married couple. If one of the spouses should die, their 50% share will be left to their estate. This account type is only valid in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington.
Let’s say you both have individual brokerage accounts & you want to combine to have a joint account, it is usually a pretty easy process to call your broker (Fidelity, Vanguard, Schwab, etc.) & ask them the best way to do this. They may require you to open a new joint brokerage account & transfer both individual accounts to it. They may just re-register one of your individual accounts to a joint account then you would transfer over one of the individual accounts to the new joint account.
Similar to bank accounts, something to keep in mind if you go from an individual account to a joint brokerage account is both owners have the power to make withdrawals from the account without the others consent.
HSA Accounts
Similar to retirement accounts, HSA accounts cannot be joint. If you both want to open an HSA, you would each individually need one in your own names. Just make sure to have your beneficiaries updated.
“Merging” Accounts That Are Not Joint Accounts
While you cannot merge retirement accounts or HSAs, what you can do is simplify where all of your accounts are & “merge” them to the same custodian. Let’s say you use Fidelity and your spouse uses Vanguard, one way to see all of your assets in one place would be to transfer all your assets to one custodian. This makes tracking your finances easier too.
Note: A 401(k) or 403(b) custodian is decided by your employer, therefore you cannot change it. Other accounts (like IRAs or taxable accounts) can be transferred to different custodians.
Transferring of Assets
The actual transfer of assets is really easy (thanks technology!). Every custodian/broker is slightly different in the process, but the overall route is pretty similar. Let’s say you hold your Roth IRA and taxable account at Vanguard but want to merge with your spouse at Fidelity. Below is the process:
To transfer assets you would go to Fidelity & set up the account you are transferring to. In this case, you would open a Roth IRA at Fidelity & then depending on your goals, either an individual brokerage account OR a joint brokerage account at Fidelity.
From there, you would start a transfer at Fidelity. You can transfer assets a few ways, but the easiest & most efficient is a transfer “in kind”. This means no shares will be sold (unless you have fractional shares (example: 50.45 shares = 50 full shares + .45 fractional shares), which those .45 shares will be sold, then transferred over as cash) & according to Fidelity & my personal experience, the shares will arrive around 5-7 business days.
If You Decide To Not Merge Custodians
This is okay too! Like I always say, personal finance is personal, so it is all up to you! I would recommend keeping a spreadsheet or using a software like Monarch Money to track all your investment accounts at different places! Even if you do merge your investment accounts to one custodian, a software like Monarch Money is great to track your financial progress!
This process of merging investment accounts can take a few weeks (the actual work may take a few hours, but waiting on transfers to go through is the reason it takes so long). Just like with merging bank accounts, once you get everything merged/set up how you want it, it will all be worth it.
Thanks for reading & I hope you found value in this post.
-Kolin
If you are not sure how to set up your bank accounts, read this blog here:
Disclaimer: The content provided in this blog post is for educational purposes only and should not be considered as financial advice. While every effort has been made to provide accurate and up-to-date information, the content on Money Matters For Two is based on personal research, opinions, and experiences. The financial landscape can change rapidly, and what may be applicable at the time of writing may not necessarily be applicable in the future.
Any financial decisions you make based on the information provided here are entirely at your own risk. Money Matters For Two encourages readers to do their own research and, when necessary, seek the advice of a qualified financial advisor or professional to ensure that any financial choices are appropriate for their individual circumstances.