I\u2019m 56 and a DIY investor considering retiring at the end of the year. My wife is 10 years younger and plans to work for another four years. Should I treat our investment portfolios separately based on our respective ages, or holistically as one? <\/p>\n
We asked Jillian Bryan, senior portfolio manager and senior investment adviser at TD Wealth Private Investment Advice, to answer this one.<\/b><\/p>\n
You might not be retiring at the same time but it\u2019s still best to treat yourself and your partner as one unit.<\/p>\n
Ms. Bryan advised that you view the portfolio as one integrated household plan, not two separate accounts. \u201cFrom a financial planning standpoint, your family\u2019s resources, expenses and goals are shared, so the investment strategy should reflect your combined needs and risk capacity.\u201d <\/p>\n
Ms. Bryan also noted that even though your wife is younger and still earning money, the total portfolio should be optimized around your joint objectives, such as funding your retirement spending, maintaining your lifestyle and preserving capital for both your retirements.<\/p>\n
\u201cThat said, your respective accounts can be structured differently for tax efficiency and flexibility,\u201d Ms. Bryan said, <\/b>adding this is where professional advice adds value. <\/p>\n
That advice might include holding \u201cmore income-generating or lower-volatility investments in your registered or non-registered accounts that will support near-term withdrawals\u201d while your wife\u2019s accounts could remain focused on growth because she\u2019s still earning, Ms. Bryan said.<\/p>\n
Part of the role of an adviser, she said, is to help make joint life expectancy, tax brackets and income streams work together, in one cohesive structure.<\/p>\n
\u201cWe consistently see new clients transferring in their portfolio, which works well when the market is up but there is no plan should the market decline to protect the portfolio,\u201d said Ms. Bryan. \u201cTherefore, a majority of our investors find that a balanced approach leads to a greater sense of comfort.\u201d <\/p>\n
It\u2019s also important to define what \u201cenough\u201d looks like for retirement and your legacy plan, whether that\u2019s creating a financial safety net for your grandchildren, helping a friend or leaving a meaningful gift to a charity. <\/p>\n
\u201cA portfolio without a purpose is pure volatility \u2013 it should be a plan that reflects your values and story,\u201d Ms. Bryan said.<\/p>\n