I had an interesting conversation with a friend a few days ago, and got her permission to discuss it here. She is engaged and I was very pleased to hear that she and her future husband have been discussing how they plan to deal with their finances after they wed. I am not sure of all of the details, just that they seem to have agreed on all but one minor thing - their retirement accounts.
Right now, my friend has her retirement accounts (401k and Roth IRA) set up so that if she dies, the money in the account is distributed equally among her three siblings. As a single woman with no children, I have done the exact same thing with my accounts. While discussing these accounts with her betrothed, she commented that until they have children, or at least until the situations change, she would like to keep it that way.
Clearly, since I'm writing about this, you already know that he did not agree. In his opinion, they should each make the other the beneficiary of these accounts. He did make some good points, one being that changing things now would prevent forgetting to change them later after a child is born.
In her opinion, for the next few years at least, her siblings would benefit the most from the money. Her siblings are in college and high school, while her to-be husband has a good job and a retirement account of his own. Additionally, as they agreed, everything else she owns would go to him in her will (aside from some family heirlooms he has no desire to keep).
I am not sure how they resolved the matter. It wasn't a huge sticking point between them, she was just surprised that he reacted so strongly to the matter. Additionally, at this point, they're not talking a huge amount of money. She's only been in the workforce a few years, and over the past year, her retirement accounts have taken a hit thanks to market fluctuations.
I did think it was an interesting debate. Were I getting married and having this discussion, I don't know what I would do. As I said, I also have my retirement accounts set up so that my siblings are the beneficiaries, and I know that one of my siblings has done the same (the other is still a college student who I cannot convince to start a Roth IRA).
Anyone want to weigh in?