Two 401ks career woman turned housewife — what to do?

Hi Terry, I am a 35 year old woman mother of two boys. I had a 401k with my first employer than another one with my most recent. I left the work force to stay at home and take care of my 6 year old kindergartener and rambunctious 2 year old. I have these two separate accounts with two different banks. What is the best thing to do with the money in these accounts.. Do I merge them, transfer them into my husbands 401? I don’t know what the best financial decision is…..Please help!

Terry Says:   These are YOUR retirement accounts — and you can’t transfer them into your husband’s name, and shouldn’t!  What you should do is contact Vanguard (800-VANGUARD) and have them help you ROLL them directly into an IRA rollover.  They will advise which funds would be appropriate.  Then, while you might want to change the funds inside the rollover account, after checking yearly with Vanguard, just let them grow for the next 35 years!  You’ll be glad you did.

Also, even if you are not working, you can open a new spousal IRA for this year (if you were not covered by a company plan in the same year) and you can contribute for your own retirement.  (Staying at home and taking care3 of two young children is hard work!)   Here’s a link to the Vanguard explanation of a “spousal IRA“.  It is the only type of IRA to which you can contribute even if you do not have earned income.  And it can be a Roth (after-tax) IRA, which I would suggest — because it will grow over the years tax-free!  Note: This would be a SEPARATE IRA from your Rollover IRA!

A woman can never have too much money of her own in retirement!