Dear Liz: My fiancee has incurred a lot of medical debt during the course of our relationship. She works 13- to 14-hour days at two jobs so she can start saving for the wedding and our shared goals, which include buying her a car, sending me to grad school without incurring more student debt, creating a real emergency fund for us, and moving out of my apartment into a new one.
She thinks her credit is horrible (though she has never checked it) and she knows with the medical bills, it is getting worse. She doesn’t think she can move in because she can’t buy a car.
What should I do? Should I help her with her debt so we can actually plan for the wedding scheduled next July? Or should I let her deal with it herself?
My biggest concern in all of this is that I have significantly better finances. I worked hard in college and have a full-time job that pays a living wage. I’ve been in my own apartment for two years.
Sometimes I feel resentful of the fact that she cannot contribute to our household like I can, and I worry that I will have to shoulder our shared goals. I am particularly worried I will have to pay for the wedding, which I am finding more and more ridiculously expensive every day (we’re only spending $5,600), while not being able to save for grad school.
I really am not sure how to give up my frustration and face reality, and our reality is that medical debt is holding up our plans.
Answer: It’s understandable that you’re frustrated. But please don’t take it out on your fiancee, who sounds like a hard-working person who had the bad luck of getting sick.
Working 13-hour days isn’t sustainable, particularly for someone with health issues. She may already have more medical debt than she can reasonably repay, and continuing to struggle with these bills may make achieving other goals impossible.
Encourage her to make an appointment with an experienced bankruptcy attorney. Bankruptcy may not be the right choice for her, but the attorney should be able to assess her situation and discuss her options.
Her debt may be manageable with some help from you. In that case, you two need to discuss how to handle this and your finances in general.
Don’t listen to people — or your own preconceptions — telling you there’s only one way couples should handle money. Some married couples keep their finances entirely separate. Some combine everything — all assets and income are joint, and so are all debts. Most take a middle path, combining some accounts and obligations while keeping others separate.
Finances can also evolve. You may be able to contribute more now, but your fiancee may become the primary breadwinner when you start graduate school. When that happens, would you expect her to help you pay the student loan debt you acquired before marriage, or will that be your obligation?
What’s most important is that you figure out how to work as a team, without resentment and unspoken expectations. It may help to schedule a visit with a fee-only financial planner to discuss your shared goals and how you’ll fund them. You can get referrals to fee-only advisors who charge by the hour at the Garrett Planning Network, www.garrettplanningnetwork.com, and to those who charge monthly fees at the XY Planning Network, www.xyplanningnetwork.com.
Waiting for Social Security pays off
Dear Liz: My husband (who will retire in January) just turned 67, but still wants to wait to collect Social Security until he turns 70 to maximize his benefit.
Should he apply for Social Security now, and immediately suspend benefits? Or, should he simply wait until he turns 70 years old to apply? Is there a difference?
Answer: There’s no need for your husband to file for benefits now. He will accrue delayed retirement credits for each month he delays filing, and those credits will add 8% a year to his benefit. Not only will that result in a larger check for him, but that could mean a larger survivor’s check for you should you outlive him.