Couple’s big age difference affects retirement planning
Dear Liz: My husband is quite a bit older than I (about 18 years). When we married, we agreed that we should put all our savings into joint funds and into his retirement accounts. Our thought was that since I’m younger, we’d have much earlier access to retirement money by funneling it into his retirement accounts (as opposed to mine), and that it was unfair for me to sock away money that he may never have access to.
Intellectually it feels like the fair way to go, since we both work and are equally responsible for our family’s finances. The money we’ve been putting in his retirement accounts will ultimately belong to both of us. But emotionally, I feel anxious about not having my own accounts. Should I just work this out in therapy (joking) or am I right to be concerned? What would you advise for a couple like us with an age difference?
Answer: You are likely to outlive your husband by at least two decades. Rather than focusing on early access to retirement funds, you should be making sure that money lasts for a lifetime: your lifetime, not just his. By the way, considering your own needs is not unfair -- it’s sensible. A loving husband wouldn’t want to leave you old, alone and impoverished.
You may not need a session with a therapist, but you should definitely have a meeting with a fee-only financial planner who can review your situation and make sure the needs of both of you are considered.
Wife needs to build own credit
Dear Liz: I applied for a 10-month, interest-free loan at an appliance store to purchase a washing machine and was refused. We own our house, have no outstanding debt and pay our credit cards in full each month. I’m worried that if something happens to my husband and I want to buy a car or whatever I need, I won’t be able to get credit.
Answer: If you were turned down for credit, you should have been given free access to the credit report the lender used to make its decision. In any case, everyone in the United States can get a free look at their credit reports from the three bureaus once a year at www.annualcreditreport.com. You should peruse the reports to see whether there are any obvious errors, such as accounts that aren’t yours or late payments when you paid on time.
The problem could be that all the credit you have is in your husband’s name. If that’s the case, you should begin building your own credit. If you’re already an authorized user on his cards, see if the credit card issuers will report the accounts to your credit reports as well as his. Opening a credit card account in both your names, as joint account holders, also can help build your history.
Credit card users must know rules
Dear Liz: As a customer service representative for a credit card company, I enjoy your articles on the credit card industry. But I wish you would do an article from the credit card companies’ point of view. While I agree that many credit card practices are unfair, a lot of the customers I speak to are oblivious to basic credit card rules. Many people do not understand why they cannot charge on an account that has not been paid in three months, or why they get a late fee when they fail to pay on time. Just like a store raising prices to cover the cost of shoplifting, credit card companies make their policies based on their worst customers, not their best ones. If you are a great customer and usually pay on time, just call and the fee may be waived. Credit cards are a confusing business. You are good at helping consumers know their rights, but I think they need to know their responsibilities.
Answer: Your point is well taken. Paying on time is an important responsibility, and one that became easier with the Credit Card Accountability Responsibility and Disclosure Act of 2009, which banned arbitrary deadlines, such as considering late a payment that arrives after 1 p.m. on the due date. (Any payment received by 5 p.m. on the due date is now considered to be on time.)
Card issuers also are now required to mail statements at least 21 days before the due date (up from 14) and to make the due date the same day each month, rather than moving it from month to month. If the date falls on a Saturday, Sunday or banking holiday, the due date is moved to the next business day. These rules should make it easier for responsible users to avoid late fees.
Liz Pulliam Weston is the author of the book “Your Credit Score: Your Money and What’s at Stake.” Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604, or via the “Contact Liz” form at www.asklizweston.com. Distributed by No More Red Inc.