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‘I am trying to feverishly save for retirement’: My fiancé pays $1,700 a month to the IRS and owes student debt. We’re both 57. Should I marry him for his Social Security and pension?

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My fiancé and I met at age 42 after being recently divorced. We have (now-grown) children from our previous marriages, but none together. We keep our finances separate. Neither one of us had any savings when we met. We have been together for 15 years. 

For 14 of these years my fiancé worked many jobs, and always had payroll tax deductions, but chose not to file yearly income taxes. He was always going to take care of it later. He did not realize the costly penalties of his actions. 

Last year, he filed his income taxes, and has recently filed for Chapter 13 bankruptcy. With the bankruptcy, he has now entered a five-year payment plan to pay his state and federal income taxes (mostly penalties), and other debt including student loans. 

‘Last year, he filed his income taxes, and has recently filed for Chapter 13 bankruptcy.’

He must pay $1,700 per month for five years to the IRS. We are now both 57 years old. He is a veteran with a pension. I think he can start drawing his pension at age 62. So at age 62 his money problems should be over! I love this man, and would like to marry him.

He says we can get married anytime I want. If we were to get married now, would I be responsible for paying off his Chapter 13 debt, which mostly includes IRS debt and student loans? I am worried about marrying him and having to pay his debt should he die before it’s paid off. 

I am also worried that we are getting older and we’ve spent all this time together and he could die before we get married, and I will have no claim to his pension. I became a registered nurse five years ago, and hopefully have 10 years left to work. I am trying to feverishly save for retirement. I know it’s late. 

I bought the house we live in two years ago, and I have $100,000 in my retirement account. 

I am trying to figure out the wise money thing for me to do. Thanks for your help.

The Fianceé

Dear Fianceé,

Let’s deal with the loans first, and the marriage second.

Federal student loans taken out before you were married are the sole responsibility of the recipient even when he or she is married; if you married and your husband were to die, that debt dies with him. Whatever you decide, you should keep all loan obligations separate, and do not file joint taxes.

Given that your partner incurred this debt prior to you getting married, this IRS debt belongs to him — and him alone. For married couples, a spouse can file an Injured Spouse Status if their tax refund is intercepted by the IRS due to their spouse’s tax liabilities.  The same is true for credit-card debt.

“In common law states, debt taken on after marriage usually being treated as separate and belonging only to the spouse who incurred them,” says Timothy Speiss, tax partner at EisnerAmper’s Private Client Services Group. “The exception are those debts that are in the spouse’s name only but benefit both partners. For instance, that might include credit-card debt if the card was used to pay for basic needs like food, clothing, and shelter.”

“If your to be spouse is still paying off student loans, for instance, you shouldn’t worry that you’ll become liable for their debt after you get married,” he adds. “Your spouse’s bad debt shouldn’t influence your own credit score unless the debt is in both your names. If you’ve taken out a credit agreement together, for example, on a mortgage or joint credit card, then your partner will be listed on your credit report as a financial associate.”

In order to receive your spouse’s Social Security benefits you would need to be married for at least one year. If you had children together, which I know you do not, that one-year rule would not apply. (A divorced spouse must have been married for 10 years to receive a former spouse’s benefits.)

I urge caution about your belief that all of his money worries will be over when he finishes paying the IRS the monthly penalties. Before marrying, you should sit down with a financial adviser and go through all of your assets and liabilities together, including whether it’s worth marrying for his pension if he should predecease you.

Whatever led him to get into financial straits in the first instance — burying his head in the sand instead of filing his annual taxes and/or not staying on top of his student loans — will not go away just because you both have a ring on your finger. It may be that his pension is not big enough to justify getting married.

A member of the Moneyist Facebook Group put it more bluntly: “I can’t see how his pension would be worth the risk she’d be assuming by marrying him. He’s proven that his financial habits are not good. Why take the risk that he’s going to do something equally stupid once they’re legally bound?”

Focus on making the next 10-plus years count by paying off your mortgage, and building up your savings and Social Security. People born after 1960 are not eligible for full Social Security benefits until 67 years of age, although retirees remain eligible for reduced benefits starting at the age of 62.

In community property states, debts incurred before the marriage remain the sole responsibility of the individual. So, if your to be spouse is still paying off student loans, for instance, you shouldn’t worry that you’ll become liable for their debt after you get married. Your spouse’s bad debt shouldn’t influence your own credit score unless the debt is in both your names. If you’ve taken out a credit agreement together, for example, on a mortgage or joint credit card, then your partner will be listed on your credit report as a financial associate.

How much student debt does he have left? It sounds like your name is the only one on the deed of your home. Will he contribute to your living expenses? If you marry, I advise against commingling your finances and ask that you keep your home in your name only. Preserve your financial independence, and do not rely on him.

Yocan email The Moneyist with any financial and ethical questions related to coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

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