Financial Considerations: Marriage in your 50s/60s

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Colorado13
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Financial Considerations: Marriage in your 50s/60s

Post by Colorado13 »

Hello. SO and I are trying to cover all of our bases before we get married (likely in late 2021 depending on Covid, among other things.)

I am quite a bit more of a saver while SO is more of a spender. SO will earn more pension income than I will. Our incomes are nearly identical. We have considered strategies for the following. What else should we consider?


Wills
Beneficiaries on investment and other accounts
Pension survivor benefits
Social Security
Minimizing capital gains on home sale: we currently own two homes and will sell one
Income taxes and potential impact on our ability to contribute to IRAs
Health insurance: cost of family vs. two single plans
Workforce exit strategy: one of us is in our 50s and the other is in 60s, so we’ll exit the workforce at different times.
Investment withdrawal strategy upon retirement
Spending plans: we need more discussion/planning around this
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KlingKlang
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Re: Financial Considerations: Marriage in your 50s/60s

Post by KlingKlang »

Financial and healthcare POAs, living wills, ect.

If either of you have children you will probably have to investigate trusts.
bayview
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Re: Financial Considerations: Marriage in your 50s/60s

Post by bayview »

Colorado13 wrote: Tue May 19, 2020 9:50 am Hello. SO and I are trying to cover all of our bases before we get married (likely in late 2021 depending on Covid, among other things.)

I am quite a bit more of a saver while SO is more of a spender. SO will earn more pension income than I will. Our incomes are nearly identical. We have considered strategies for the following. What else should we consider?


Wills
Beneficiaries on investment and other accounts
Pension survivor benefits
Social Security
Minimizing capital gains on home sale: we currently own two homes and will sell one
Income taxes and potential impact on our ability to contribute to IRAs
Health insurance: cost of family vs. two single plans
Workforce exit strategy: one of us is in our 50s and the other is in 60s, so we’ll exit the workforce at different times.
Investment withdrawal strategy upon retirement
Spending plans: we need more discussion/planning around this
Do either or both of you have kids from earlier marriages/relationships? (DH and I have a total of five grown kids.)

Do you plan to combine all your finances, or maintain your own banking, or possibly a “yours, mine, and ours” approach? (DH and I started with our own accounts, have moved to “yours/mine/ours” over time, and the “ours” has become the norm.)

If you have kids, how will you handle gifts, financial help, assistance? (This is a reason that DH and I still have the “yours” and “mine” accounts.)

If you have kids, how will you set things up in your Wills or Trusts for when the first spouse dies, to protect both the surviving spouse and (if desired) the kids?

Saver vs spender: this wasn’t really an issue for us, but we did each fund the joint expenses including retirement and other savings proportionate to our incomes, and what was left from each paycheck was for each of us to use, no questions asked.

As a (very) grown woman, the word “allowance” makes me see red. Perhaps sharing expenses with freedom to do what each wants with the remainder will over time move your spender towards a bit of saving.

Congratulations and best wishes!
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
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Sandtrap
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Re: Financial Considerations: Marriage in your 50s/60s

Post by Sandtrap »

Considerations:
1 Children, blended families, relatives. (seek legal counsel for estate planning, trusts, etc).
2. Beneficiary Deeds
3. Financial accounts, blended vs compartmentalized
4. Property ownership, liabilities, insurance
5. Umbrella insurance
6. "Exit plan" for each person. (yes)
7. Money (yours vs mine vs ours)
8. Discretionary spending (yours, mines, ours)
9. Access (yours, mines, ours)
10. Medical directives (different approaches for each)
11. Cats vs Dogs, Birds vs Fish, Camping vs 4 Star Hotel/Resort

Congratulations.
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kabob
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Re: Financial Considerations: Marriage in your 50s/60s

Post by kabob »

Just follow the basic Rule:
Never Deal or Partner up with someone who has Less to loose the You Do!
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Colorado13
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Re: Financial Considerations: Marriage in your 50s/60s

Post by Colorado13 »

Thanks so much for the great feedback so far. The additions to the list will be very useful for our continued discussions.
DVMResident
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Re: Financial Considerations: Marriage in your 50s/60s

Post by DVMResident »

Because you both have extensive assets, a prenup would be wise.
Congrats on the upcoming union.
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CAsage
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Re: Financial Considerations: Marriage in your 50s/60s

Post by CAsage »

I don't see a specific discussion about separate vs community property. A prenup and a clear disclosure of all current assets and debts, with the discussion about which of those items are going to remain separate (in case of divorce, or death and leaving them to prior family members) should be in there somewhere. I've seen too many cases of remarriage where the prior children get stiffed.... You do mention above how to treat money but it seemed to be more income vs assets focused. When you sell one house, do you put the money together into the 2nd? How will you title that now-shared house for the eventual case of death or divorce? The rest of your list is a great one, and very useful for lots of people.
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Gnirk
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Re: Financial Considerations: Marriage in your 50s/60s

Post by Gnirk »

Second marriage, upcoming 25th anniversary. I was 50 and he was 56 when we married.
There was a big difference in incomes and net worth, and we each have two children, so we had a prenuptial agreement.
We kept our finances separate, and still do. HIs portfolio is more than 3 times mine, and he does the heavy lifting with paying the majority of the expenses, while I pay a smaller share.
We have Wills, DPOA, and Healthcare Directives.
The only properties we own in common are two homes, a primary residence and a snowbird residence.
No debt, and other than the jointly held homes, our estates are left to our respective children.

Should he pass before me, the plan is for me to sell both homes and buy or rent a smaller home or condo closer to my children.

Although this may seem like an unusual arrangement to many people, it has worked well for us.
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Re: Financial Considerations: Marriage in your 50s/60s

Post by Broken Man 1999 »

Gnirk wrote: Tue May 19, 2020 1:33 pm Second marriage, upcoming 25th anniversary. I was 50 and he was 56 when we married.
There was a big difference in incomes and net worth, and we each have two children, so we had a prenuptial agreement.
We kept our finances separate, and still do. HIs portfolio is more than 3 times mine, and he does the heavy lifting with paying the majority of the expenses, while I pay a smaller share.
We have Wills, DPOA, and Healthcare Directives.
The only properties we own in common are two homes, a primary residence and a snowbird residence.
No debt, and other than the jointly held homes, our estates are left to our respective children.

Should he pass before me, the plan is for me to sell both homes and buy or rent a smaller home or condo closer to my children.

Although this may seem like an unusual arrangement to many people, it has worked well for us.
OP, will you be able to continue your current standard of living should your spouse pass before you?

OP, the following is not directed at you, just musings I have.

The thing I always wonder about is the financial condition of the remaining spouse that might have had far fewer assets. I think it is fine if the each spouse leaves their estate to their respective children, EXCEPT...

Are there provisions for the remaining spouse? They might have far fewer assets to be able to afford to live in the same lifestyle as before the other (richer) spouse dies.

IOW, does the death of the richer spouse cause their spouse to live in poverty? A remaining spouse might have another 20 years of life.

The other thing I cringe about is reading posts stating the only need for insurance is when their children are at home. Maybe, maybe not. That decision should depend on each family's finances. Should a women or man who interrupted their career to be a stay at home parent be condemned to a lower standard of living just because their sacrifice reduced their ability in having assets?

Having only daughters, I worried a bit about these things as they started their careers and marriages. As it is now, any worrying to be done won't be done by the DDs. :happy

Broken Man 1999
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Re: Financial Considerations: Marriage in your 50s/60s

Post by cheese_breath »

Colorado13 wrote: Tue May 19, 2020 9:50 am ... I am quite a bit more of a saver while SO is more of a spender. SO will earn more pension income than I will...
I hardly ever recommend this, but... keep your finances separate.
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InMyDreams
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Re: Financial Considerations: Marriage in your 50s/60s

Post by InMyDreams »

cheese_breath wrote: Tue May 19, 2020 2:09 pm... keep your finances separate.
+1
I've seen three situations where a couple who had been happily married (second time around) for years. But when the couple were both advanced in years and increasingly in need of assistance for basic activities, the couple has separated and one has gone to live near a child. One couple even had a child somehow take over the trust and accounts and leave the remaining spouse destitute.
Talk to a wise and experienced lawyer.
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BolderBoy
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Re: Financial Considerations: Marriage in your 50s/60s

Post by BolderBoy »

DVMResident wrote: Tue May 19, 2020 1:22 pm Because you both have extensive assets, a prenup would be wise.
+1. This!
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Re: Financial Considerations: Marriage in your 50s/60s

Post by cherijoh »

InMyDreams wrote: Tue May 19, 2020 4:09 pm
cheese_breath wrote: Tue May 19, 2020 2:09 pm... keep your finances separate.
+1
I've seen three situations where a couple who had been happily married (second time around) for years. But when the couple were both advanced in years and increasingly in need of assistance for basic activities, the couple has separated and one has gone to live near a child. One couple even had a child somehow take over the trust and accounts and leave the remaining spouse destitute.
Talk to a wise and experienced lawyer.
I have a number of female friends who became stepmothers when they married guys with kids from previous marriages later in life. (Only one of them had kids of her own). I'm not privy to their finances but of the two that are now widowed, one gets along well with her stepdaughter but the other one isn't on speaking terms with her two stepkids (their choice). So I think it is a mixed bag.
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Re: Financial Considerations: Marriage in your 50s/60s

Post by bayview »

InMyDreams wrote: Tue May 19, 2020 4:09 pm
cheese_breath wrote: Tue May 19, 2020 2:09 pm... keep your finances separate.
+1
I've seen three situations where a couple who had been happily married (second time around) for years. But when the couple were both advanced in years and increasingly in need of assistance for basic activities, the couple has separated and one has gone to live near a child. One couple even had a child somehow take over the trust and accounts and leave the remaining spouse destitute.
Talk to a wise and experienced lawyer.
+2
I kept nudging DH to discuss this, as we both edged around the “But I’m not that kind of person” and “I wouldn’t do that to your kids.” We’ve now both come to agreement, and it’s nice to know that finger-pointing will be minimized.

Estate planning for blended families can be as, if not more, fraught than discussing pre-nups. But after watching both of our moms slide rapidly into dementia, and then recalling some of the truly ding-y things they each did for a decade prior to true incapacity, it’s obvious that we can all start acting very differently and contrary to usual values than we used to, and that we can all be vulnerable to persuasion and manipulation, either from adult children and other relatives, or from a new face wanting to “help” us in our loneliness (not sure which is more disgusting.)

As a comment to Broken Man’s very good point: we are very fortunate in that we are each sole heirs to low 7-figure trusts from our surviving parents, and we each want to manage them separately for the benefit of our own grown children. So we will use our relatively modest retirement accounts for our future income needs beyond our SS and my microscopic pension incomes, draining them down over time, with whatever is there after first dies going to survivor, along with the home to live in or sell as seems fit. This should be plenty, even after the loss of first spouse’s income, and whatever is left after the survivor dies will be divided in half, one half going to his kids and the other to mine. There shouldn’t be much left if we live out our allotted spans. Our separate presumed inheritances will be available for some horrendous individual expense like long term care if needed. Any joint “woo-hoo!” expenses will be paid 50/50 from our separate funds.

I realize that this is anathema to many, especially those who are on their first and presumably last marriages. Good for you, and we each wish that this had happened for us, theoretically anyway. But the reality is that it doesn’t always happen, and it’s important to take care of both the surviving spouse AND kids from earlier relationships, so we all need to put on our big-girl/ big-boy britches and work out these things in a loving, respectful, and sensible way.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
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Re: Financial Considerations: Marriage in your 50s/60s

Post by birnhamwood »

A pre-nup could protect you both.
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celia
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Re: Financial Considerations: Marriage in your 50s/60s

Post by celia »

You may (or may not) want to keep your pre-marriage assets separate, especially if there is at least one child between you. At least this is something to discuss.

If either of you may (or may not) get a future inheritance, that could optionally also be kept separate.

If either of you was previously married to a high-earning spouse, that person may/may not be eligible to collect as a spouse of the high-earner instead of their own work record. A new marriage might disqualify that option, though.

Changing car insurance to be joint should save you money since both of you will likely go places in one car.

If your birth years are more than 10 years apart, your RMD will likely be calculated differently than just based on your own age. (RMD calculations for those who start at 72 are yet to be announced.)
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Re: Financial Considerations: Marriage in your 50s/60s

Post by illumination »

Prenup and separate your finances as much as possible. Make sure there's an acceptable plan for the adult children in terms of inheritance. It's a perfectly reasonable request.

Rather than endless arguments about each other's spending habits, letting the big spender spend "their" money and the saver getting to save "their" money will probably mean everyone is a lot happier. I would just make sure the big spender understands that they can't rely on the big savers retirement and use their own income as "walking around money". I could see that creating a lot of resentment.
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Re: Financial Considerations: Marriage in your 50s/60s

Post by carolinaman »

DVMResident wrote: Tue May 19, 2020 1:22 pm Because you both have extensive assets, a prenup would be wise.
Congrats on the upcoming union.
+1. Especially true for each party's children and heirs.
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Re: Financial Considerations: Marriage in your 50s/60s

Post by flyingaway »

illumination wrote: Tue May 19, 2020 5:29 pm Prenup and separate your finances as much as possible. Make sure there's an acceptable plan for the adult children in terms of inheritance. It's a perfectly reasonable request.

Rather than endless arguments about each other's spending habits, letting the big spender spend "their" money and the saver getting to save "their" money will probably mean everyone is a lot happier. I would just make sure the big spender understands that they can't rely on the big savers retirement and use their own income as "walking around money". I could see that creating a lot of resentment.
If the concerned party (the couple) are so much concerned about the each other's money and inheritance, what is the point to get married? Would it be much easier to just not having that formal marriage? are the marriages in 50s/60s still that romantic like in early 20s?
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Re: Financial Considerations: Marriage in your 50s/60s

Post by ResearchMed »

flyingaway wrote: Wed May 20, 2020 10:37 am
illumination wrote: Tue May 19, 2020 5:29 pm Prenup and separate your finances as much as possible. Make sure there's an acceptable plan for the adult children in terms of inheritance. It's a perfectly reasonable request.

Rather than endless arguments about each other's spending habits, letting the big spender spend "their" money and the saver getting to save "their" money will probably mean everyone is a lot happier. I would just make sure the big spender understands that they can't rely on the big savers retirement and use their own income as "walking around money". I could see that creating a lot of resentment.
If the concerned party (the couple) are so much concerned about the each other's money and inheritance, what is the point to get married? Would it be much easier to just not having that formal marriage? are the marriages in 50s/60s still that romantic like in early 20s?
[emphasis added]

:shock:

The answer to that last question, at least in some cases, is a definite YES.
(That would include "us", lest there be any question here...)

Why should age make one (or two) automatically less romantic, less in love?

:confused

Seriously!?

If this isn't a serious version of "age-ism", I'm not sure what is!

And that doesn't even start to deal with some of the "things" one can do - or do more easily - as a spouse vs. non-spouse.

RM
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Colorado13
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Re: Financial Considerations: Marriage in your 50s/60s

Post by Colorado13 »

Thanks for the replies so far. You've given us some additional things to consider, which is appreciated.

Some clarification:

I didn't intend to imply that one of us is a wild and irresponsible spender while the other is a miser. We currently review purchases together, prior to the purchase. So this isn't a pain point, but is something that we both discuss regularly. Having nearly identical incomes does simplify things that could be issues for other couples.

Flyingaway: in addition to love and romance as the primary motivators, there are financial benefits to marriage. For us, the ability to have spousal benefits for our pensions is of great importance. The pension income can't be passed to other heirs upon our passing, but can be passed to a surviving spouse. Thanks to ResearchMed for his/her reply regarding this. I agree that the reference to love only as an incentive to marriage in your 20s is a "unique" perspective.

Does anyone have advice regarding selling one home before vs after marriage? We believe we understand the need to update the title on the remaining home and understand the capital gains tax implications. Is there anything else we should consider? Thanks!
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CAsage
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Re: Financial Considerations: Marriage in your 50s/60s

Post by CAsage »

Colorado13 wrote: Wed May 20, 2020 12:07 pm Does anyone have advice regarding selling one home before vs after marriage? We believe we understand the need to update the title on the remaining home and understand the capital gains tax implications. Is there anything else we should consider? Thanks!
How much capital gains are you looking at for the sale of that home? If under $250k, you can sell anytime. If more, then you should wait until you are married because the capital gains deduction is $500k for married couples. I'm not sure exactly what the IRS says about whether both of you have to live there before you sell, but at least one of you already has! Look carefully at the IRS rules.... I'm just broadly saying.
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Re: Financial Considerations: Marriage in your 50s/60s

Post by TomatoTomahto »

ResearchMed wrote: Wed May 20, 2020 11:13 am
flyingaway wrote: Wed May 20, 2020 10:37 am If the concerned party (the couple) are so much concerned about the each other's money and inheritance, what is the point to get married? Would it be much easier to just not having that formal marriage? are the marriages in 50s/60s still that romantic like in early 20s?
[emphasis added] :shock:
The answer to that last question, at least in some cases, is a definite YES.
(That would include "us", lest there be any question here...)
Why should age make one (or two) automatically less romantic, less in love?
:confused Seriously!?
If this isn't a serious version of "age-ism", I'm not sure what is!And that doesn't even start to deal with some of the "things" one can do - or do more easily - as a spouse vs. non-spouse.RM
Frankly, I think some marriages later in life might be more romantic than the 20s marriages; the two participants have more to distinguish themselves from the rabble. 😁 only half kidding.

As regards what you can do married as opposed to unmarried, look up any of the essays pre marriage equality that discussed how disempowered gay couples were and the obstacles they faced, especially at end of life time. POA sounds like a fix, but it wasn’t for countless partners locked out by ignorant doctors, families, and courts.

ETA: when I married my wife, she was a fully formed human, with considerable accomplishments and great resolve in the face of adversity. I find that hot.
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