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

Dear Quentin,

My fiancé and I met at age 42 after being not too long ago divorced. We have (now-grown) youngsters from our earlier marriages, however none collectively. We preserve our funds separate. Neither one among us had any financial savings once we met. We have been collectively for 15 years. 

For 14 of those years my fiancé labored many roles, and at all times had payroll tax deductions, however selected to not file yearly revenue taxes. He was at all times going to handle it later. He didn’t understand the expensive penalties of his actions. 

Last 12 months, he filed his revenue taxes, and has not too long ago filed for Chapter 13 bankruptcy. With the chapter, he has now entered a five-year fee plan to pay his state and federal revenue taxes (largely penalties), and different debt together with pupil loans. 

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

He should pay $1,700 monthly for 5 years to the IRS. We are actually each 57 years outdated. He is a veteran with a pension. I feel he can begin drawing his pension at age 62. So at age 62 his cash issues ought to be over! I like this man, and wish to marry him.

He says we are able to get married anytime I would like. If we have been to get married now, would I be chargeable for paying off his Chapter 13 debt, which largely consists of IRS debt and pupil loans? I’m fearful about marrying him and having to pay his debt ought to he die earlier than it’s paid off. 

I’m additionally fearful that we’re getting older and we’ve spent all this time collectively and he may die earlier than we get married, and I’ll don’t have any declare to his pension. I turned a registered nurse 5 years in the past, and hopefully have 10 years left to work. I’m making an attempt to feverishly save for retirement. I do know it’s late. 

I purchased the home we reside in two years in the past, and I’ve $100,000 in my retirement account. 

I’m making an attempt to determine the sensible cash factor for me to do. Thanks on your assist.

The Fianceé

Dear Fianceé,

Let’s take care of the loans first, and the wedding second.

Federal pupil loans taken out earlier than you have been married are the only real duty of the recipient even when she or he is married; when you married and your husband have been to die, that debt dies with him. Whatever you resolve, it is best to preserve all mortgage obligations separate, and don’t file joint taxes.

Given that your associate incurred this debt previous to you getting married, this IRS debt belongs to him — and him alone. For married {couples}, a partner can file an Injured Spouse Status if their tax refund is intercepted by the IRS on account of their partner’s tax liabilities. 

In order to obtain your partner’s Social Security advantages you’d have to be married for at the least one 12 months. If you had youngsters collectively, which I do know you don’t, that one-year rule wouldn’t apply. (A divorced partner will need to have been married for 10 years to obtain a former partner’s advantages.)

I urge warning about your perception that each one of his cash worries can be over when he finishes paying the IRS the month-to-month penalties. Before marrying, it is best to sit down with a monetary adviser and undergo all your belongings and liabilities collectively, together with whether or not it’s price marrying for his pension if he ought to predecease you.

Whatever led him to get into monetary straits within the first occasion — burying his head within the sand as an alternative of submitting his annual taxes and/or not staying on prime of his pupil loans — won’t go away simply since you each have a hoop in your finger. It could also be that his pension will not be sufficiently big to justify getting married.

A member of the Moneyist Facebook Group put it extra 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 subsequent 10-plus years rely by paying off your mortgage, and increase your financial savings and Social Security. People born after 1960 should not eligible for full Social Security advantages till 67 years of age, though retirees stay eligible for diminished advantages beginning on the age of 62.

How a lot pupil debt does he have left? It appears like your title is the one one on the deed of your private home. Will he contribute to your residing bills? If you marry, I counsel towards commingling your funds and ask that you just preserve your private home in your title solely. Preserve your monetary independence, and don’t depend on him.

Yocan electronic mail The Moneyist with any monetary and moral questions associated to coronavirus at qfottrell@marketwatch.com, and observe Quentin Fottrell on Twitter.

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The Moneyist regrets he can’t reply to questions individually.

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Source web site: www.marketwatch.com

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