Business The couple must decide how to handle the merger...

The couple must decide how to handle the merger of money after marriage


Dear Liz: My son just got married. He and his wife keep finances totally separate, although he earns much more than she does. You are spending much more than you should on household items and services. Is this the new norm for relationships? What kind of professional do we contact that could help them merge their finances?

Reply: Do not contact any professional. Your son and his wife can find help on their own. If your child starts complaining about his wife’s expenses again, you can gently suggest it before changing the subject.

However, in response to your first question, separate accounts are not the norm, but they are quite common. A 2018 Bank of America study found that 28% of millennial couples kept their finances separate. Many prefer the sense of control and privacy that separate accounts offer.

But, of course, it is still important for couples to develop joint budgets and goals together. That can take time, a lot of discussion and a willingness to compromise. It would not be fair for his son to dictate what he spent just because he earns more, just as it would not be fair for his daughter-in-law to buy what he wants and assume that he will contribute.

However, once again: it is not your business, it is yours, and it will be better for all concerned if you stay out of it.

IRMAA is not your friend

Dear Liz: My wife and I retired in 2019 and met IRMAA, the monthly adjustment amount related to Medicare income, which increased our monthly premiums. I thought I had done a good job budgeting for retirement, but I missed it. Many couples have their best years of income at the end of their career and then are surprised by the cost of Medicare and the adjustment based on their previous income. I will say that the people from the local Social Security office were very helpful and provided us with forms for an exception based on our new income.

Reply: IRMAA can substantially increase premiums for singles with annual incomes greater than $ 87,000 and married couples with incomes greater than $ 174,000. The increases for Medicare Part B, which covers doctor visits, range from $ 57.80 to $ 347 per person per month. Surcharges for Part D, which pays for prescription drugs, start at $ 12.20 and reach $ 76.40 per person per month.

The adjustments are based on your income two years before (so the 2018 income determines the 2020 premiums). You can appeal the increase if you have experienced a life-changing event. Retirement with a subsequent drop in income may be one of those events. There may also be other work stoppages or reductions, marriage or divorce, the death of a spouse, the loss of income-generating assets or the loss of pension income.

Even without IRMAA, the costs of medical care can surprise many newly retired people, especially if they previously had generous employer-subsidized coverage. Medicare does not cover everything; It has deductibles and copays in addition to premiums, and excludes most vision, hearing and dental expenses.

The amount you pay out of pocket depends on your health, where you live and what additional coverage you buy. A Vanguard and Mercer Health and Benefits study estimated that a typical 65-year-old woman in 2018 could expect to pay $ 5,200, but her costs could vary from $ 3,000 to $ 26,200. (The researchers say that the costs of a 65-year-old man are usually about 3% lower.)

Tax tips for hybrid owners

Dear Liz: It is not a question, but a tip for your readers. I bought a plug-in hybrid in 2018. I couldn’t take advantage of the $ 7,500 federal tax credit because my income was too low to pay too much in federal taxes. So I converted $ 30,000 of my IRA into a Roth IRA, which added that money to my income for 2018, which allowed me to take full advantage of the credit. Hey, they even gave me some money back. I cannot touch that Roth account for five years, or else the income it generates will not be tax free, but when the time comes for my mandatory withdrawals, I will take advantage of the rest of my regular IRA. This could be helpful for some of your readers.

Reply: Normally, conversions from a regular IRA to a Roth trigger a considerable tax bill, but your credit allowed you to perform a tax-free conversion. Leasing is another option to consider with hybrids and other cars that offer a federal tax credit. The value of the credit is generally integrated into the agreement, so you benefit even if you do not have a federal tax bill to compensate.

Liz Weston, a certified financial planner, is a personal finance columnist for NerdWallet. Questions can be sent to 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or through the “Contact” form at


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