Author Topic: Second Marriage Finances  (Read 4167 times)

Lorna2287

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Second Marriage Finances
« on: August 21, 2015, 08:27:06 AM »
I remarried two years ago (second marriage for both) and we are both in our 50s with college-age kids. I have two masters degrees but earn considerably less than my husband due to my chosen field. He makes upwards of $150,000 and has a hefty pension upon retirement plus a 401(k). Despite my paltry income, I have a considerable inheritance that is invested in a diversified portfolio. I also own a home with no mortgage...when we married, he sold his house and moved into mine. At my insistence and despite the income disparity, we split household expenses (which are minimal) down the middle. We are both frugal and share the goal of downsizing and simplifying our lives.

He is fixated on a particular retirement date which is two years away, and is adamant that he won't retire before that date. We could both retire now and live very comfortably but he is paranoid about finances and thinks two years is the magic date. At that point, he wants me to retire and has indicated that he wants to move to another state. I would be fine staying where we are, but, whatever. I agree with his plan up to a point. I have a great deal of money tied up in my house; if I could sell the house, liquidate the assets, and invest, I could afford to quit now! But he objects to that idea since, in his view, in two years we'll be moving anyway, and he always has a rationale for why it's a bad idea to sell. The issue is, I feel quite resentful and held hostage by his personal financial goals. It feels like I'm structuring my whole life around his "magic date" at the expense of my own financial well-being, and that he is dictating the rules. Not to mention, our combined incomes place us in an outrageously high tax bracket, which of course penalizes me as the lower wage earner. It actually makes more financial sense to quit my job and live off investments. Am I being unreasonable? Should I just sell the house and force him to deal with it?

MissStache

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Re: Second Marriage Finances
« Reply #1 on: August 21, 2015, 08:40:35 AM »
Glad to hear you guys are in a strong financial position, but I'm sorry that you are feeling trapped in your situation.  Have you talked to him about how you feel?  Does he realize how strongly you feel about that, and that it is making you resentful? 

Lorna2287

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Re: Second Marriage Finances
« Reply #2 on: August 21, 2015, 08:48:21 AM »
Thanks for the reply. Yes, I realize we are quite fortunate to be in this situation and it helps that we are frugal (we both bike to work, have one car, etc.). I guess I'm surprised at how hard it is to merge our lives this late in life when you both have kids and separate assets. When you've both spent years planning for your future as a single person it makes it harder to consider the other person's perspective. I have expressed my frustration to him, but his solution is to "help" me out financially in some way, which comes across as pretty sexist because because, if I could sell the house, I wouldn't need his "help." I'm in a position to live quite comfortably on my own finances but his situation is preventing me from doing that.

Kaikou

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Re: Second Marriage Finances
« Reply #3 on: August 21, 2015, 09:12:49 AM »
I have no firsthand experience whatsoever. But I hear that a lot of other couples in your situation (older, 2nd marriage, step children etc.) Hash this out before the marriage. What did the financial talks before the marriage dictate?

I'll be honest, your post screams resentful. I'm sure that's not where you want to be. Is counseling an option? Financial or couples? Is the financial situation surrounding the extended family taken care of?

slowplod

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Re: Second Marriage Finances
« Reply #4 on: August 21, 2015, 09:36:23 AM »
It sounds like you're in good financial shape regardless of the path you take.  Honestly, this seems to be way more of a relationship issue than anything else.

I think you really need to put egos aside and try to come up with a compromise that works for both of you.  You don't need to retire at exactly the same time.  You never really stated what you wanted.  Do you want to retire right now?  It seems like he is OK with this per your comment of his offer to "help" financially.  You don't need to view his financial help as "sexist".  It seems like this rigid rule of keeping your finances separate is causing more problems than anything else.  You two are married: is it really a big deal if he lives in the house you own and covers the expenses for 2 years while you enjoy your retirement?  He still makes out because he doesn't need to pay a rent/mortgage, and you don't have to wait for him to retire. 


Rezdent

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Re: Second Marriage Finances
« Reply #5 on: August 21, 2015, 09:38:41 AM »
From what you've  written:
     1.  you appear to believe that marriage involves a high degree of individuality, with some shared functions and some shared assets.
     1. he appears to believe most functions and assets are shared, with less individuality.
Any large difference in philosophy about this will make it hard to merge lives.  It may be difficult for one to even understand the other.

For example, I believe it's all in, DH believes in maintaining separation.   I have a larger retirement fund than he does.  If you asked me how much I have in retirement, my answer would add up both our assets.  His answer would include only his assets.
This has lead to a lot of discussion on where to push funding.  "My" account is tax-advantaged, and it makes sense to max it first.  But he felt like he is funding "my" retirement at the expense of his.

If this sounds true to you, I'd suggest exploring these concepts first.  Get clarity and agreement on what's "mine, yours, and ours".

It took a while for us to reach a comfortable merge, but we did and it's wonderful.

Lorna2287

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Re: Second Marriage Finances
« Reply #6 on: August 21, 2015, 09:52:42 AM »
Regarding the previous response about sounding resentful...yep, I pretty much owned up to that in my post, and it's definitely something I need to address. Not feeling good about that myself.

We have definitely maintained a certain amount of separation of finances. I came into the marriage with a revocable trust and a pour-over will. Our financial situations are very, very different, which is part of the problem. I have less earned income but considerable assets in taxable accounts, so I get dinged by the combined income...frustrating! He has significant salary and the pension and 401(K). Strangely enough, when we discuss how much we'll have in retirement, he always counts just his assets (like the previous poster's husband) and views mine as just supplemental, which I find irritating. It feels like he's dismissive of my financial contribution simply because his salary is larger than mine. THAT seems like ego to me. Of course, he could pay more in expenses for a couple of years, but that wouldn't make up for the benefit of investing the ~$380,000 from the sale of the house.

 

hdatontodo

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Re: Second Marriage Finances
« Reply #7 on: August 21, 2015, 09:55:24 AM »
>> It actually makes more financial sense to quit my job and live off investments

If he wants to keep working, I guess that's ok.

If you want to stop working, I guess that's ok.

If you don't have the cash to do that could you take a 2 year HELOC for living expenses?

What I'm trying to get at is what a counselor I knew would refer to as "the issue".

Lorna2287

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Re: Second Marriage Finances
« Reply #8 on: August 21, 2015, 10:06:10 AM »
The "issue" is that he seems to prioritize his financial well-being over mine, which is what creates the resentment. Unless I can sell the house, I can't retire, and his reason's for not selling the house seem self-serving to me ("because our circumstances will change in two years...HIS goal, not mine). I'm also not the one who's so anxious to pick up and move in two years. If it were up to me, we'd just sell my house and either rent or buy a smaller house together. I don't feel it's ok for me to make a unilateral decision about selling the house (which will impact both of us) but I'd appreciate more support and awareness about my financial situation. It probably is a relationship/communication problem.

little_brown_dog

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Re: Second Marriage Finances
« Reply #9 on: August 21, 2015, 10:17:55 AM »
He is fixated on a particular retirement date which is two years away, and is adamant that he won't retire before that date. We could both retire now and live very comfortably but he is paranoid about finances and thinks two years is the magic date.

Perhaps he won't quit, but is he willing to compromise and let you partially retire aka: switch to part time? Or what about seeing if you can compromise on the date - say set it a year from now instead of 2 years. It sounds like you two are too far off in terms of goals - he demands 2 years, you demand now. Look for the moderate middle.

slowplod

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Re: Second Marriage Finances
« Reply #10 on: August 21, 2015, 10:34:18 AM »
We have definitely maintained a certain amount of separation of finances. I came into the marriage with a revocable trust and a pour-over will. Our financial situations are very, very different, which is part of the problem. I have less earned income but considerable assets in taxable accounts, so I get dinged by the combined income...frustrating!

What type of investment accounts do you have that are being taxed as income?  That doesn't make sense to me... Long term gains are at 15%.  If you have sizable bond holdings where the interest is taxed as income, you should look into managing your positions to mitigate this.  My bond holdings are completely in my tax sheltered accounts.

He has significant salary and the pension and 401(K). Strangely enough, when we discuss how much we'll have in retirement, he always counts just his assets (like the previous poster's husband) and views mine as just supplemental, which I find irritating. It feels like he's dismissive of my financial contribution simply because his salary is larger than mine. THAT seems like ego to me. Of course, he could pay more in expenses for a couple of years, but that wouldn't make up for the benefit of investing the ~$380,000 from the sale of the house.

Seems like you are BOTH thinking of "mine" vs. "yours" (e.g. your income potential for selling your house).

Your last statement seems petty, and I honestly don't think you'll be missing out on as much as you do.  Your house is likely appreciating in value.  Most projections for the market expect substandard real returns over the next 5-10 years (see below for one example). What would it cost to rent? 


http://www.cnbc.com/2015/02/13/robert-shillers-depressing-advice-for-investors.html


AlwaysLearningToSave

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Re: Second Marriage Finances
« Reply #11 on: August 21, 2015, 10:35:24 AM »
Your husband's desire to not move and downsize twice in two years (for you) or three times in four years (for him) seems reasonable to me.  The transaction costs and practical burdens are significant, even if you move to a rental.  If I were him, I would feel the same way.

It seems to me that you have two mutually-contradictory goals that you need to sort out for yourself.  Your first goal is to support yourself, splitting living costs 50-50.  The second goal is to retire right now.  You cannot retire right now and support yourself at the same time while staying in the same house.  So which goal is most important to you?  If it is more important to you that you support yourself, bite the bullet, work for two more years, and retire when you reach your husband's magic date.  If it is more important to you to retire now, tell him that you want to retire now, that you would be able to do so if you sold the house now, but that you respect his desire to stay in the house until his retirement.  Then present the compromise that you retire now and live off of his income until he reaches the magic date, at which point you downsize (whether or not you move somewhere else) and resume splitting your expenses.  Be prepared for him to want to extend his magic date in light of the fact he would be supporting you while trying to meet his savings goals.   

It seems to me you might be unfairly placing blame on him when it is your self-imposed contradictory goals that are causing your angst. 

DoubleDown

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Re: Second Marriage Finances
« Reply #12 on: August 21, 2015, 11:24:21 AM »
You two are married: is it really a big deal if he lives in the house you own and covers the expenses for 2 years while you enjoy your retirement?  He still makes out because he doesn't need to pay a rent/mortgage, and you don't have to wait for him to retire.

+1

This is a win-win solution, why not implement it? It is not sexist (honestly, how did gender even enter the equation?!) for a high-earning spouse to cover your combined expenses so that you both get what you want. You get to retire and sell the house when it's time, plus relief from what you feel is unnecessary taxation on the high income; he gets to continue working to build up his financial strength some more and move in two years. What's not to like?

Cpa Cat

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Re: Second Marriage Finances
« Reply #13 on: August 21, 2015, 11:28:51 AM »
Why do you need to sell your house in order to retire? You have said that you have considerable investments - why can't you live off your investments for the next two years?

You haven't been really specific - but you've mentioned having minimal expenses and considerable assets. That doesn't sound like you'll need the extra $380k from the house during the next two years. He also doesn't mind paying more than half of the expenses (I'm not sure why you insisted on paying half, since he moved into your house - if everything is truly separate, then he should be paying you rent, right?).

It sounds to me that you're both fixated on roadblocks that are preventing you from retiring - his magic two years and your magic house sale.

He's not really stopping you from doing anything - you're stopping yourself.

KCM5

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Re: Second Marriage Finances
« Reply #14 on: August 21, 2015, 11:31:21 AM »
Why do you need to sell your house in order to retire? You have said that you have considerable investments - why can't you live off your investments for the next two years?

You haven't been really specific - but you've mentioned having minimal expenses and considerable assets. That doesn't sound like you'll need the extra $380k from the house during the next two years. He also doesn't mind paying more than half of the expenses (I'm not sure why you insisted on paying half, since he moved into your house - if everything is truly separate, then he should be paying you rent, right?).

It sounds to me that you're both fixated on roadblocks that are preventing you from retiring - his magic two years and your magic house sale.

He's not really stopping you from doing anything - you're stopping yourself.

All of this. Don't sell the house yet, retire now. Done.

TN_Steve

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Re: Second Marriage Finances
« Reply #15 on: August 21, 2015, 11:41:47 AM »
How about if he buys 1/2 interest in the house?

Candace

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Re: Second Marriage Finances
« Reply #16 on: August 21, 2015, 11:44:57 AM »
Adding to the list of those who don't see his offer to cover you for two years as sexist. He wants you to keep your house longer than you want to, so why shouldn't he pay for it if he can easily do so? It's his objective, so he should be taking the action to achieve it. It's still your house, if I understand things correctly.

Now, the idea that your retirement as a couple only comprises his retirement income stream, that might be another story. I'm hoping that's just a misunderstanding. Maybe he's only counting his because he thinks you want to cover your own expenses from your own assets, without spending down your assets. Or something similar.

I'd like to hear more about your decision to go along with his desire to move to another state. You seem a little ambivalent over that. Do you have reasons to want to stay where you are? "I'm comfortable here" IS a reason, by the way. But if he has good reasons to want to move, and you compromise and move, you should embrace that decision. Hopefully if there's another compromise to be made later, it would go in your favor, in the spirit of give and take. Moving far away is a big deal, and he shouldn't expect you to do that JUST because he wants to. Is it a joint decision, with sincere acknowledgements of one person making a big compromise?

As a married couple, I encourage you to think of yourselves as a team, not just two individuals. I know you were single for a long time and had to be fiercely independent. But you are joined now. He should accommodate you, and you should accommodate him.

Apocalyptica602

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Re: Second Marriage Finances
« Reply #17 on: August 21, 2015, 11:50:12 AM »
Why do you need to sell your house in order to retire? You have said that you have considerable investments - why can't you live off your investments for the next two years?

You haven't been really specific - but you've mentioned having minimal expenses and considerable assets. That doesn't sound like you'll need the extra $380k from the house during the next two years. He also doesn't mind paying more than half of the expenses (I'm not sure why you insisted on paying half, since he moved into your house - if everything is truly separate, then he should be paying you rent, right?).

It sounds to me that you're both fixated on roadblocks that are preventing you from retiring - his magic two years and your magic house sale.

He's not really stopping you from doing anything - you're stopping yourself.

All of this. Don't sell the house yet, retire now. Done.

+1, I don't mean to sound callous but I'm not seeing much of a problem here financially, there are plenty of easy compromises that can be made.

The issue that I do see is that these "easy" compromises aren't easy for you and your husband. You mentioned ego(s), implying you yourself are strong-willed and stubborn to a point as well.

Marriage is a partnership and in NO way are you expected to be the same person or have zero differences in opinion, however you're still a team despite separate finances and should be able to work these things out.

I'd recommend taking some of the advice and compromises presented above and having a calm discussion with your husband and go through some pros and cons of how each of you are feeling.

OMY syndrome is a real thing (TwoMY syndrome in his case), so while the math supports you're able to retire now he still has (possibly irrational) fears that he needs to work until this 'magic date'.

Just because his fears are irrational however doesn't mean you can just be like 'that's wrong I'm selling the house lets retire now'. It's a process and maybe you can bring him around to your side.

Bruinguy

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Re: Second Marriage Finances
« Reply #18 on: August 21, 2015, 12:10:07 PM »
...his solution is to "help" me out financially in some way, which comes across as pretty sexist because because, if I could sell the house, I wouldn't need his "help." I'm in a position to live quite comfortably on my own finances but his situation is preventing me from doing that.

It sounds like he is offering a great compromise!

You want to retire and could do so if you sold your house.  He doesn't want to move yet.  He understands that his choice affects you and is offering a way for you to both have what you want.  This seems like a good and healthy approach to the relationship.

And, I don't think he is purely "helping" you, he's helping himself too.  He wants to work (and to have a happy spouse) and is willing to do what it takes to achieve that.

As far as your personal financial security, it doesn't change if you accept his compromise.  You are still able to financially support yourself in retirement.  By accepting his offer, you are not giving up your financial strength. It is still your house, your equity, and you can still take care of yourself.  If he changes his mind and decides that he doesn't want to pay the extra expenses, you are still in a position to sell your house and be financially secure.