NEW CASTLE — Dear Dave: I recently got engaged. Is it okay for us to go ahead and combine finances and start working on a budget before we get married? — Adam
Dear Adam: No, it is not OK to combine finances with anyone to whom you’re not married. And by “OK,” I mean wise. I’m happy that you’ve found love, but all kinds of things can happen before the rings are slipped onto your fingers. I’m not wishing bad things on you, but what if you spend time paying off her debt, or vice versa, and then the relationship doesn’t work out? Bringing finances into that kind of situation is just asking for trouble. You do not want to go there! Now, all this doesn’t mean that you can’t begin working together on budgets for the future and goals for your lives. We’re talking about full disclosure to make this happen. She knows all about your income and debts, and you know about hers, too. You guys need to have some serious discussions about saving, spending and debt, and get on the same page with your finances before the big day. But no, my advice is that you each pay your own bills until after you’re married. Once that happens, there’s no “yours” and “mine” anymore. It all becomes “ours.” — Dave
Dear Dave: I just turned 57 and have been researching long-term care policies. Is there a point where you can self-insure for long-term care needs without a policy? — Peter
Dear Peter: Mathematically, I’d say you could safely self-insure if you have the resources available to support your care in a nursing home or other facility for 25 years. Of course, if you’re married you have to think about your spouse and make sure she has enough to live on comfortably at the same time. That’s a lot of money. In my mind, it’s a large enough bill that it makes sense to transfer the risk to a long-term care insurance policy.
The simple truth is most people won’t have enough money to self-insure for that kind of thing when the time comes. If you have $20 million liquid sitting around, then you could easily set aside $2 to $3 million for long-term care and still be in great shape. But I advise virtually everyone to have good, long-term care coverage in place by age 60. For many folks, it can make the difference between living with dignity and having to depend on the government. And that’s not something I ever want to do for anything — especially not my healthcare! — Dave