Posted by: kevinfortruth | January 3, 2012

When the economy nudges people together


“Seniors who are alone, and sometimes feeling lonely – sometimes decide to pursue companionship – either living together single or marrying to help offset the rising cost of almost everything – from groceries, health care, taxes, utilities, fees, and fuel.”

Exactly what is fair in love and war regarding living with someone or marrying someone in their golden years?

Most couples can hardly wait until their retirement years – they save, they plan, and they fantasize about that period of their lives when they can enjoy quality time together without being on call or being a slave to a rigid work schedule.

Many things can happen along the way to derail those anticipated retirement years together – death of a spouse, a serious life-threatening health condition or disease, suicide, financial ruin, infidelity, or a variety of family emergencies usually resulting in serious financial consequences.

In many cases, the premature death of a spouse turns the lights out on the best of dreams of vacation traveling across the United States, visiting family and friends along the way – late night conversations of years bygone, and family reunions.

What is the surviving spouse to do?  In most cases, the house he or she is left with might be paid off but it is now too large for one person – the property taxes and utility bills and the square footage are more than one person can keep up with.  The surviving spouse no longer needs the 3 – 5 bedroom house with the formal dining room, eat-in kitchen, living room , and family room – to say nothing about the two and one-half baths that need constant cleaning.

Invariably, the surviving spouse has little or no desire to  meet anyone – much less marry again but sometimes financial considerations become the mother of necessity and one might entertain thoughts of living with someone or even marrying someone out of economic necessity.

If the spouse died in the house by suicide, heart attack, or simply running out of steam, there might be a desire to sell the house to take away the constant memories of the other spouse and how he/she died.

Some “new” couples will sell their current respective homes and get a new home together and that is fine – but it requires sound judgment and careful planning.

A good friend of mine introduced me to someone halfway across the country – not in person – we have only chatted on the phone a handful of times.

After numerous conversations about prior marriages,  family and current living accommodations, the subjects gradually shifted to things like healthcare, social security, and of all things – pensions, which caught me off guard.

It turned out that this woman’s husband died about five years ago and she is now desiring to enter another relationship – but not via marriage because she is receiving his military pension and if she remarries, she will lose that, along with military healthcare and other things like Commissary and BX priviledges.

If she decides to marry a military retiree, she will regain healthcare, commissary and BX privileges but she will still lose her ex’s pension and that is risky – because if the new marriage does not work out and they divorce, she will lose everything military related.  That is a lot to think about.

Her house is paid off and she told my friend that she would buy another house if the new relationship “feels” right so they can start off making their own memories in the new house together.  She would then rent out her primary house just like she does with her other house. 

Here is where the glitch comes in – and the glitch is major.

She has worked hard all her life and has amassed a considerable amount of money and she now owns two homes, including one rental property – both of which are fully paid off.

Her desire is for the new man in her life to pay for everything – the house payment, utilities, cable, and so on and so on and so on.

To me, and many others, I am sure, that is totally unrealistic.  She previously said to my friend that the new man in her life – who she would prefer to live with versus marrying – would pay 70 percent of everything, which again does not seem fair.  The biggest drawback to that option is what exactly falls under the category of “everything”?

We, at our age, are all on some kind of fixed income – be it Social Security or some kind of pension and maybe we have other money invested in stocks, CD’s, money markets, or 401k’s.  No matter where this money resides, we need to be careful with it because one bad decision with the wrong person and we could lose a substantial amount at the blink of an eye.

 If two people are compatible and they are in it for the long haul, living together makes sense – especially if one or both parties cannot marry due to loss of some financial or health care benefit.  Even if the budding relationship does not have a strong sexual/romantic foundation, the value of companionship cannot be understated.  Having that partner to simply talk to and share meals, housekeeping chores, get-togethers like holidays and other occasions, can be invaluable and life extending to say the least. 

The intangible benefits of living together can exceed tangible benefits – but there is absolutely no doubt that two can live cheaper than one.

Each prospective partner has to be realistic in how they might participate financially in the new relationship.

If the new partner moves in with the other person who currently lives in a home that is totally paid off, how does one determine how to share expenses?

For example, this new acquaintance lives in her home and pays utilities and property taxes – and because she is older, like I am, her property taxes are reduced.  There are also things like home insurance, utilities, cable (television), phone, food, vehicle costs, and other things like healthcare.

I, on the other hand, have expenses like apartment rent, rental insurance, a car lease, food, car insurance, utilities, phone, cable, and like her, health premiums and prescription costs.

So, how do people decide how to arrive at numbers that will work for them?

During one of our conversations it was “suggested” that her new partner should pay 75 percent of everything and on first blush I felt that was an unrealistic percentage.

Even though I would be happy living with someone, I do not feel I should be absorbing that much of someone else’s expenses.

We both have car expenses and more personal expenses and those should not factor in any calculation.

This subject only came up because she expressed how important it is too her because of how hard she has worked to amass her current wealth.

To be sure, I am only posting this to find out how others think matters like this should be thought out in fairness to both parties. 

I, myself, am not looking for a solution.  I am fully capable at arriving at a fair decision – with anyone who reasonably wants to find a middle ground.  A truly lonely person might concede too much, while a content person might take advantage of a person in need of finding a companion or spouse.

If I were to agree to live with someone I would layout all the other person’s household expenses – monthly and annually, adjust them to include increases because of me, and divide that total by two.  If that number is agreeable to both of us, I would supplement that number by an agreed amount that would be added monthly to a joint checking account that would be used to pay all combined expenses.  Keep in mind that car expenses and health care premiums and prescriptions and other more personal expenses would be kept out of any formula or any joint checking account.  I arrived at this position by pure logic, and not with my heart, but personal considerations could factor in and the final number could go up or down accordingly.

Again, the pleasure of another’s company can’t be valued in dollars and cents – but the intangible value of friendship and companionship can lead one to arriving at a fair decision.

Please feel free to comment on this post, especially if you have any experience in these matters.  Also, feel free to post your thoughts or insights that you feel might help others in similar circumstances. 

Feel free to forward the link to the blog to anyone you think might benefit from reading it.  If you know anyone that can add value to this blog by commenting here, please ask him or her to do so.  Thanks.

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