Ask Farnoosh: Help, I’m Dating Someone With a Ton of Student Debt!

Johnny asks: I have built up my financial position over the past 5 years. I always put into my 401(k), have 6 months of expenses saved, and regularly pay down mortgage principal if any extra cash comes my way. Recently, I began dating a lovely woman with a TON of student loans. If we eventually get married, do you have any suggestions on how to divide up finances given her large monthly payment?  Any suggestions on how I can help her without writing checks to pay off her loan (which at this point doesn't feel appropriate)?
 
It sounds like your girlfriend’s finances aren’t necessarily scaring you away, but that you’re trying to be rational about the situation, which is commendable. A study by IHS Global found a growing number of young couples are pushing back marriage and starting a family, as they grapple specifically with student loan debt.
 
I have some advice for if and when the two of you choose to get married. But first, a few tips on how to best manage the relationship – and her debt – now, while dating. If you see the relationship getting more serious, do discuss her debt sooner rather than later and how you can help her to pay it down. What are some things you can both do to cut back on spending? Fewer dinners out? A staycation this summer? Selling some old items? It’s important for her to see how invested you are in the relationship’s future. It may give her the motivation to pay off the debt more aggressively, because she’ll know it’s not just what’s best for her future, but both of yours. And if this means pushing the wedding – and all its associated costs – to a later date, I think that would be smart.

When you’re married you’ll inevitably need to figure out what’s yours, mine and ours. And personal debt brought into the marriage, in my opinion, should always be kept separate. If you feel compelled to help her ease her debt burden, you can always volunteer to do so. Just make sure your name never ends up tied to her debt; if it does, it becomes your legal responsibility. For example, if you both take out a home equity line of credit and use it to pay off her student loans, then you’re both on the hook for the debt. Or, if she takes out a personal loan for the purpose of debt consolidation and you cosigned the loan, you'll be on the hook for the debt if she can't pay it for whatever reason.
 
Hopefully you’ll take advantage of this time now before saying your “I do’s” to encourage her to reduce her debt load, with you as her coach. If she still has a sizable monthly payment once you get married, perhaps it’s you who takes care of most of the major bills to allow her to use every extra penny she makes to erase this debt once and for all. Maybe a big chunk of your joint tax refund should go toward her debt. That may not sound fair, but when you enter a marriage with someone who’s saddled with debt, you will need to prepare for financial trade-offs. You’ll need to be a team player and that may temporarily mean more giving than taking.
 
@susandanvers tweets: I was married for 13 years when my husband passed away. Can I claim his Social Security benefits at age 60, and switch to mine at full retirement age?
 
The short answer is yes, as a widow you are eligible to begin collecting your husband’s Social Security benefits as early as age 60. You’ll need to go to the Social Security office and show them your husband’s death certificate and proof that you were married for at least nine months.
 
This also assumes that you won’t get remarried before age 60, in which case you can no longer receive benefits as a surviving spouse. Once you reach full retirement age, you can begin getting your own benefits, but if you wait until you’re 70, you will, of course, achieve a higher payout.
 
Another thing to note: because you’re not yet at full retirement age, you won’t receive 100% of your husband’s benefit for now. According to Social Security consultant Marc Kiner, a surviving spouse will receive a 28.5% reduction at age 60. That cut is eventually restored when you reach full retirement age, which for you is either 66 or 67, depending on your birth year.
 
If you want more help figuring out how to best maximize your and your husband’s Social Security benefits, there are a number of online calculators worth checking out. AARP has a free one that gives you the basics on the best time to start collecting benefits based on your circumstances. There are also a few companies, including SocialSecurityChoices.com and MaximizeMySocialSecurity.com, that offer more analysis for $30 to $40, respectively. (Also see: When to Take Social Security?)
 
Got a question for Farnoosh? You can reach her on Twitter @Farnoosh or email her at farnooshfinfit@yahoo.com.