Husband's illness spurs possible career change

Dear Bruce: I have a husband who has no life insurance and says, “Why should I pay for something I won’t use?” Even though he is a lawyer, he refuses to make a will. We have a good income, a large house with a small mortgage that will be paid off in 2 1/2 years and a 401(k) in the mid-five figures. Our problems: $12,000 in credit-card debt, mostly from helping six kids through college (four are still there), and no emergency savings.

My husband has since learned he has diabetes, giving him a reason to do what he always wanted to do: travel like mad and take spur-of-the-moment trips to see his relatives. Again, he says it’s his money. I know he is sensing his mortality, but he refuses to discuss it, so I have made plans of my own. I have a small accidental policy I have hidden from him that covers our college-age children and us. I have put copies of important papers in one place. And I have told my oldest children what I want to happen if both of us should die at the same time.

My biggest dilemma is my career. I am 50 years old, with a degree in mathematics, but I have worked part-time as a legal secretary for 30 years and would like a change. Should I go to full-time employment now and forgo more debt, or should I go back to school and get a teaching credential or graduate training in a mathematical field? – R.J., Riverside, Calif.

Dear R.J.: I think you covered it all when you say that your husband is sensing his mortality. Diabetes at his age is probably Type 2 and hardly a death sentence. You didn’t indicate if he was going on these trips by himself or with you. It seems to me if he is doing this all on his own, it’s symptomatic of deeper problems. Why he refuses to make out a will and not carry insurance is beyond me.

That said, you are doing the right things in terms of planning for yourself. There is nothing wrong with a midlife change in career paths. Whether or not graduate training or teaching credentials is the best route is a matter of personal preference and the job market where you live. It’s a shame you couldn’t have your husband sit down with someone he trusts and advise him of the mistakes he is making.

Mom may need to go back to work

Dear Bruce: I am a 34-year-old responsible man that is in a controlled financial mess. I have a mortgage, two brand new car payments, two home equity loans, one student loan, a credit card payment and a loan from a retirement savings plan. My wife just quit her job to raise our new child. I make about $80,000 a year working two jobs. How can I clean this mess up? – R.B., Montague, Calif.

Dear R.B.: You got it right when you said you have a mess, and you would be surprised how many letters I get from readers who are in a financial mess just like you. The first problem that I see is that this may have not been the most appropriate time for your wife to leave her job. Beyond that, one car in the family should be sufficient. Get rid of one, and that will take care of one of the payments. You guys will have to start living a very austere life. The first thing that you do is to put yourself on a very, very modest budget. That means go over your finances; those things that you can’t finesse are the items that are served first. You are going to find in all budgets that there are discretionary funds, and right now you can’t afford to be discretionary. The first thing you must do is to control your spending and assign priorities. Not an easy thing to do, but it is an absolute requirement for you.

Savings yield huge dividends

Dear Bruce: I am 42, and my wife is 35. She is employed and contributes 6 percent of her salary to her 401(k), the maximum she can contribute. She ends up putting in about $6,000 to $7,000 annually, depending on bonuses, etc. I am a house dad, staying at home with our two children, ages 4 and 2. I am also going to school to become a teacher and will start working when the youngest starts school. My wife contributes the max to a Roth 401(k), and I do the same to a regular individual retirement account. There is around $100,000 in the 401(k), and the IRAs have a value of $55,000. My question is, should she make a nondeductible contribution to her regular IRA to make up for the shortage she could contribute to the 401(k)? Is it worth the accounting nightmare? – Reader in Texas

Dear Reader: I don’t see why you are concerned about an “accounting nightmare.” If you keep appropriate records of when deposits are made and in what amounts, it should not be difficult to assign a value to these on an annual basis, so, when the time comes, the records will be there. Every dime you can put away, comfortably, pays huge dividends in the future, and I would surely encourage it.

Out-of-the-loop wife needs counsel

Dear Bruce: My friend’s husband has all his money, house and bonds in his name only. He refuses to put his wife’s name on anything. If he dies before she does, will the government take most or all of the assets? How does this situation affect her? – E.M., Waterloo, Iowa

Dear E.M.: I’m always taken aback when spouses treat their husbands or wives so poorly. Why he’s acting this way could be for a variety of reasons – bad first marriage, etc. – but she also has acquiesced in allowing him to do this. At the very least the wife will be entitled to one-third interest in her husband’s estate. Where the rest of the money and property goes depends on a number of variables, including the existence of a valid will, possible trusts, etc. If she is truly uncomfortable, while he’s still alive, your friend may wish to seek counsel.

Bruce Williams is a national radio talk show host and syndicated columnist. He can be reached at bruce@brucewilliams.com.[[In-content Ad]]