After Valentine's Day, It's Time to Talk to Your Loved One About Money

Chances are that a least a few of you out there have put off or just outright avoided talking to your partner about money. I know because I see a lot of you come into my office after this has become a problem. But a few recent studies show there are more Americans that you might think who are hoping a little avoidance might keep the tensions down.

In a CreditCards.com survey last January, 6% of respondents admitted to having a secret account or credit card, and far more, about 20%, said that they had spent $500 or more without telling their financial partners. Obviously, most of us won't go so far as to resort to secrecy. Instead we reach an unspoken agreement not to talk about things with our partners. We know it's not a great solution, so why do we do it?

Like the other decisions we make together in a household, financial decisions bring out the differences in our styles, tastes, and priorities. She's happy to spend more on hiking trips; her partner would cut down on the travel to get a better car. Neither position is wrong, anyway. This is simply a matter of preference, and in any healthy relationship, the two will find some sort of compromise. But compromise doesn't work as well when our sense of survival kicks in. And that's precisely what tends to happen when financial discussions turn heated.

Not a few of us are prone to a particularly strong belief that the world is unpredictable, that fate is capricious and that disasters can happen to anyone. When these sort of beliefs simmer in the back of your mind, you are often quick to make the leap from an apparently mundane financial decision to a sense of looming danger and vulnerability. Job losses, medical emergencies, housing emergencies and other far more amorphous dangers float in the back of your mind. And a perfectly innocent partner can trigger those fears by suggesting you take $800 out of the savings account this month to replace the old refrigerator. Those of you with financially anxious partners will recognize this moment and roll your eyes.

But before you get too smug about your ability to keep that $800 fridge in perspective, make sure you aren't one of those partners who spend money in the same spirit of anxiety. People who seem unconcerned about the consequences of their spending may also be living with the sense that catastrophe could strike. For them, hoarding does no good—the best strategy is to secure anything they really want or needs before it all gets taken way.

Not everyone is anticipating a financial crisis, of course, and I haven't got room in this one post to cover all of the other deep-seated emotions, desires, and fears that tangle our financial decisions. But if either of these situations sounds familiar, then those household discussions about everything from grocery bills and vacations to retirement contributions and job changes are going to demand a little extra care and a little extra understanding. As I routinely explain to planning clients, I can give you all of the financial options and the math behind them, but the right choice in the end will be the one you can live with.

Health Care After 65

Let's just assume that you've been coasting along on an all-expenses covered, cushy, employer-provided health plan. Or not. U.S. citizens are accustomed to complicated world of deductibles, premiums, and surprise charges that make up our health care system. Obviously, these pitfalls can have an enormous impact on your finances. So as people approach their sixties, we usually have them start thinking about the unique challenges of health costs after 65. Here are some of the things you need to know.

Apply for Medicare at 65 (whether you need it or not)

Thanks to one of Medicare's stranger regulations, you will want to apply during the three-month period before you turn 65 for Medicare only (you can wait to apply for social security or spousal benefits later). This is true even if you are still working and covered under your employer's health insurance policy. If you don't apply at 65, you could end up with problems when it is time to use your Medicare, including the possibility of higher premiums. Fortunately, applying for Medicare can be done pretty simply by going online here.

Medicare Might Not Cover As Much As You Think

What if...? It's a typical insurance sales opening intended to get your anxiety up so that you are more willing to buy insurance. Unfortunately, it's also a necessary question when it comes to health care. And let's face it, the likelihood that you will have not any particular medical problems after 65 is pretty small. Most people in my experience figure that Medicare will solve this problem. It does, sort of, but not the degree you'd think.

Like private health insurance policies, you will have to think about copayments and deductibles when deciding what sort of Medicare plan you want. While the government itself provides the baseline Parts A and B, private insurers offer Medigap plans that follow strict rules to fill in where the government won't. Those Medigap plans come in alphabetical order (Medicare Part B, Part C, Part G, etc...) and mean you will pay some level of premiums to get better coverage. Most people who can afford it will choose to buy a supplemental program.

You can see the problem when you look at Medicare's own partial list of things people assume are covered...but aren't:

• Long Term Care (i.e. nursing home or assisted living)
• Most dental care
• Eye examinations related to prescribing glasses
• Dentures
• Cosmetic surgery
• Acupuncture
• Hearing aids and exams for fitting them
• Routine foot care

Putting aside foot care and hearing aids for a minute (seriously?), the one that really stands out is long-term care—there is no Medigap plan that covers this after the first 100 days. Keep in mind that we aren't just talking about being in a nursing home; long-term care can also include home health care or a skilled nursing facility if you have a chronic illness or an accident (i.e. the broken hip). Medicare pays for your nursing care in such a situation for 20 days. After that, you get Medigap coverage for another 80 days. And then you're on your own.

How can this be, you ask? All those people who can't afford care after 100 days get routed to Medicaid. And that program is only for the financially needy. Given that the average cost of nursing home care in the U.S. was over $6,000 per month back in 2010, people who weren't financially needy when they started often become so.

The only solutions we've found to this problem so far are these: 1. be prepared to lose everything but your home and about $2,000 in cash to get covered by Medicaid; 2. avoid old age; 3. buy long-term care insurance.

I won't go into the particulars of long-term care insurance in this post. Suffice to say that it's expensive to buy and more expensive to not buy. We recommend that couples start looking at a policy as they approach their 60's and single people look a little earlier.

For more information on Medicare and its associated programs, go to Medicare's plan choices site.

For more on programs if you do need to find long-term care for someone, try this site called "Paying For Senior Care."

What if you live to 103?

This weekend Bloomberg News featured an article by Suzanne Woolley about the perils and conundrums of trying to plan your finances around our increasingly long life spans. For the article, Woolley interviewed David Little, Director of the Retirement Income Planning Program at the American College of Financial Services. Unlike the standard use-your-401k, retire-later advice articles, Woolley's piece delved into how Littell was personally wrestling with decisions about home, work and family. For the next two weeks, I want to use my posts to look more closely at some of the questions raised in Woolley's article—the real decisions that make up long-term planning.

According to the article, Littell faces some fairly standard challenges when it comes to his long-term finances. At 61 years old, he earns in the low six figures and has diligently put a way money regularly in 401k's and other tax deferred accounts,  but he has a partner whose recent retirement has him thinking about how he could cut back on work in a few years. More importantly, he's wondering how to account for the fact that his father, who retired at the ripe old age of 75 is now 103 years old.

Littell's father brings him (and us) face-to-face with a new reality. Most of us in GenX or the Millenial Generation have already decided that "retirement" is likely to be more of a stress-reduced continuation of our work lives, whether because we won't be able to afford a full retirement or because we simply dislike the idea of having nothing important to do for a few decades. But even as advisors like me push our client plans to the age of 99, and workers look to 70 or 75 as a more appropriate "retirement" age, life spans (and "retirements") seem to keep getting longer.

In thinking about how to address this challenge, I want to look at a short list of the tools, strategies and personal questions that will become increasingly important to all of us:

Not Real Work: The Low-Stress "Retirement" Career

Social Security's Strange Schemes

The Unpredictable World Of Health Care (and Long Term Care Insurance)

The Retirement Account Menu

Annuities: The Oldest (And Most Confusing?) Retirement Accounts

When Is A Home A Home?

Retiring Abroad

Have another topic you want to see on the list? Leave a comment or send me an email, and I'll throw that one in, too.