Pay Dirt

My Rich Fiancé Has an Absurd Rich-Person Habit

It’s taking him forever to get me a ring.

Hands hold out a box with a ring in it
Photo illustration by Slate. Photo by Getty Images Plus and Spoon Graphics.

Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here(It’s anonymous!)

Dear Pay Dirt,

My boyfriend and I have been together for over five years. We picked out an engagement ring about a year ago, and I have been waiting for a proposal since. I finally asked him about it. He revealed that even though he wants to propose, he hasn’t been able to buy a ring because he has extreme anxiety around spending large amounts of money. He says that he is terrified of spending any of the money he has saved because he has no idea what the future might hold. I made it clear that since that is a serious issue for him, I don’t need a big ring, or a ring at all.

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However, that doesn’t solve the bigger issue because someday, I imagine he will need to spend some of his money on something! I always knew he was a diligent saver but I didn’t know the scope of it until recently, because we applied for preapproval on a mortgage and he finally (begrudgingly) shared his account details with me. He has been making six figures a year since he entered the workforce, and he has about $300K just sitting in a savings account.

He says he’s going to grit his teeth to spend part of it on a down payment, but I had no idea that it gave him SO much anxiety. I also know that looking for a house and buying an engagement ring at the same time is insanely stressful, but he did mention that he knows he worsened the situation for himself by procrastinating the ring purchase. Also, he’s the one that wants a more expensive house than I do! (For background, he knows I don’t really have anything to contribute to the down payment, but we’re going to split the monthly payments about 60/40 since I make about half of what he does.)

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Again, I made it clear to him that he is more important to me than the ring or a nice house, but in the long term, I think he still needs help dealing with this anxiety, right? How do I help him conquer this fear?

—He’ll Need to Leap Sometime

Dear Leap Sometime,

It’s great that you recognize this now and want to work on it, versus 10 years down the road. You also don’t want to be arguing about finances if you’re planning a wedding together soon. Wedding planning is stressful enough without having to fight over who will buy what, how much is worth spending on venues and caterers, and so on. To help with this question, I spoke to Martha Lawton, financial coach and the creator of Squanderlust, a podcast about the emotional side of money.

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“There are ways you could be unintentionally reinforcing your boyfriend’s anxiety, and they give us the clues to starting to reduce it,” she says. In almost all relationships, there tends to be one partner who is more likely to spend and one who is more likely to save. This could be fine, but sometimes we unknowingly egg the other on with our behavior. So if you’re telling your BF to get over it (I wonder if you are? You did write to Pay Dirt asking for confirmation that he needs to do so), then you may be exacerbating the situation.

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Some tips Martha shares to help get through this? “Don’t minimize his anxieties. Bad things happen. He just wants to be financially secure.” Getting married and buying a house probably feels like a big responsibility to him; if you look at it that way, the fact he had trouble buying the ring makes sense. She suggests that you should be focused on getting your own financial house in order, if you haven’t already done so. This could help him see that you’re financially well off without him, and he won’t feel as accountable for the both of you.

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Dear Pay Dirt,

My parents both recently passed and, much to my surprise, I inherited an IRA worth about $34,000. I followed the rules for setting that up in a brokerage account, and now understand that I have 10 years to withdraw those funds. I’m 51 and single, with a nicely growing retirement plan through my employer, no debt beyond a recently refinanced 15-year mortgage and reasonable car payment, an 18-year-old about to go away to college mostly on scholarships, and a 23-year-old on a long-range college plan due to some (manageable) health issues. I am in no hurry to take withdrawals but also don’t want a big tax hit later. How do I invest this for some midterm growth while taking a bit out at a time?

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—Trying to Stay Balanced

Dear Trying to Stay Balanced,

I am so sorry for your loss. It sounds like, even prior to your recent inheritance, you were already in great financial shape. “The main thing to remember about inheriting a traditional IRA is that distributions are generally taxable at the beneficiary’s ordinary tax rate,” according to Smart Asset. And the IRS’s rules about distributions—the penalties you might pay for taking out distributions, the required amount you must take out every year—will depend on your age when you decide to start taking distributions and the age of the account holder when they died, so do look into the specifics. You won’t be able to roll this IRA into a retirement account you already have, because you inherited it from a parent rather than a spouse. Given your finances otherwise, it may make more sense to look into monthly withdrawals and then take that cash to put into a brokerage account. I highly recommend Fidelity as a place to open such an account because they will walk you through the process and assist with making sure you know your options.*

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Dear Pay Dirt,

There are five siblings in our family and our mother is still living. Dad, who was the provider and handled all the money, died about five years ago. At that time my brother and one sister were sharing the power of attorney. They decided, without my knowledge, to deed my parent’s real estate to themselves on the pretense of keeping it from being considered part of my mother’s estate should she need to be put in a nursing home.

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Shortly after that, my brother took $250K from my mother’s account to pay off the mortgage and moved into Mom’s lake home. He has also claimed her boat and vehicle as his own and doesn’t feel any obligation to any of the siblings who got nothing because he “is dedicated to taking care of Mom at home until she dies,” per her wishes.

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If that is true, then there was no reason to deed the property to himself and my sister. Mother is suffering from dementia and is unable to rectify the situation. I recognize that he is her caregiver but I don’t feel that it is fair for him to take all her assets, valued at close to $900K for himself in return.

I don’t know what is in Mom’s will, but want to be prepared when she passes on. I don’t want to go to court, but the two with power of attorney have refused mediation. Do I and my two sisters, that were left out when these arrangements were made, have any legal recourse to a more equitable distribution?

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—We Weren’t There, but This Doesn’t Feel Right

Dear We Weren’t There,

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How shady! Should your mother go into a nursing home sooner rather than later, I would understand why they would want to deed the house to themselves. Nursing homes calculate your contribution based on assets, to figure out how much to charge you before Medicaid will kick in to help. Nursing homes are expensive, and your estate would be gone quickly. But it doesn’t sound like they are sharing the wealth, or even taking into consideration anyone but themselves.

My best advice is to get an estate attorney, stat. You are not allowed to change a will or trust once someone has something like dementia or Alzheimer’s, as such changes could be considered undue influence or coercion, which are both illegal. An attorney will walk you and your sisters through what can and needs to be done, according to your own individual state laws. Good luck.

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Dear Pay Dirt,

I am a single parent in my late 40s. I make $330K-plus a year (thus am in a high tax bracket) and live in a very expensive city. I have always rented, mainly because it’s hard to save for the down payment (I strongly believe 20 percent down is the right way to go), while saving for retirement, paying off student loans, and covering child care.

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However, I am finally at the point of being able to purchase a condo with 20 percent down and a full six-month emergency fund. The problem is that I am not convinced that buying is a great investment vs. renting. I will be forced to remove $200K from my brokerage account, which, up until the last few weeks in 2022, has been far outpacing the real estate market in growth. If I sell off part of my portfolio, I will need to pay capital gains taxes on the proceeds.

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Also, due to the high cost of condos in my area, my monthly mortgage payment will exceed my rent. The portion of my mortgage payment allocated to interest, taxes, and condo fees is almost exactly my rental amount, and the portion allocated to “principal” (i.e., equity in the condo) will be less than what I currently save on a monthly basis while renting.

Moving to a less expensive area is not an option (commuting would dramatically reduce my quality of life).

Every person I know insists that buying is better. It’s the American dream, blah blah! But I just don’t get it; the numbers don’t appear to come out better for me buying. That said, my child longs for a “forever home” and I don’t blame him (I kind of do, too). Please help.

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—Is Buying Always Better?

Dear Always Better,

As much as I love the idea of a “forever home” for you and your son, I also can’t imagine telling you it’s a good idea to take $200,000 out of your brokerage account. I also can’t tell you it’s a good idea for you to purchase a condo when your mortgage payment is going to be more than your rent even in today’s insane market. Plus capital gains?! This is too much.

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It’s not always a smarter idea to buy vs. rent; it’s really up to you and your lifestyle goals. There is a ton that goes into owning a house, such as your down payment, inspection costs, and escrow fees. That’s just the beginning. You said “condo,” so you probably have HOA fees and then property taxes. Plus, what if something breaks? Also, statistically and historically, the stock market outpaces real estate for investing purposes.

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I say owning a home doesn’t have to be your American dream. Making sure you have a sizable nest egg, taking care of your son, and having enough money to do whatever the hell you want, when you want, can be yours instead.

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—Athena

Correction, April 20, 2022: This answer originally gave advice based on a mistaken assumption about the way tax brackets work. The revised answer omits this advice.

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