What are the financial consequences of marriage?

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Posted by Luke Burns (MONEY FORUMS: 4, Answers: 0)
Asked on May 4, 2016 12:24 am
Private answer

Hi Luke! Thanks for writing. Thinking about getting married? That makes this romantic gal very happy to hear…so exciting. The financial consequences of tying the knot? Let’s look at the good, the bad, and the ugly.

The Good – now there will be two of you to manage one rent or housing payment and to share food and utilities and all the other expenses of life. You can file your taxes as Married Filing Jointly, which gives you a tax break. You may be able to be added onto your spouse’s health insurance or your spouse on yours, which could collectively save you money. You will probably get some nice presents and a fun trip as a result of the wedding, and going forward you get to GIVE one present as a unit for all the gift-giving occasions in life, thereby saving money. Statistically, married people live longer and are more healthy in life, which will save money. If you become ill or incapacitated, you don’t need to pay some one to take care of you because you have your spouse. If you don’t work, you can use your spouse’s earning to contribute to an IRA; normally a person can only contribute tax-deferred money to an IRA with their own earned income. Marriage offers many financial benefits.

The Bad – You and your spouse’s spending styles could conflict and if you are a saver and your spouse is a spender, you will find it difficult to maintain your formerly frugal life. If you pool your finances, you may disagree with some of the things your spouse spends on. If your spouse doesn’t choose to file as Married Filing Jointly with you, you will have to file as Married Filing Separately, which causes the loss of some tax breaks.

The Ugly – You are responsible for each other’s debts including medical and long-term care if that situation arises. One of the tough things when elderly people re-marry after losing a spouse is that the healthy spouse’s life savings (that they had hoped to leave, perhaps, for their own offspring) could be eaten up by a long-term care situation if, for example their new spouse got Alzheimer’s disease. If your spouse causes an accident, cheats on taxes, or has legal issues, you are responsible for the bills. If your marriage doesn’t work out and you decide to divorce, that will cost money.

All in all, I think that the positive financial consequences of marriage far outweigh the negative. I’ve been married for 30-some years! Best wishes to you and please write back with more questions.

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Posted by Kathryn Hauer (MONEY FORUMS: 0, Answers: 18)
Answered: May 5, 2016 1:51 pm