Getting married is a big decision that is deeply personal to each individual and a significant commitment meant for life. But, if you were wondering if it makes financial sense to get married, several factors point to YES!
Combining your finances with another person can sound tricky, and it can be a little complicated to navigate initially. However, this can also open up many financial benefits in various areas, such as taxes, budgeting, insurance, government benefits, retirement planning, and more. Here are seven economic reasons why you should get married:
Shared Expenses
Your total household expense may go up when going from a one-person household to a two-person household, but it certainly won’t be double. In fact, there will be a significant decrease in per-person expenditure.
This is because two people will now share several major costs, such as housing, transport (if you carpool), utilities, entertainment, etc. You can shop for groceries in bulk, further reducing per-person costs and also cutting down on several other expenses that one person may have been covering on their own previously.
More Tax Breaks
One of the most significant financial benefits to being married is related to one of the un-sexiest things in life – taxes. But if it means having more money in your pocket, I’m sure you wouldn’t mind spending some time going through them!
Once married, spouses can file their tax returns jointly by combining their incomes in a joint tax return, which may make them eligible for higher tax deductions and credits than single filers. Plus, filing one return should take a lot less time (and money) than if they were to file separately.
If either person in the marriage owns a sizeable financial estate, they can be privy to significant estate tax benefits. Upon death, any or all of it can be passed onto the spouse without any estate tax! And if they sell a home that was owned by them both, they can avail a double exclusion on the sale proceeds.
There may be rare occasions where filing jointly causes them to qualify for a higher tax bracket, especially if both spouses are high-income earners. If that’s the case, both parties can continue to file separately, although this would limit their tax breaks.
Better Social Security Benefits
Social security benefits such as disability and retirement don’t change when a person marries, but they may receive additional benefits if their spouse passes away. The living spouse can receive up to 50% of their late partner’s benefit. To qualify, you must be over the age of 60 and have not remarried or 50 if you’re disabled. Even those who divorced before their spouse’s passing can receive benefits if they had been married for at least ten years, are 62 or older, and have not remarried.
However, this does not apply to couples where the living spouse’s work history shows higher earnings than the one who has passed away. Furthermore, couples with one or more parties who are blind, elderly, or disabled may be disadvantaged by tying the knot due to loss in Supplemental Security Income (SSI). This is because the combined maximum benefit for a couple is only about 75% of what each party could have received individually.
Borrowing Money is Easier
Individual credit scores don’t change even after someone gets married, but if one spouse has a better credit score and history than the other, it could benefit the spouse with the lower score immensely.
For one, credit applications allow you to include your combined household income, which will help you get approved for a higher loan amount. You can also improve your chances of obtaining credit if your spouse cosigns the application, especially if their credit history is more favorable than yours.
Lower Insurance Costs
Insurance is another financial aspect that can be combined once you’ve gotten married. Most policyholders provide insurance with lower premiums to married couples than to single policyholders. This includes health insurance, auto insurance, and more. The Zebra, an insurance price comparison website, claims that tying the knot can help you get an average 6.5% discount on auto insurance! You can shop around and find the best deal available in your locality.
More Choices for Benefits
Married couples can choose from a wider variety of benefits because either spouse can take advantage of benefits provided to the other spouse. For instance, if your spouse has better health insurance provided by their employer, you can choose to participate instead of opting for your own health insurance even if your employer also offers it.
You may also be able to avail other benefits offered by your spouses’ company, such as military or childcare benefits. You can also take advantage of your spouse’s dependent care flexible spending account (FSA) to directly lower your taxable income.
IRA Contributions
Single people without earned income cannot contribute to individual retirement accounts or IRAs, but a non-working spouse can fund their IRA with their spouse’s income. This means that non-working individuals can also save up for their retirement. Another advantage that married couples are privy to when filing joint tax returns is that the limit for IRAs is not double those of single filers, which makes it easier for them to qualify for tax deductions.
In Conclusion
The financial benefits discussed above cannot be the only reason you decide to get married, but they can certainly sweeten the deal. Consider things like love, intimacy, communication, compatibility, and trust before deciding to spend your life with someone. Not only will this ensure you live a happy life, but these are also qualities that indicate that your partner will complement you financially.
Money isn’t everything, but it can certainly make life easier to live. However, there is no denying that money is one of the biggest causes of problems between couples. Hence, you and your future spouse must discuss financial matters before walking the aisle and throughout your marriage as well.
If you manage to harbor a healthy and respectful relationship in all aspects of life, including money matters – you’re set for life!
