Not tying the knot due to coronavirus? Here’s why not getting married could have severe financial ramifications
Financial experts warn that many couples could be making a big mistake by not tying the knot
It’s June and usually that means it’s wedding season. But because of the restrictions on gatherings in place due to COVID-19, thousands of couples have postponed their big days.
And they aren’t alone. The number of unmarried partners has tripled in the past two decades. Marriage rates are at the lowest they have been in 150 years. And the trend is gaining steam with Gen Z. Couples aged 24 and under are more likely to live together than be married.
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But financial experts warn that many couples could be making a big mistake by not tying the knot. According to the Human Rights Campaign, marriage delivers some 1,138 tax breaks, benefits and protections. Furthermore, a study by Ohio State University found that married couples experience a sharp increase in their level of wealth after 10 years of marriage, reporting an average net worth four times higher than before marriage. Whether you want to be part of your partner’s health care planning or simply grow you’re your bottom line, getting married is the way to go, experts say.
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Protections are especially compelling when it comes to federal taxes. Inheriting a partner’s assets at death is a tax-free event if you are married. Married partners can give financial gifts to each other, again, tax-free. Standard deductions are bigger for couples than singles. And, some tax breaks are more subtle. When you file taxes jointly, tax brackets are wider than for those filing separately. That allows you to keep more money in your pocket.
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But it goes beyond taxes. If you are married and both work for companies offering health care plans, you have options in choosing the best plan for your family. And, because of HIPAA rules requiring privacy for patients, non-married partners may have difficulty seeing their partner while being treated or getting information about their treatment or condition from health professionals.
And, when it comes time to borrow, married couples can qualify for better credit and better terms on their loans. Insurers often offer discounts to married couples.
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The benefits continue into retirement. A married retiree can opt to collect 50 percent of their spouse’s Social Security paycheck, even if their paycheck is lower.
Perhaps the greatest financial risk of getting married is the possibility of divorce. And, that can be an expensive life event, costing an average of $12,900 in attorneys’ fees and additional expenses, according to Nolo.com, an online legal resource. While costs can vary dramatically, the financial penalty is serious and can derail efforts to build wealth.
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