Your life is in good shape. Finances are under control. You enjoy your friends, children and grandchildren…you live in a nice place and things seem settled. Being widowed or divorced was never your long-term plan, but, here it is, and life is not bad.
Then it happens…
The person who has been your significant other or plus 1 for years decides it’s time to tie the knot. Or, you meet someone, and it’s love at first sight.
Should you marry? Absolutely NOT—that is, if money matters to you.
Here are the top 7 financial downsides of later-life marriage:
- Taxes on your Social Security income will probably go up. Social Security taxation is based on provisional income—this includes tax-free income, adjusted gross income and benefits. If you are single and these exceed $25,000, your Social Security gets taxed at a graduated amount. But if you are married, the combined amount before tax exposure is only $32,000.
- Your income taxes will probably go up. They call it the marriage penalty. Double income with a joint filing can push up your brackets. If you itemize, you need to reach higher thresholds. Check with your accountant—there could be even more damage done.
- You will lose alimony, pension and Social Security death benefits from a former marriage. Most streams of spousal income, whether under divorce agreements, court orders or corporate pensions, will usually terminate upon remarriage. Check your particular case.
- You could lose worker’s compensation. Similar to the above, if your former spouse was collecting worker’s comp and there is a residual death benefit, remarriage might cancel the obligation—you need to check.
- You will be exposed to the debts of your new spouse. Yes, a good prenuptial agreement can keep you safe to an extent. But, creditors may try to go after you if your new love turns out to be a bit of a deadbeat and defaults. A spouse’s bad credit may also hurt your credit if you are not very careful to keep things separate.
- If there is a long-term illness and you or your spouse could have been eligible for Medicaid, the other’s wealth can cause ineligibility. (Whereas, even if you are living with a multimillionaire, so long as you are not married, his or her assets will not be counted to determine your eligibility.)
- Your estate plan will go to hell unless you get a good estate attorney and pay to make sure it doesn’t. You had better work out every detail of the estate including gifts, asset division, insurance proceeds, housing and more if you want your children to one day look back and be glad they attended your wedding.
And this doesn’t even consider working out how you will title joint and individual assets and checking accounts and how you will spend and invest money as a couple.
Yes, you are in love. But, do you both have the same spending habits?
A good while back, I wrote a book, Financial Planning for Couples, to help folks work out good ways to manage money together and divide financial tasks. I should probably update that book, because none of it has gotten any easier. In every one of us, money habits have been developed over a lifetime…it may be easier and less disruptive to let someone new into your life than into your bank account.
It’s no wonder that the Pew Research Center found that cohabitation among people over 50 has increased 75% since 2007, faster than in younger age groups. We want companionship…and there’s really no compelling reason to change our financial lives to get it.
OK, so even after all that, you still want to get married. Let’s think about why.
- For financial benefit: I have a client who has a terrific relationship with a man who wants to marry her. He suggested that she do so “to get his pension.” It’s a lot of money, and it will disappear on his death unless he opts for a joint and survivor benefit. He has no heirs, so his employee benefit life insurance will also be wasted. It’s true—some late-life marriages can have financial rewards.
- For social benefit: For some people, it’s more comfortable to say (or to hear) “my husband” or “my wife” than “my boyfriend/girlfriend” or “my significant other.” There still can be a properness issue even in our open society.
- For security: Even with divorce easily available, being married is a bigger commitment than not being married, and it can help bind a relationship. It is ultimately harder to walk away.
- For religious reasons: It’s such a personal matter; but, it can be the catalyst to late-life marriage.
- For health care arrangements: As a former trust and estate attorney, I have witnessed older clients in need of health care marry to get it. And they got it—their spouses attended to them diligently.
- For a younger lover: If the urge is still with you and getting married helps seal the deal, go for it. Just sign an ironclad pre-nuptial agreement.
- For true love: I was a young intern for the philanthropist and accomplished attorney James Marshall. He got married at age 78 and said these charming words: “I am getting married, Adriane. And I have the audacity to believe it will be a long and happy one.” It was. He passed away at age 90 after 12 years of marriage.
As for me, I married at age 23. My reasons were somewhat unusual.
My mother was widowed since age 40. I lived with her and my Aunt Rose, who never married. In those days, my aunt was referred to as a spinster. This was not a compliment. I saw loneliness that was hard to bear.
When my aunt was dying, I wanted her to know that I was married to help bring her peace. Besides, I was a wild child. If it didn’t work out, I could always divorce.
I think you would be hard-pressed to find a worse reason to marry.
But, I did it. Morph 46 years from then, to August 2018. It is the anniversary of my marriage to the love of my life. Yes, the very same guy I dragged to the altar in 1972.
On my anniversary, I went to a show with my friend (my husband didn’t mind), then my husband, my daughter and I ate out to celebrate our anniversary (he didn’t mind that either), and then he and I went off on an Arctic cruise where we were dragged up glaciers by dogs attached to our belts (more dragging, but he still didn’t mind).
That’s called a life together and maybe it started on a weird footing. But, right things don’t always have to begin for right reasons.
Oh all right, forget being reasonable. Reread my cautions above…but if you want to get married, just get married.