Better Together: A Financial Take on Marriage
Fresh off the high of Valentine’s Day and with the wedding season of Spring and Summer right around the corner, it’s safe to say that love is in the air. I recently spent some time flipping through old photos and reminiscing on lovely moments during my now 10+ year marriage with a smile. Holy matrimony is surely a marathon and not a sprint, complete with hurdles, pitfalls, and bruises, but we can’t forget the laughter, the joy, and the Deion Sanders style victory celebrations after overcoming challenging obstacles. I will always be one to promote the sanctity and importance of marriage in all aspects of life but I think it’s time to better highlight the financial benefits of marriage.
With the rate of divorce in the United States being well over 50%, some people do not see the reason to get married anymore. I have heard everything from “marriage is just a piece of paper” to “marriage is just a way for someone to steal your money.” I will be honest and say that marriage is more about commitment than it is about infatuation. Leaving the toilet seat up, excessive facial hair in the sink, and other adverse bathroom habits quickly reduce even the idea of infatuation, so if it is made the foundation of a marriage, you can be sure it will quickly fail. But if a marriage’s foundation is commitment, then you can be sure that your partner doesn’t intend to hurt your feelings when they inevitably do; you can be sure that you have someone to help you up when you fall and you have warmth when you lie down.
Let’s not forget that financial commitments exist within marriage as well. The vow of “in sickness and in health” reminds me of the insurance benefits that a lot of married people share. Health insurance, vision insurance, and dental insurance have spousal options in order to make sure that special someone in your life has essential coverage. There are unfortunately no coverage options for friends whether they live with you or not. How many people leave any death benefits to their unmarried partners? I’m sure it happens, but I’m also sure it’s not very often. It’s also important to note that if someone dies without a will and no beneficiaries, an unmarried partner will not receive any inheritance. Death benefits will go to the next living family member, even if it’s one that they did not like or even know.
I would be remiss if I did not mention tax benefits while we still have a month left in the season. Married filing jointly is undisputedly the best filing status to have when preparing your taxes. Most single deduction limits are essentially doubled. For example, according to IRS Publication 523, “If you meet certain conditions, you may exclude the first $250,000 of gain from the sale of your home from your income and avoid paying taxes on it. The exclusion is increased to $500,000 for a married couple filing jointly.” And what about the benefits of having a second income? When you can live off of one income and invest with the other? Or when you can reach your financial goals faster because you are not working on them by yourself? I’ll take Marriage for $2000 Alex (may he rest in peace).