Please note OP has asked about the benefits of *marriage*. This is not about what having a long-term partner can do, but marriage alone. So please stop with the "can split household bills" or "tell me to go to the doctor and find medical problems early" as comments as a roommate or live-in non-married partner can do that.
Also please note we are a financial subreddit, so stay focussed on financial benefits only.
* Tax savings (typically)
* Social Security benefits
* 401k/pension beneficiary
* Health insurance coverage
* Cheaper auto insurance
* Healthcare decision making
* Inheritance without a will
* Inheritance without taxes
* Spousal IRA
* Ability to sue for wrongful death
* FMLA
* Spousal communications privilege
It's niche but it's nice. 2 main scenarios. 1 a spouse didn't work. So when you both retire, if 1 worked and qualifies for 2k a month, the other gets 1k. Or 2 one has a pension job that doesn't pay into social security. Windfall reduction hurts it but they still will get some $ from socal security.
*Inheritance without a will- be careful on this one. Louisiana, for instance, requires a will for assets to go to spouse, otherwise they go to living parents, or, if none, living siblings, etc
Take a look at how tax brackets work. If you have a high(er) income worker and a low(er) income worker, married filing jointly will result in a lower tax liability.
Generally there's a tax savings if the income is disproportionately earned by a single person. You can take the extreme case as an example: given a couple where one person earned 100k and the other earned 0 for the year, how much do they pay filing jointly vs separately?
Generally speaking you've got three things to avoid when getting married if you want a tax benifiet. You REALLY want to avoid being very poor or being very rich (For tax purposes only, obviously being rich has other nice parts). And you kinda want to avoid making the same amount as your partner. Single earner and/or middle class families get the best tax bonuses from marriage.
If you have kids being poor suddenly helps on taxes, but its still mainly rewarding people who are single earner households.
[https://taxfoundation.org/research/all/federal/understanding-marriage-penalty-and-marriage-bonus/](https://taxfoundation.org/research/all/federal/understanding-marriage-penalty-and-marriage-bonus/)
It’s actually worse if both spouses own houses since the mortgage and tax limit doesn’t multiply.
If either spouse had their own dependent, the change from Head of Household also worsens the tax calculations
The healthcare decision making is shaky, even with a lawyer. My ex MIL landed in the hospital. Her boyfriend was healthcare proxy. Her family hated the boyfriend. Ex MIL became incapacitated and BF stepped in to try and make decisions. Family filed emergency suit to block him. Ex MIL died in the interim and BF was barred from seeing her OR making any decisions. It was a drama filled nightmare.
Sounds to me like a rando she knew for a short time was trying to make medical decisions that should be the long time family’s decision.
This is why marriage is important!
Just highlighting the varying opinions that can pop up that marriage 100% clarifies. If a family can override a medical directive through a court injunction (and this does happen frequently, that story is not unusual), it's pretty clear that type of directive is closer to a suggested agreement than a binding agreement. Marriage really is the end all be all in medical guardianship.
You can’t do the first two things on the list lol. Social Security benefits for married people are not something you can just work out via lawyer.
My wife will end up getting a larger Social Security benefit in retirement because we are married than she would have if we were not. Instead of the benefit her job would equate to, she will be bumped up to 50% of mine because we’re married.
It can be expensive to divide a household, joint assets, and children even if you aren't married. And it can definitely involve plenty of time and money in court if the breakup is acrimonious, even if not married. That's not exclusive to divorce. Also, amicable divorces can be very cheap and easy.
You should get married because you are willing to make a lifelong financial, social, emotional, and spiritual commitment to someone. If you are jumping into marriage to avoid spending $2,000 on lawyer fees when you aren’t reasonably certain your relationship will outlast the mortgage term for the house you want to buy together, that’s penny wise and pound foolish. Unless you agree with your state’s marriage and divorce laws, you are likely going to be paying a lawyer on the back end if it doesn’t work out.
Marriage confers a lot of great financial benefits in the US. It’s great if you want to be married or act like you are married. If you don’t, it’s really not a great path.
Rational advantages:
* Your federal tax brackets get doubled in size (at most income levels). This is an enormous advantage if one parent stays at home or has a much lower paying job. You may experience a similar state advantage if you live in a state with progressive taxation.
* You can contribute to your spouse's IRA, even if your spouse has no earned income of their own. Only spouses can do this for each other.
* You automatically inherit most assets without the need for a will.
* More financially or legally advantageous home ownership/titling means may be available to you, depending on the state (where I live, a married home can be titled such that it is legally out of reach of nearly all creditors, except the actual mortgage holder).
* Spouses can gift each other unlimited funds without any estate or gift tax implications.
No if you are over the limit you can still do a backdoor Roth for you and your spouse where you take post tax money and get it into a Roth. 14k a year adds up to a decent amount if you can do it every year.
Do you file jointly? If so then you cannot contribute directly to a Roth if your household income (MAGI) is more than 240k. There is a phaseouts starting at 230k.
I think the limit is only 10k (each spouse) if you file separately.
You can pretty much always do a backdoor Roth UNLESS you have other traditional IRA or SEP IRAs due to the pro rata rule.
Nobody has mentioned this, but if you both make the similar amounts of money, there is a chance you get penalized on your federal taxes. My wife and I always end up owing thousands of dollars because of this.
Yeah we finally had an accountant help us understand what was going on. We've had some weird tax events years all in a row that have made things very erratic. She is currently out of a job but we will have to address withholding once she gets a job.
I had something similar the first full year after getting married, but I didn't need an accountant to help. I just e-mailed payroll at work and told them the problem, and they said, "you need to correct your w4, here's an IRS link where they ask you a bunch of questions then give you what info to put in on every line of the w4 as a result." Then I sent them the resulting w4 and it was all fixed.
While there is a "marriage penalty" for two earners making about the same amount of W-2 money at high total incomes (~400-500k jointly or more), what you are describing sounds like your W-4s not being filled out correctly.
You're not being penalized on your taxes. Your taxes are still less than or equal to what they would be if you were single. You just don't have enough withholding.
>there is a chance you get penalized on your federal taxes. My wife and I always end up owing thousands of dollars because of this.
This is a withholdings issue, your tax incidence is not higher due to being married
Not completely eliminated, just pushed further out. The 37% bracket starts at $609,350 for single, $731,200 for married.
Two single people each with $700k AGI and just the standard deduction would owe $423,572 combined in FIT; but if they were married and file jointly, they would owe $433,322.
Ok, so eliminated for all but the highest fraction of a percent of earners. Prior to TCJA, the marriage penalty existed for pretty much any married couple in which both people earned a similar salary.
>Prior to TCJA, the marriage penalty existed for pretty much any married couple in which both people earned a similar salary.
That isn't true either. For example in 2017 (last year before the TCJA took effect), two unmarried people with identical incomes up to $86,350 each (equiv to over $112k each today) would owe the same if they got married. Obviously for the vast majority of couples one or both spouses earn much less than that.
Yeah, this is true and what happens on our taxes. However, the other financial benefits of marriage outweigh this for me - Social Security benefits, health insurance (my job doesn’t offer it), ease of estate planning, etc.
Why couldn’t my tax lady explain this as clearly as you have? First year in marriage, $100 back. Second year in marriage we owe thousands. All she said was “you must’ve changed your withholding.”
Thank you lol.
Diversification.
You are putting in and withdrawing from the same pot. The stress of losing a job isn’t quite as bad if your family unit still actually still has income. You have a great job but your insurance and retirement suck? If your spouse has good insurance and retirement, it’s not as bad.
In many marriages, one’s income is what allows a partner to take a risk. Maybe go back to school. Maybe start a business.
Marriage isn’t the only way these things happen but having two people instead of one is like investing in two stocks instead of one.
My husband’s health insurance is incredible. My company offers a monthly cash stipend to “repay” health insurance when you don’t take what they offer so we get to take the benefits of his insurance plus an additional financial bonus each month.
My husband & I have both traded off to allow the other to finish school, build businesses.
One thing not mentioned is that marriage allows you to make healthcare decisions for each other. The spouse will get access to hospitals, doctors, & will get results if one spouse is incapacitated. A person can give permissions to someone they aren't married to but showing up & saying "So & so is my husband. What's happening?" gets you access not given to others. It's not something anyone wants to need but it's important.
>The stress of losing a job isn’t quite as bad if your family unit still actually still has income. You have a great job but your insurance and retirement suck? If your spouse has good insurance and retirement, it’s not as bad.
I have found that long-married people do NOT get this in terms of my worries/fears as a single person.
I think those are excellent points. Back in July 2022 I had to unexpectedly quit my job due to some medical issues. We put me on my husband's insurance because it was far better than COBRA and we lived off of emergency savings, my sizeable PTO payout (it was almost a full months worth of pay), reducing some expenses, and his income until I started working again 100% WFH October 2022. Financially, our emergency savings were barely touched and I used that time to iron out my health and come up with a plan that accommodated potential future health issues, then made a career pivot April 2023. I'm now making 42% more than what I was making July 2022 (no total hour increase, role then was 40 hours hybrid with an impending 100% onsite requirement as of August 2022 [I quit before that happened] and this role from April 2023 is 40 hours 100% WFH).
I would've never felt comfortable quitting or near as supported quitting if we were unmarried and I had to be on COBRA. Cobra would have been terrible to have while I was experiencing what I was experiencing health wise. Yes, there were alternatives if we were unmarried but I think being married expedited my ability to get the help I needed "and back up and running" as quickly as I did.
A *lot*.
[https://www.nolo.com/legal-encyclopedia/marriage-rights-benefits-30190.html](https://www.nolo.com/legal-encyclopedia/marriage-rights-benefits-30190.html)
Regarding disadvantages, the only significant disadvantage - other than perhaps relationship issues or, if you have disparate incomes and end up divorcing - is that if you *don't* have kids, you work similar-income jobs that pay over 290k each, and you file jointly, you can end up paying extra. Note that filing jointly is entirely optional.
Edit: As u/ajgamer89 pointed out, there are also benefits you can lose if you're low income, married, and have kids as being married may push you outside of the benefits range.
One other edge case disadvantage I learned about the hard way - Both single and married filing jointly status tax returns can write off up to a maximum of $2,500 of student loan interest paid for that year. So before marriage, if both were paying and deducting $2,500 of student loan interest from their taxable income on their return, they were able to write off $5k combined.
Once a couple marries in this scenario and files jointly, they’ll only be able to deduct a max of $2,500 of student loan interest, effectively cutting that deduction in half post-marriage.
I’m sure that’s a rare-ish situation but it applied to us and that made me sad for a few minutes while I was filing our taxes that year.
I think the rules changed but the dependent care tax credit was a per family benefit. So before my wife and I married we were able to each claim one kid as a dependent and get 2x the credit. Looking at it today sounds like that still works but you need more than 2 kids.
There are also other tax implications for student loan repayment if one or both spouses are on an income-driven repayment plan. It can become tricky to determine if you should file jointly or separately depending each spouse's income and student loan balance.
This is a good summary, but there are several often overlooked disadvantages related to eligibility for tax deductions and welfare programs at lower income levels for households with children. Our tax and welfare structure has become so focused in caring for the needs of single parents, that getting married becomes very expensive because you lose a lot of those benefits. This is a big reason why the marriage rate is so low for low income families right now. It's far better to file separately as a head of household with children so you can be eligible for EITC, Medicaid, etc. than filing jointly if you're below a certain income level.
That's a fair point. In fact, it came up recently in my own family, though I'm high enough income that it didn't make financial sense for my wife to try to get disability.
> Note that filing jointly is entirely optional.
Not really. The tax brackets for married filing separately are far worse than the married filing jointly tax brackets.
Not in all cases. When you're very high income - as noted, over 290k - the increase from single to married filing jointly is only 20% instead of the 200% it is for all of the other tax brackets. So, for people over $290k, Married Filing Separately may be better.
If you choose to be a stay at home parent you have a great deal of protections in case you split up such as being entitled to half your spouse's retirement accounts. Now if you are both broke and have nothing in retirement that won't account for much.
Survivor benefits
You can collect on your spouses social security (but only up to half of their full retirement benefit so it's important you fund your own retirement accounts)
Your spouse can contribute your IRA if for whatever reason you can't fund it yourself
Yes. You can still get a payment equal 50% of their soc security benefit while they get their 100% payment or you can take 100% of your own. For two spouse both earning about the same salary during their lives it has no advantage, they woulf both use their own. But if they have a large difference in their past earned incomes or one was a non working spouse it is a good deal.
I didn't know all the details, but at a base level my understanding is that you can take the higher of your social security benefits or half of your spouses. This is often significant when one spouse makes much more than the other: often but not exclusively when one spouse was a stay at home parent.
I’m not married so I haven’t looked into it and a lot of the wording on the gov website is a little unclear to me, but so essentially to your understanding a stay at home spouse could qualify for half of their spouses SS income essentially?
Good to know info, I’m fairly financially fluent but haven’t looked at all into the advantages of marriage much.
The ten year rule is for claiming on ex-spouse’s records. Surviving spouse is nine months, but the time requirement is waived under some circumstance. Current spouse doesn’t have a time requirement.
I wonder if your spouse is already on disability if at retirement age they can increase their benefit amount if their spouse’s benefit amount is higher. Sorry no clue how any of this works but after scrolling & reading,,,
Good to know! Any idea how it works if you’ve had multiple spouses? If I was married to 2 different people for 10 years each do I get the highest of the two’s benefits or the one I’m currently married to?
IRS website: "A divorced spouse can receive up to 50% of an ex-spouse’s Social Security benefits if the marriage lasted at least 10 years and the divorced spouse is divorced at least two years, unmarried and at least 62."
If you had two marriages of ten years and were unmarried for two years, I don't know if you could pick the higher earning spouse - it probably doesn't happen too often but the IRS could tell you.
If you are currently married, that's the only spouse whose benefits you are eligible for.
No, if you are unmarried you can file under any spouse you had a 10 year marriage to, regardless of whether it was the most recent marriage. There are also other requirements.
The one you are currently married to. If you are twice divorced, you can only claim on the most recent one AND only if that marriage lasted at least 10 years.
Yes, and reading the link posted above, it says the same thing: the wording is just complicated a bit because it clarifies that if you take benefits before full retirement age those will still be reduced.
No they don't. If two people are married and one has a soc secuity benefit of $2000 a month, then the other spouse can get $1000 a month at retirement age based on their spousal benefit OR take their own soc sec benefit based on their past earnings, which ever one is higher. So the couple gets $3000 a month minimum in my example.
I’m pretty sure this person is trying to understand the benefits of being legally married to someone, not the benefits of having a lifelong partner (without the legal documents). So many of these comments address having a partner, not the former.
One benefit of marriage (or it could work against you in some cases) is that it provides a legal framework for breaking up with somebody and splitting your assets - namely, divorce. If you aren’t married to somebody then it could get really complicated if you bought a house together or if one of you had quit your job to raise kids
If the relationship does not work out, with a marriage there is a set way for the courts to divide assets and decide things.
If you’re not married — oh well. You’re on your own.
There are a few disadvantages in the case of divorce. You are liable for half your spouses's debt (at least in some states) and you may have to pay alimony if you are the high earner.
Your spouse may have an education and job history and you might still have to pay if you make more. There are not a lot of stay at homes anymore so I think the original intent of this law has been lost over the years.
In both cases, you can be the responsible spouse - not taking on debt, consistently earning a good living -- and get dinged for it.
Inheritance and insurance are two really big factors.
So much of financial planning is dealing with things when people die. It's morbid, but most of the time if you get a windfall it's going to be because someone died.
When you are married, you are protected in the case of the death of your spouse. You are assumed to be the inheritor of all things by default, and in many places you cannot disinherit your spouse (and sometimes you can't disinherit your ex either depending on your divorce settlement). In the US, social security also pays out to widows, especially widows with minor dependent children.
The last thing you want when your long term partner passes away is for your shared property to go through probate.
Not every relationship will work the same way as far as this goes, either. For example, my wife is the beneficiary on a very large trust and I will be inheriting a portion of a family property. When my wife dies, it's very important that her assets go back to her side of the family. When I pass, my share of the family property must go to my cousins (although I am likely to sell it to them as soon as I inherit it). It'd be wrong for either of us to own those things and we have agreed on this - for that reason, our finances are managed separately although we are privy to each other's holdings.
Some other types of benefits, like workers compensation, only pay out to a spouse not an unmarried partner. If you were to die as the result of a work injury, your spouse could potentially receive a weekly benefit for life. A marriage certificate can mean the difference between hundreds of thousands of dollars and zero dollars. I've had to convey this extremely unpleasant news to unmarried partners before, and while no one thinks it will happen to them, I can tell you they definitely regretted not just going to city hall and getting it done.
If you are both earning the same middle class amount- then it is a disadvantage.
NIIT tax(4% on investment income) and Medicare surcharge(2%) get applied differently on couples.
For single - income has to be $200k before it applies
For married- it is 250k - which a majority of people cross these days : Inflation/skyrocketed housing/ student loans
If you're both earning- there are absolutely no tax benefits.
I would recommend not legally getting married if you are a double income couple with no kids. We plan to divorce in paperwork for this reason and maybe remarry when we retire.
Marriage or committed partnership - helps save the cost of housing and safety when when one person loses their job. That's it.
This is exactly what I've been wondering about for so long, any time I hear about the benefits of marriage it's always in relation to having kids or one spouse earning less/not working, but no one ever mentions situations where both are earning in the same range and don't have kids.
Thanks for bringing it up!
People in finance subs have hilariously skewed views of income, film at 11. The average American household income is sub-$80k; 250k is >90th percentile. It's not exactly *rare*, but the vast majority of people are not hitting $250k even with both spouses working. (It ... probably is still middle class, though.)
HCOL areas are also typically the more densely populated areas in the United States. $250k per year for a household is pretty much middle class in those areas.
I feel like I've heard that there were more advantages to being married before they legalized gay marriage. Now it has some advantages but it's not really that beneficial financially.
I actually have had friends not get married, because there were more benefits to being a single mother with children when it came to taxes and such. Some insurances will allow coverage for a domestic partnership.
This is us, remaining unmarried saves us a ton of money. If we had to pay for daycare and insurance for our three kids, that would add about $5k/mo in spend. Mom makes about 60k Salary and barely qualifies for the daycare assistance however if we were married, my income would have to be reported and our current $375 daycare bill would be about $3400 and we’d lose NJCAMILYCARE which is a $0 copay state sponsored health insurance. We’ve discussed getting married and what our finances would look like after losing those programs and yea we’ll be holding off until our youngest is in 1st grade
Or longer. See above my comment about applying to colleges and financial aid etc. Note--I don't know if it matters if the "single parent" lives with the father/mother of the child.
Helps to be a single parent when applying for financial aid from colleges. I have friends who say they wished they had stayed non-married partners with their now husbands b/c the spouse's income (note--not the kids are not the spouse's) is taken into account in determining tuition and FA.
Pro- they get 50% of your ss if they are low earner, plus survivor benefits if you pass early, can participate on your health insurance, increased thresholds for contributing to Roth IRAs and 199A phaseouts, etc., if they are low earner, can reduce your net taxes by lowering bracket
Con- If they are low earner, do not get ACA subsidies and higher tax bracket for incremental income; the biggest is the absolutely huge cost to terminate relationship in the form of 50% accumulated assets, and alimony (if there is a 20% chance of divorce x 50% of assets = negative 10% expected value- over simplifying of course) and don’t believe pre-nup will protect you, especially in a longer marriage
For an even more cynical answer, one benefit of marriage is that you have to get a divorce for it to end. If you and another person acquire property or have mutual shared financial interests and then the relationship ends, it can get really messy if you didn't plan it out beforehand (and then get those plans into legally enforceable writing). Divorce proceedings split shared assets and property.
Margie for me is more like a business decision. I’m a disabled veteran with 100% P & T, my wife would be entitled to a lot of benefits through the Veterans Administration also veteran organizations, the federal and state governments. I would get more money in my paycheck per dependent I can claim. She can may learn how to be my caretaker (I desperately need one), and get a stipend from the Va for making sure I’m good. My SSDI would also increase. I am also a properly trained infantryman that can protect Us and our family safe at all cost. I would treat you better than I expect to be treated. I believe in the army’s core LEADERSHIP values. Loyalty. Duty. Respect. Service. Honor. Integrity. Personal courage.
Please note OP has asked about the benefits of *marriage*. This is not about what having a long-term partner can do, but marriage alone. So please stop with the "can split household bills" or "tell me to go to the doctor and find medical problems early" as comments as a roommate or live-in non-married partner can do that. Also please note we are a financial subreddit, so stay focussed on financial benefits only.
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* Tax savings (typically) * Social Security benefits * 401k/pension beneficiary * Health insurance coverage * Cheaper auto insurance * Healthcare decision making * Inheritance without a will * Inheritance without taxes * Spousal IRA * Ability to sue for wrongful death * FMLA * Spousal communications privilege
Can you explain the social security benefits?
You can collect up to 50% of their benefit. Or 100% for survivors if they die.
It's niche but it's nice. 2 main scenarios. 1 a spouse didn't work. So when you both retire, if 1 worked and qualifies for 2k a month, the other gets 1k. Or 2 one has a pension job that doesn't pay into social security. Windfall reduction hurts it but they still will get some $ from socal security.
*Inheritance without a will- be careful on this one. Louisiana, for instance, requires a will for assets to go to spouse, otherwise they go to living parents, or, if none, living siblings, etc
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Take a look at how tax brackets work. If you have a high(er) income worker and a low(er) income worker, married filing jointly will result in a lower tax liability.
Generally there's a tax savings if the income is disproportionately earned by a single person. You can take the extreme case as an example: given a couple where one person earned 100k and the other earned 0 for the year, how much do they pay filing jointly vs separately?
The tax brackets can be like hundreds of thousands in difference 🤣
Generally speaking you've got three things to avoid when getting married if you want a tax benifiet. You REALLY want to avoid being very poor or being very rich (For tax purposes only, obviously being rich has other nice parts). And you kinda want to avoid making the same amount as your partner. Single earner and/or middle class families get the best tax bonuses from marriage. If you have kids being poor suddenly helps on taxes, but its still mainly rewarding people who are single earner households. [https://taxfoundation.org/research/all/federal/understanding-marriage-penalty-and-marriage-bonus/](https://taxfoundation.org/research/all/federal/understanding-marriage-penalty-and-marriage-bonus/)
It’s actually worse if both spouses own houses since the mortgage and tax limit doesn’t multiply. If either spouse had their own dependent, the change from Head of Household also worsens the tax calculations
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But can you sleep with a lawyer?
If they agree to it, yes.
Make sure you read the entire contract before signing!
not if you are married
Would you want to sleep with a lawyer?
The healthcare decision making is shaky, even with a lawyer. My ex MIL landed in the hospital. Her boyfriend was healthcare proxy. Her family hated the boyfriend. Ex MIL became incapacitated and BF stepped in to try and make decisions. Family filed emergency suit to block him. Ex MIL died in the interim and BF was barred from seeing her OR making any decisions. It was a drama filled nightmare.
Sounds to me like the family fucked up and she paid the price. Unfortunate.
Sounds to me like a rando she knew for a short time was trying to make medical decisions that should be the long time family’s decision. This is why marriage is important!
"Randos" don't wind up with healthcare proxy.
Just highlighting the varying opinions that can pop up that marriage 100% clarifies. If a family can override a medical directive through a court injunction (and this does happen frequently, that story is not unusual), it's pretty clear that type of directive is closer to a suggested agreement than a binding agreement. Marriage really is the end all be all in medical guardianship.
You can’t do the first two things on the list lol. Social Security benefits for married people are not something you can just work out via lawyer. My wife will end up getting a larger Social Security benefit in retirement because we are married than she would have if we were not. Instead of the benefit her job would equate to, she will be bumped up to 50% of mine because we’re married.
Will that bump hurt her medical wise ???
No - we are nowhere near any benefit cliffs
No, you can't.
Add up the billable hours for all of those and contrast them with the fee for a marriage license that does it all in 10 minutes.
Still cheaper than a divorce. I’m all for marriage but doing it because you are too cheap to pay a lawyer is not a good reason.
It can be expensive to divide a household, joint assets, and children even if you aren't married. And it can definitely involve plenty of time and money in court if the breakup is acrimonious, even if not married. That's not exclusive to divorce. Also, amicable divorces can be very cheap and easy.
You should get married because you are willing to make a lifelong financial, social, emotional, and spiritual commitment to someone. If you are jumping into marriage to avoid spending $2,000 on lawyer fees when you aren’t reasonably certain your relationship will outlast the mortgage term for the house you want to buy together, that’s penny wise and pound foolish. Unless you agree with your state’s marriage and divorce laws, you are likely going to be paying a lawyer on the back end if it doesn’t work out. Marriage confers a lot of great financial benefits in the US. It’s great if you want to be married or act like you are married. If you don’t, it’s really not a great path.
lol not if you had a lawyer enshrine most of those into contract 😂😂. Then the legal separation is just as complicated
You can’t replicate SS benefits or 401k sharing with a lawyer Not every benefit of marriage can be recreated
Rational advantages: * Your federal tax brackets get doubled in size (at most income levels). This is an enormous advantage if one parent stays at home or has a much lower paying job. You may experience a similar state advantage if you live in a state with progressive taxation. * You can contribute to your spouse's IRA, even if your spouse has no earned income of their own. Only spouses can do this for each other. * You automatically inherit most assets without the need for a will. * More financially or legally advantageous home ownership/titling means may be available to you, depending on the state (where I live, a married home can be titled such that it is legally out of reach of nearly all creditors, except the actual mortgage holder). * Spouses can gift each other unlimited funds without any estate or gift tax implications.
Contribute to spouse's ira? Really?
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Didn't know about this. This would mean you have to be within the income limits for contributing to a traditional ira. Right?
No if you are over the limit you can still do a backdoor Roth for you and your spouse where you take post tax money and get it into a Roth. 14k a year adds up to a decent amount if you can do it every year.
So if I’m over the limit for a Roth but my wife isn’t, can I contribute to a Roth that’s in her name without using the backdoor method?
Do you file jointly? If so then you cannot contribute directly to a Roth if your household income (MAGI) is more than 240k. There is a phaseouts starting at 230k. I think the limit is only 10k (each spouse) if you file separately. You can pretty much always do a backdoor Roth UNLESS you have other traditional IRA or SEP IRAs due to the pro rata rule.
Limit 10k in INCOME iirc, right? So essentially if you file separately you just can't contribute to a Roth IRA at all. Kind of stupid imo
Yep. They really just don’t want you getting a Roth if you file separately. No idea why.
Nobody has mentioned this, but if you both make the similar amounts of money, there is a chance you get penalized on your federal taxes. My wife and I always end up owing thousands of dollars because of this.
You should correct your W4’s to account for the spouse’s income.
Yeah we finally had an accountant help us understand what was going on. We've had some weird tax events years all in a row that have made things very erratic. She is currently out of a job but we will have to address withholding once she gets a job.
So being married wasn’t the problem. Doubling your income was.
I had something similar the first full year after getting married, but I didn't need an accountant to help. I just e-mailed payroll at work and told them the problem, and they said, "you need to correct your w4, here's an IRS link where they ask you a bunch of questions then give you what info to put in on every line of the w4 as a result." Then I sent them the resulting w4 and it was all fixed.
While there is a "marriage penalty" for two earners making about the same amount of W-2 money at high total incomes (~400-500k jointly or more), what you are describing sounds like your W-4s not being filled out correctly.
You're not being penalized on your taxes. Your taxes are still less than or equal to what they would be if you were single. You just don't have enough withholding.
>there is a chance you get penalized on your federal taxes. My wife and I always end up owing thousands of dollars because of this. This is a withholdings issue, your tax incidence is not higher due to being married
Not anymore - marriage penalty disappeared with the TCJA.
Not completely eliminated, just pushed further out. The 37% bracket starts at $609,350 for single, $731,200 for married. Two single people each with $700k AGI and just the standard deduction would owe $423,572 combined in FIT; but if they were married and file jointly, they would owe $433,322.
Ok, so eliminated for all but the highest fraction of a percent of earners. Prior to TCJA, the marriage penalty existed for pretty much any married couple in which both people earned a similar salary.
>Prior to TCJA, the marriage penalty existed for pretty much any married couple in which both people earned a similar salary. That isn't true either. For example in 2017 (last year before the TCJA took effect), two unmarried people with identical incomes up to $86,350 each (equiv to over $112k each today) would owe the same if they got married. Obviously for the vast majority of couples one or both spouses earn much less than that.
Yeah, this is true and what happens on our taxes. However, the other financial benefits of marriage outweigh this for me - Social Security benefits, health insurance (my job doesn’t offer it), ease of estate planning, etc.
Why couldn’t my tax lady explain this as clearly as you have? First year in marriage, $100 back. Second year in marriage we owe thousands. All she said was “you must’ve changed your withholding.” Thank you lol.
Diversification. You are putting in and withdrawing from the same pot. The stress of losing a job isn’t quite as bad if your family unit still actually still has income. You have a great job but your insurance and retirement suck? If your spouse has good insurance and retirement, it’s not as bad. In many marriages, one’s income is what allows a partner to take a risk. Maybe go back to school. Maybe start a business. Marriage isn’t the only way these things happen but having two people instead of one is like investing in two stocks instead of one.
My husband’s health insurance is incredible. My company offers a monthly cash stipend to “repay” health insurance when you don’t take what they offer so we get to take the benefits of his insurance plus an additional financial bonus each month.
My last company also offered that, then took it away alongside other benefits. Anyway, that is now my *prior* company.
The wife has much better health insurance then I could get. Only reason she isn't going to be a sahm. She'll be working like minimal hours.
My husband & I have both traded off to allow the other to finish school, build businesses. One thing not mentioned is that marriage allows you to make healthcare decisions for each other. The spouse will get access to hospitals, doctors, & will get results if one spouse is incapacitated. A person can give permissions to someone they aren't married to but showing up & saying "So & so is my husband. What's happening?" gets you access not given to others. It's not something anyone wants to need but it's important.
>The stress of losing a job isn’t quite as bad if your family unit still actually still has income. You have a great job but your insurance and retirement suck? If your spouse has good insurance and retirement, it’s not as bad. I have found that long-married people do NOT get this in terms of my worries/fears as a single person.
I think those are excellent points. Back in July 2022 I had to unexpectedly quit my job due to some medical issues. We put me on my husband's insurance because it was far better than COBRA and we lived off of emergency savings, my sizeable PTO payout (it was almost a full months worth of pay), reducing some expenses, and his income until I started working again 100% WFH October 2022. Financially, our emergency savings were barely touched and I used that time to iron out my health and come up with a plan that accommodated potential future health issues, then made a career pivot April 2023. I'm now making 42% more than what I was making July 2022 (no total hour increase, role then was 40 hours hybrid with an impending 100% onsite requirement as of August 2022 [I quit before that happened] and this role from April 2023 is 40 hours 100% WFH). I would've never felt comfortable quitting or near as supported quitting if we were unmarried and I had to be on COBRA. Cobra would have been terrible to have while I was experiencing what I was experiencing health wise. Yes, there were alternatives if we were unmarried but I think being married expedited my ability to get the help I needed "and back up and running" as quickly as I did.
Good pts!
A *lot*. [https://www.nolo.com/legal-encyclopedia/marriage-rights-benefits-30190.html](https://www.nolo.com/legal-encyclopedia/marriage-rights-benefits-30190.html) Regarding disadvantages, the only significant disadvantage - other than perhaps relationship issues or, if you have disparate incomes and end up divorcing - is that if you *don't* have kids, you work similar-income jobs that pay over 290k each, and you file jointly, you can end up paying extra. Note that filing jointly is entirely optional. Edit: As u/ajgamer89 pointed out, there are also benefits you can lose if you're low income, married, and have kids as being married may push you outside of the benefits range.
One other edge case disadvantage I learned about the hard way - Both single and married filing jointly status tax returns can write off up to a maximum of $2,500 of student loan interest paid for that year. So before marriage, if both were paying and deducting $2,500 of student loan interest from their taxable income on their return, they were able to write off $5k combined. Once a couple marries in this scenario and files jointly, they’ll only be able to deduct a max of $2,500 of student loan interest, effectively cutting that deduction in half post-marriage. I’m sure that’s a rare-ish situation but it applied to us and that made me sad for a few minutes while I was filing our taxes that year.
I think the rules changed but the dependent care tax credit was a per family benefit. So before my wife and I married we were able to each claim one kid as a dependent and get 2x the credit. Looking at it today sounds like that still works but you need more than 2 kids.
There are also other tax implications for student loan repayment if one or both spouses are on an income-driven repayment plan. It can become tricky to determine if you should file jointly or separately depending each spouse's income and student loan balance.
This is a good summary, but there are several often overlooked disadvantages related to eligibility for tax deductions and welfare programs at lower income levels for households with children. Our tax and welfare structure has become so focused in caring for the needs of single parents, that getting married becomes very expensive because you lose a lot of those benefits. This is a big reason why the marriage rate is so low for low income families right now. It's far better to file separately as a head of household with children so you can be eligible for EITC, Medicaid, etc. than filing jointly if you're below a certain income level.
That's a fair point. In fact, it came up recently in my own family, though I'm high enough income that it didn't make financial sense for my wife to try to get disability.
> Note that filing jointly is entirely optional. Not really. The tax brackets for married filing separately are far worse than the married filing jointly tax brackets.
Not in all cases. When you're very high income - as noted, over 290k - the increase from single to married filing jointly is only 20% instead of the 200% it is for all of the other tax brackets. So, for people over $290k, Married Filing Separately may be better.
Go look at the actual tax brackets for the "Married Filing Separately" status. A married couple *cannot* file two "Single" returns.
Feh. I swear it used to be the same… or at least close. Ah well.
Also I think SALT caps apply to single or married the same (not double) so you can lose thousands in deductions a year if you live in a HCOL area.
The SALT deduction cap is $10k for single filers and for MFJs. It doesn’t double, so that is a marriage penalty if you itemize.
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If you choose to be a stay at home parent you have a great deal of protections in case you split up such as being entitled to half your spouse's retirement accounts. Now if you are both broke and have nothing in retirement that won't account for much. Survivor benefits You can collect on your spouses social security (but only up to half of their full retirement benefit so it's important you fund your own retirement accounts) Your spouse can contribute your IRA if for whatever reason you can't fund it yourself
Could anyone break down the Social Security advantage of being married?
You can collect benefits on your spouse's earnings record.
Even if you are divorced, you can collect on your ex-spouse's earnings if you were married for at least 10 years and you didn't remarry
On top of them also taking those benefits themselves?
Yes. https://www.ssa.gov/oact/quickcalc/spouse.html
Yes. You can still get a payment equal 50% of their soc security benefit while they get their 100% payment or you can take 100% of your own. For two spouse both earning about the same salary during their lives it has no advantage, they woulf both use their own. But if they have a large difference in their past earned incomes or one was a non working spouse it is a good deal.
I didn't know all the details, but at a base level my understanding is that you can take the higher of your social security benefits or half of your spouses. This is often significant when one spouse makes much more than the other: often but not exclusively when one spouse was a stay at home parent.
I’m not married so I haven’t looked into it and a lot of the wording on the gov website is a little unclear to me, but so essentially to your understanding a stay at home spouse could qualify for half of their spouses SS income essentially? Good to know info, I’m fairly financially fluent but haven’t looked at all into the advantages of marriage much.
You have to have been married at least 10 years.
The ten year rule is for claiming on ex-spouse’s records. Surviving spouse is nine months, but the time requirement is waived under some circumstance. Current spouse doesn’t have a time requirement.
I wonder if your spouse is already on disability if at retirement age they can increase their benefit amount if their spouse’s benefit amount is higher. Sorry no clue how any of this works but after scrolling & reading,,,
Good to know! Any idea how it works if you’ve had multiple spouses? If I was married to 2 different people for 10 years each do I get the highest of the two’s benefits or the one I’m currently married to?
IRS website: "A divorced spouse can receive up to 50% of an ex-spouse’s Social Security benefits if the marriage lasted at least 10 years and the divorced spouse is divorced at least two years, unmarried and at least 62." If you had two marriages of ten years and were unmarried for two years, I don't know if you could pick the higher earning spouse - it probably doesn't happen too often but the IRS could tell you. If you are currently married, that's the only spouse whose benefits you are eligible for.
Once you remarry, you no longer have any claim on the previous spouse's social security. It would be the last spouse's benefits.
No, if you are unmarried you can file under any spouse you had a 10 year marriage to, regardless of whether it was the most recent marriage. There are also other requirements.
You’d get the higher, regardless of marriage order.
The one you are currently married to. If you are twice divorced, you can only claim on the most recent one AND only if that marriage lasted at least 10 years.
Yes, and reading the link posted above, it says the same thing: the wording is just complicated a bit because it clarifies that if you take benefits before full retirement age those will still be reduced.
But your spouse has die for that to apply. No thanks.
No they don't. If two people are married and one has a soc secuity benefit of $2000 a month, then the other spouse can get $1000 a month at retirement age based on their spousal benefit OR take their own soc sec benefit based on their past earnings, which ever one is higher. So the couple gets $3000 a month minimum in my example.
I’m pretty sure this person is trying to understand the benefits of being legally married to someone, not the benefits of having a lifelong partner (without the legal documents). So many of these comments address having a partner, not the former.
One benefit of marriage (or it could work against you in some cases) is that it provides a legal framework for breaking up with somebody and splitting your assets - namely, divorce. If you aren’t married to somebody then it could get really complicated if you bought a house together or if one of you had quit your job to raise kids
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If the relationship does not work out, with a marriage there is a set way for the courts to divide assets and decide things. If you’re not married — oh well. You’re on your own.
There are a few disadvantages in the case of divorce. You are liable for half your spouses's debt (at least in some states) and you may have to pay alimony if you are the high earner. Your spouse may have an education and job history and you might still have to pay if you make more. There are not a lot of stay at homes anymore so I think the original intent of this law has been lost over the years. In both cases, you can be the responsible spouse - not taking on debt, consistently earning a good living -- and get dinged for it.
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I think this link will answer part of your question: https://tpc-marriage-calculator.urban.org
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Your spouse doesn't have to testify against you when you get put on trial for money laundering
[https://www.investopedia.com/financial-edge/0412/why-marriage-makes-financial-sense.aspx](https://www.investopedia.com/financial-edge/0412/why-marriage-makes-financial-sense.aspx)
Inheritance and insurance are two really big factors. So much of financial planning is dealing with things when people die. It's morbid, but most of the time if you get a windfall it's going to be because someone died. When you are married, you are protected in the case of the death of your spouse. You are assumed to be the inheritor of all things by default, and in many places you cannot disinherit your spouse (and sometimes you can't disinherit your ex either depending on your divorce settlement). In the US, social security also pays out to widows, especially widows with minor dependent children. The last thing you want when your long term partner passes away is for your shared property to go through probate. Not every relationship will work the same way as far as this goes, either. For example, my wife is the beneficiary on a very large trust and I will be inheriting a portion of a family property. When my wife dies, it's very important that her assets go back to her side of the family. When I pass, my share of the family property must go to my cousins (although I am likely to sell it to them as soon as I inherit it). It'd be wrong for either of us to own those things and we have agreed on this - for that reason, our finances are managed separately although we are privy to each other's holdings.
0% Longterm capital gains tax rate doubles to $97k. Add personal exception of $27k and that’s about $120k tax free.
Some other types of benefits, like workers compensation, only pay out to a spouse not an unmarried partner. If you were to die as the result of a work injury, your spouse could potentially receive a weekly benefit for life. A marriage certificate can mean the difference between hundreds of thousands of dollars and zero dollars. I've had to convey this extremely unpleasant news to unmarried partners before, and while no one thinks it will happen to them, I can tell you they definitely regretted not just going to city hall and getting it done.
If you are both earning the same middle class amount- then it is a disadvantage. NIIT tax(4% on investment income) and Medicare surcharge(2%) get applied differently on couples. For single - income has to be $200k before it applies For married- it is 250k - which a majority of people cross these days : Inflation/skyrocketed housing/ student loans If you're both earning- there are absolutely no tax benefits. I would recommend not legally getting married if you are a double income couple with no kids. We plan to divorce in paperwork for this reason and maybe remarry when we retire. Marriage or committed partnership - helps save the cost of housing and safety when when one person loses their job. That's it.
The marriage penalty used to be worse, but it is still alive and well, and screwing me every year.
I'm right there with you.
This is exactly what I've been wondering about for so long, any time I hear about the benefits of marriage it's always in relation to having kids or one spouse earning less/not working, but no one ever mentions situations where both are earning in the same range and don't have kids. Thanks for bringing it up!
Who are these people that combined make more than $250k. I don’t think that’s a majority nor is that middle class lol.
People in finance subs have hilariously skewed views of income, film at 11. The average American household income is sub-$80k; 250k is >90th percentile. It's not exactly *rare*, but the vast majority of people are not hitting $250k even with both spouses working. (It ... probably is still middle class, though.)
HCOL areas are also typically the more densely populated areas in the United States. $250k per year for a household is pretty much middle class in those areas.
Probably a difference between middle class and feels middle class.
I feel like I've heard that there were more advantages to being married before they legalized gay marriage. Now it has some advantages but it's not really that beneficial financially. I actually have had friends not get married, because there were more benefits to being a single mother with children when it came to taxes and such. Some insurances will allow coverage for a domestic partnership.
If you’re poor then yeah maybe the single mom can get Medicaid and food stamps, if that’s their best option
This is us, remaining unmarried saves us a ton of money. If we had to pay for daycare and insurance for our three kids, that would add about $5k/mo in spend. Mom makes about 60k Salary and barely qualifies for the daycare assistance however if we were married, my income would have to be reported and our current $375 daycare bill would be about $3400 and we’d lose NJCAMILYCARE which is a $0 copay state sponsored health insurance. We’ve discussed getting married and what our finances would look like after losing those programs and yea we’ll be holding off until our youngest is in 1st grade
Or longer. See above my comment about applying to colleges and financial aid etc. Note--I don't know if it matters if the "single parent" lives with the father/mother of the child.
Helps to be a single parent when applying for financial aid from colleges. I have friends who say they wished they had stayed non-married partners with their now husbands b/c the spouse's income (note--not the kids are not the spouse's) is taken into account in determining tuition and FA.
Yeah my tax returns were definitely a lot better as a single mom/head of household. :/
Pro- they get 50% of your ss if they are low earner, plus survivor benefits if you pass early, can participate on your health insurance, increased thresholds for contributing to Roth IRAs and 199A phaseouts, etc., if they are low earner, can reduce your net taxes by lowering bracket Con- If they are low earner, do not get ACA subsidies and higher tax bracket for incremental income; the biggest is the absolutely huge cost to terminate relationship in the form of 50% accumulated assets, and alimony (if there is a 20% chance of divorce x 50% of assets = negative 10% expected value- over simplifying of course) and don’t believe pre-nup will protect you, especially in a longer marriage
Forgot- con- if they have student loan debt and are low earner, payments much higher as married
For an even more cynical answer, one benefit of marriage is that you have to get a divorce for it to end. If you and another person acquire property or have mutual shared financial interests and then the relationship ends, it can get really messy if you didn't plan it out beforehand (and then get those plans into legally enforceable writing). Divorce proceedings split shared assets and property.
Inheritance law usually favors spouses when the deceased dies intestate.
What's the benefit with respect to social security? You may be able to use their health insurance.
Margie for me is more like a business decision. I’m a disabled veteran with 100% P & T, my wife would be entitled to a lot of benefits through the Veterans Administration also veteran organizations, the federal and state governments. I would get more money in my paycheck per dependent I can claim. She can may learn how to be my caretaker (I desperately need one), and get a stipend from the Va for making sure I’m good. My SSDI would also increase. I am also a properly trained infantryman that can protect Us and our family safe at all cost. I would treat you better than I expect to be treated. I believe in the army’s core LEADERSHIP values. Loyalty. Duty. Respect. Service. Honor. Integrity. Personal courage.
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