It goes without saying that the decision to get married should not be based solely on financial gain—unless of course, as with some couples, it’s your reason for getting married in the first place. Simply consolidating your homes under one roof, by living together without tying the knot, can offer indisputable savings. Sharing one rent, one cable bill, one heating expense, and the like certainly allows both individuals to save a lot of money. And while there are financial pros and cons depending on whether you marry or live together, married couples have additional financial benefits not available to those have haven’t said “I do”.
Being married allows you the option of participating in your spouse’s health insurance plan. In most cases, this means a significant financial savings, even more so when children are part of the equation. And although more and more companies are beginning to offer family plans to unmarried couples who live under the same roof, you’ll need to be able to prove you are a committed couple and have entered into a true domestic partnership, and this can sometimes be difficult to do. Quite often, too, a person will keep from taking an otherwise more lucrative job, solely because it doesn’t come with health insurance. So having a spouse’s benefits to rely on can open the door to new, and possibly more lucrative, ventures.
The emotional turmoil when a lifelong partner dies is bad enough. But if you two are not married, unless your partner specifically declares so in his last will and testament, under the current legal structure of most states, you’ll get nothing. Even worse, you could lose what is (or was intended to be) yours. For example, let’s say you moved into a home already owned by your partner, and started contributing toward its upkeep and maintenance. Maybe you even started paying half the mortgage, or covered other expenses in the home. Arguably, you are entitled to at least something in return, right? Well, don’t count on it. Even with a will, this is open to legal challenges. His family may adore you now, but greed is a powerful emotion; and when money is at stake, quite often the gloves come off. Marriage offers far greater legal protection to either spouse in the event of the other’s death.
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Only a legally married spouse is entitled to the Social Security survivor benefit. In addition, according to federal law (the Employee Retirement Income Security Act of 1974), as a spouse, you’d automatically be designated as the beneficiary of your husband’s 401(k) plan. To designate someone else would require your written permission. In other words, a wife is fairly well protected when it comes to planning for retirement. If you’re unmarried, there are no guarantees.
When it comes to the Internal Revenue Service, it seems as though married couples fare better than unmarried couples as well. Those who can claim “married filing jointly” status, in most cases, seem to give up less of their earnings to the tax man than do those who must file as single individuals. In addition, the IRS allows married individuals, who have no earned income themselves, an opportunity to contribute to an individual retirement account based upon his or her spouse’s earnings. There are no such benefits afforded to domestic partners.
THE LITTLE EXTRAS
In addition, there are those little perks that married people get. In many cases, though, the benefits aren’t so little at all. For example, either through classification or because of consolidation, married drivers can score significant discounts on their automobile insurance. If you are married to an individual who earns a higher income than you, or has a more stable history of employment, you may be able to use that to your advantage when applying for credit. Many establishments, such as museums, zoos, conservatories, and membership clubs offer family plans, too.
Of course, there are potential benefits to remaining single as well. For example, if the marriage doesn’t last, the financial cost of divorce can be enormous, especially if you’ve entered the marriage with a healthier net worth than your partner. In addition, recipients of spousal support may have a tough time justifying getting remarried, financial speaking. And some of the financial gains achieved only through marriage may not hold true in community property states.
Simply put, living together offers some of the financial gains also available to couples who marry and commit to staying together “for richer or for poorer,” but not all of them.