Marriage brings forth a range of financial considerations to discuss with your spouse, or soon-to-be spouse. For those getting married later in life (40s, 50s, 60s or beyond), the considerations to keep in mind are far more complex.
The average age of Americans getting married for the first time is the highest it has ever been at 29.5 for men and 27.4 for women.1 This has risen considerably even in just the past 50 years. More and more Americans are getting married later in life, whether it’s for the first time or following a divorce or the death of a spouse. Concerning remarriage, according to a 2014 report, 65% of previously married people, ages 55 to 64, had remarried and 50% of people, ages 65 and older, had remarried.2 The number of remarried adults has tripled since 1960: 42 million adults in the U.S. today, compared with 14 million in 1960.2
Simply put, older adults have experienced much more life than 20- or 30-somethings and thus have more to keep in mind when considering marriage. They’ve potentially had kids, acquired more assets, had previous marriages that affect their finances, and so on. If you’ve met “the one,” getting married is likely the next step the two of you want to take—yet it’s something to consider from multiple angles before making any decisions.
Meeting with your financial advisor to discuss the financial implications of marriage can be immensely helpful. Your advisor can help you sort through the pros and cons, respectfully acknowledging the emotions involved, while analyzing whether or not marriage would be financially advantageous for the two of you.
Whether it’s your first, second or third marriage, it’s important to have a serious financial discussion with your partner and ideally your financial advisor prior to the wedding date. Below is an overview of several important topics:
Retirement planning isn’t something you complete in a week or even a year. You’ve likely been contributing to some sort of retirement account since your early 20s—or maybe even earlier than that. You and your financial advisor have worked through how much you need to save to retire comfortably, how much to put away each month, and maybe even settled on a target retirement date. Marriage could present an entirely new challenge to your retirement strategy. You and your partner will need to work through retirement goals, potentially settle any differences, and devise a strategy that will work for the two of you. For those already fully retired, you’ll want to discuss how marriage could affect how you collect your income and any budgeting implications. These are certainly not insurmountable tasks—yet something that the two of you will have to thoughtfully work out.
Estate planning could prove to be a slightly trickier task, particularly with the involvement of children from previous relationships or other family members. You and your partner will have different assets and requirements in mind going into the process. It’s important to be completely transparent with everyone involved, review current/previous plans put in place (if applicable), and be clear or up front on each of your goals. If you’d prefer to leave your assets and belongings to your children from previous relationships or other family members rather than your partner or spouse, a prenuptial agreement indicating this would be a viable option to ensure your wishes are carried out. While most would agree a prenuptial agreement isn’t necessarily the most romantic gesture, it can relieve a lot of stress on delicate items should a divorce occur later on. Your advisor can help facilitate the creation or update of your estate plan with the help of other prevalent third-party professionals.
Whether you’re approaching retirement age or far past it, long-term care preparations and health insurance are two topics to be sure to consider with your partner. In many states, spouses are required to be responsible for each other’s medical and long-term health care bills. Discuss with your partner what sorts of long-term care preparations you both have taken, if any, including long-term care insurance, life insurance, or another savings option. Another important consideration is whether one of you would qualify for public benefits, such as Medicaid, if you stayed unmarried. Medicaid may not be the most reliable option to pay for extended care, yet it could still be a helpful option and would relieve your partner of being legally obligated to cover your medical bills should the time come.
On health insurance, discuss with each other the options each of you currently have and your outlook on what you’ll likely rely on in the future. This will differ greatly depending on each of your occupations, particularly if one or both of you rely on a subsidized health care plan, Medicare, etc. You’ll want to seriously weigh your options and come up with a game plan, especially if you are both still working and receive health insurance through your employers.
Of course, you’ll also want to consider other aspects of each other’s financial picture—outstanding debt, credit history, divorce agreements (if applicable) and so on. Have an open discussion on each of your financial histories and any financial obligations you both have, including family members or individuals that rely on you, such as if you pay for your child’s college, a parent’s elder care, alimony, etc. It’s important to understand the entire financial picture of the person you’re considering spending the rest of your life with.
There is considerably more to discuss with your partner than mentioned above. Depending on both of your specific financial situations, you’ll have other topics to discuss, including tax considerations, the effects on social security, and so on. Again, having an open and honest discussion with your partner and financial advisor prior to getting married can prove to be immensely insightful and help you work out how marriage would affect you both financially.
Written by North Star Resource Group.
1”Historical Marital Status Tables.” United States Census Bureau. Last modified November 15, 2017. https://www.census.gov/data/tables/time-series/demo/families/marital.html
2Livingston, Gretchen. “Four-in-Ten Couples are Saying ‘I Do,’ Again.” Washington, D.C.: Pew Research Center. Published November 14, 2014.
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