So, you’re thinking about getting married. Simultaneously, you could be weighing the pros and cons of tying the knot with the one you love. While finances definitely shouldn’t be your biggest reason for getting married, we thought it might be interesting to look at what effect marriage can actually have on your bank account. Whether you’ve just gotten engaged or it’s a long way away, these surprising benefits may just have an impact on how you think about marriage in the future.
1. Better mortgage rates
If home ownership is one of your and your partner’s dreams, then applying for a mortgage as a married couple definitely has its advantages. While being married won’t automatically qualify you for better rates, your mortgage offer is based on your income — which is undoubtedly higher when combined. Just make sure you take both of your credit scores into consideration, because if one of you has a drastically lower score, it can affect the ultimate loan and repayment terms.
2. More options for health insurance
Once you’ve gotten hitched, you’ll have the opportunity to add your spouse onto your health insurance plan, or vice versa. This gives you the ability to “shop around” and figure out which plan offers better coverage and/or rates. Here’s a tip: Insurers usually charge less for a single policy covering two people than they do for two separate policies.
3. You can save on taxes
While there are certain instances where filing separately has its benefits, most couples tend to see a reduction in income taxes when filing jointly. A lower-earning spouse can serve as a “tax shelter” to the higher-earning one, while filing jointly with just one income usually results in a lower tax bracket than filing as an individual. You’re also exempt from estate and what’s known as the gift tax, meaning that you can leave property, money, or assets of more than $14,000 to your hubby or wife without suffering a large tax.
4. Social Security benefits
If you’re married, you have the ability to claim either your own or up to 50% of your partner’s Social Security benefits when the time comes, even after retirement or in the case of disability or death. That means that if there’s one earner paying more into Social Security, you can both reap the financial benefits.
5. Better retirement options
Spouses have the ability to inherit each other’s retirement accounts. In addition, if one spouse is the sole breadwinner, the other can contribute to what’s called a spousal IRA, which wouldn’t be available as an unmarried couple. This leads to more options in order to maximize growth and figure out your best retirement strategy.
We love to see our Shane Co. couples tying the knot because they’re in love, but it helps to know that marriage can also provide a bit more short- and long-term financial security. Let us know how marriage has improved your finances (or your life in general) by tagging us on social media @shanecompany, or emailing us at firstname.lastname@example.org.