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When you say "I do," you're making a statement of commitment for the long haul, so you should really be setting up your finances for a future of health, wealth and happiness. That includes taking advantage of some of the financial perks that come along with marriage, such as potential tax benefits, joint borrowing power and streamlined household budgeting.
Of course, money can't buy love or happiness—but marriage may mean a little bit more money to spend on other things.
Simplify Your Life With Joint Bank Accounts
Marriage isn't always just a legal and romantic union—for many couples, it means uniting financial lives as well. This move isn't for everyone (some may want to maintain their financial independence), but it's not uncommon for couples to join their accounts once they tie the knot. The decision can mean a simpler budget as you combine financial obligations and tackle them as a team—with combined incomes.
Having a joint bank account you pay all your expenses from can be a great way to cut down on financial squabbles and have more household accountability for where money goes. There are several ways you may choose to manage the account as a couple. You might, for instance, deposit your paychecks into one checking account you use to manage your bills while maintaining a joint savings account for long-term goals like homeownership. Or, you might keep your individual checking accounts and transfer a certain amount of money every month into an account you use for bills, and into another one you both use for savings.
Joining financial lives can result in tough conversations if there's an income disparity, or if one partner has misgivings about doing so. Take it slow, and try not to make any hasty decisions or put your partner in an awkward position. With or without shared accounts, budget and plan for the future together so that neither debt nor retirement can throw your marriage bliss off course. Remember, you have your whole life ahead of you.
Enjoy Increased Borrowing Power
Getting married and combining your bank accounts won't wed individual debts you brought into the marriage—those stay separate in your own names (and on your own credit reports). But when it comes to new debt you might want to take on as a couple, lenders consider both married partners' credit in their loan applications. If one spouse has excellent credit, it can improve borrowing opportunities for the couple, even if the other has a less-than-perfect history. The legal ties of marriage don't directly affect your individual credit scores or reports, however, no matter how much debt either partner has or doesn't have.
Debts you acquire together after marrying—whether by cosigning for each other or opening a new account together—will belong to both of you. If you live in a community property state, both spouses are responsible for debt taken on while married, no matter which partner borrowed it. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin; Alaska gives the option of community property.
While any debt either partner enters the marriage with remains the responsibility of the borrower, your financial history can affect your financial future as a couple. Be sure to check in regularly to avoid any financial surprises down the road.
File Together for Income Tax Benefits
Taxes can be as complex as maintaining a successful marriage, and those taxes get doubly complicated when it comes to filing as a married couple. Whether tax season rolls around before, during or after your honeymoon phase, you may see either an annual bonus or a penalty.
Depending on your individual tax situations, you and your spouse may owe less (or get back more) filing as a couple than you would if you filed separately. This often occurs when a couple has a large difference in their income levels. On the other hand, a couple with similar income levels may end up paying more in taxes if they choose to file a joint return than they would have filing individually.
You and your spouse can still file your taxes separately if you worry about tax penalties, but it could be worth it to first go over your options with a tax professional. After all, some of the best tax breaks and credits for married couples are only available if you file together.
Gain Social Security Benefits
When you promise to care for each other in sickness and in health, you become entitled to certain perks through Social Security. Social Security spousal benefits, available for couples who qualify, allow one partner to collect up to 50% of the other's Social Security benefits.
Social Security survivor benefits also kick in if the worst should happen and one spouse passes away. When one spouse dies, the surviving spouse is eligible to receive their benefit payment when they retire. Generally, the surviving spouse needs to be at least 60 years of age to collect survivor benefits, with full benefits taking effect once the widow or widower reaches full retirement age.
Consider Combining Health Insurance
Not every employer allows you to add a spouse to your insurance, but combining insurance can be beneficial when one of your insurance plans offers significantly more coverage, a lower cost or both.
If you go this route, you may be subject to some additional costs on the insurance plan to account for your spouse's inclusion; you can weigh this against the cost of keeping your own separate health plans. If you have a family, all your medical spending counts toward your insurance maximum, so you might be able to financially justify the spousal surcharge, rather than paying two separate insurance premiums. Compare the details of your coverage to see if you can save on expenses by merging.
Investing for Retirement
An individual retirement account (IRA), and the employer-backed 401(k) are excellent ways to set yourself (and your spouse) up for later in life. These allow you to invest and grow your money to pay for retirement—essentially, investing in your IRA means setting up a future income for yourself. With a spousal IRA, one partner can put their own earnings toward an IRA in the other's name, which can be a great way for couples to plan ahead if one spouse doesn't bring in much income.
If you max out your 401(k)s and IRAs, you and your partner can review next steps with an investment advisor. They can set you up with options like joint investment accounts—which could be taxable but still contribute to your overall retirement savings.
Plan Your Estate as a Married Couple
Planning your estate—meaning, arranging how your assets will be passed down after one or both of you pass away—can make sure your budding family stays financially protected should the worst happen. Your estate plan should include a will, a living trust, medical power of attorney and financial power of attorney. Your estate includes your assets as well as any sentimental items you hope to pass down. Even if you're in your 20s, it's not too early to create an estate plan.
Married couples as of 2021 enjoy a tax exemption of $23.4 million on their estate—which means, upon death, most spouses inherit their partner's estate tax-free.
The Bottom Line
Marriage isn't about money, but you'll be much happier tackling your finances as a team and capitalizing on your benefits together. Even if the wedding costs more than your first car, you can walk off into the sunset knowing you'll both be basking in the financial perks of marriage after you say "I do."