Financial Advantages (and Disadvantages) of Marriage
Marriage: The Sacred Union of Two Hearts, Two Souls and, Less Romantically, Two Tax Returns . While poets and romantics wax lyrical about everlasting love, accountants and financial advisors view marriage through a different lens. After all, marriage is a significant economic transaction that has its own balance sheet. Let’s take a cold, calculating look at an institution that promises “for rich or poor” and see which one you’re more likely to encounter.
Financial benefits of marriage
For the most part, there are many ways in which “I do” means “we save.”
Tax benefits (sometimes)
For some couples, marriage provides an immediate return on investment in the form of a ” marriage bonus “. Couples with different incomes often end up in a lower tax bracket together than they would individually. However, the IRS does not allow wedding gifts, an exemption that typically favors traditional arrangements in which one spouse earns significantly more than the other.
Use this Tax Policy Center calculator to find out how much federal income tax two people might pay if they get married. It compares the taxes a married couple would pay filing a joint return with what they would pay if they were unmarried and each filing as single or head of household.
Savings on healthcare
Nothing says romance like health insurance discounts. Many employers offer family coverage, which costs less than two individual plans. Plus, you’ll only have to pay one family deductible instead of two individual deductibles if you both get sick from the same wedding reception.
Economies of scale
Married or not, two people can live almost as cheaply as one, especially when it comes to housing, utilities, and streaming subscriptions. Why keep two half-empty refrigerators when you can keep one completely full? The shared spending model makes everyday life more efficient if you can agree on thermostat settings.
Benefits of Social Security
Marriage offers a built-in retirement system. Surviving spouses may be able to claim their deceased partner’s Social Security benefits if they are greater than their own. It’s the government’s way of saying, “We’re sorry for your loss, here’s some money.”
Financial Cons of Marriage
When “I do” becomes “I must… pay.” Hey, not all my puns are perfect, okay?
Punishment for marriage
This is the downside of the marriage bonus. Some dual-earner couples with the same income pay more in taxes together than they do individually—the infamous “marriage penalty.” Nothing strengthens a relationship like realizing you’re paying thousands more every year for the privilege of filing jointly. Here’s that calculator again.
Total debts
When you marry someone, you don’t just get their charming quirks—you might also get their debt. While premarital debt usually remains separate, any debt accrued during the marriage may become joint liability, depending on the laws in your state. Their student loan debt remains theirs, but their impulsive decision to buy a luxury boat “for a weekend getaway” becomes your shared financial burden.
Before you decide you’re on the hook for debt , it’s usually worth taking a breath and figuring out whether you’re actually responsible .
Divorce as a financial risk
Roughly 40-50% of marriages end in divorce, a statistic that financial planners can’t ignore. On average, a divorce costs between $15,000 and $30,000 in legal fees alone, not including the financial implications of dividing assets, potential alimony, and the cost of starting two separate families. No wedding DJ ever announces, “Now let’s consider the statistical possibility of spending $20,000 to cancel this entire event!”
Benefits of Complications
Some income-based government benefits may be reduced or eliminated entirely if household income is calculated jointly. Marriage may inadvertently disqualify people from receiving financial aid, assistance programs, or income-based student loan repayment plans.
Tips on how to protect yourself financially
You’ll hear people say, “Sign a prenuptial agreement,” but what exactly does that entail? What else can you do to protect your finances in your marriage?
Talking about a prenuptial agreement
Nothing says romance like discussing how to divide assets in the event of a divorce before you even cut the wedding cake. Despite its unromantic reputation, a prenuptial agreement provides clarity and protection for both parties. Think of it like insurance: you buy home insurance not because you expect your house to burn down, but because you realize it might …
Prioritize financial transparency
Before getting married, schedule a judgment-free financial disclosure session . Identify your credit score, debt load, assets, spending habits and financial goals. When you find out your spouse has $60,000 in credit card debt while on your honeymoon, vows of “for richer or for poorer” seem a little more literal than intended.
Establish a financial basis
Decide in advance how you will handle your money: will you combine everything, keep separate accounts, or create a hybrid system? Determine who pays for what, how savings will be distributed, and how decisions about major purchases will be made. This prevents the “I thought you were paying for electricity” conversation in the dark.
Create an exit strategy for your accounts
Consider maintaining some financial independence, such as a personal emergency fund or a credit card in your name. This is not about planning for divorce, but about preserving your financial identity and credit history, which becomes critical if you are faced with unexpected circumstances such as the death or incapacity of a spouse.
Bottom line
Marriage is many things: a romantic milestone, a legal contract, and—whether we want to admit it or not—a financial partnership with significant economic implications. While love may be the reason for your marriage, money will most likely be something you discuss on a daily basis for the rest of your life together.
Good news? Financial compatibility doesn’t require having the same views on money—just open communication, mutual respect, and sometimes a willingness to compromise on whether a $7-a-day latte habit is a “necessary expense.”
After all, as the old saying goes: love may be blind, but marriage is a long-term investment strategy with variable returns and significant tax implications.