How will same-sex marriage affect SS/Pensions?

[urn2bfree]

Wikipedia is known to have less-than-accurate info on a number of subjects and I am highly suspect in this number. I really do not believe we will ever know the % - not that it really matters.

Here's info from Gallup pointing out the difficulty of coming up with an accurate number:

What Percentage of the Population Is Gay?

Not trying to be difficult or hijack the thread, but what is YOUR source or example to back up this notion about Wikipedia being inaccurate? About which "number of subjects" is this "known?" I do not know if that is or was true, but such off hand dismissal,of information requires some backing up, too.

 

[REWahoo]

Not trying to be difficult or hijack the thread, but what is YOUR source or example to back up this notion about Wikipedia being inaccurate? About which "number of subjects" is this "known?" I do not know if that is or was true, but such off hand dismissal,ofinformation requires some backing up, too.

I checked Wikipedia and they say they are accurate.

Seriously, I'm in complete agreement with the bold part of your quote above.

If I can believe the accuracy of the info I see on the internet about the accuracy of Wikipedia , (like this one or this one), certainly most of the info contained in Wikipedia is correct. Problem is, some of it is not (one of the linked articles quotes an estimate of less than 5%) and there is no way to know which is which without looking to other sources for confirmation. That's what I did when I made my comment, and found several sources that differed substantially from the % you quoted from Wikipedia.

In the words of a former US Pres, "Trust but verify".

 

[MichaelB]

+1 @ trust but verify. There is no reason to believe Wikipedia will be more accurate than other informed sources, on this or any other topic.

 

[bUU]

I think the controversy about the number of homosexuals is a distraction. While there is a compelling need to establish firm numbers on which to make projections of costs and revenues into the future, the efforts to do so will invariably be derailed by the push-and-pull of those trying to manipulate whatever numbers are arrived at, in order to promulgate their perspective with regard to the political matters.

What matters in terms of the projections, though, aren't the number of homosexuals, but rather the number of same-sex marriages. For that, we are starting to get some good numbers. Ignoring the initial flood of same-sex marriages in 2006, Massachusetts has been running approximately 1600 same-sex marriages per year. [Source: The Republican Newsroom, MassLive.com.] Compare that to 36000 marriages in total, on average. [Source: US Census.] So same-sex marriages represent about 4.5% of marriages in the Commonwealth.

This reflects the best information we have regarding the impact of a compassionate, accepting state on the rate of same-sex marriage within it. (There might be some useful data from Iowa, but I suspect it will show pretty-much the same.) It fully reflects any systemic difference there might be between the propensity to marry between homosexuals and heterosexuals, because all we care about for these projections is how many marriages there are. There is some upward pressure reflected in that number due to folks relocating to the Commonwealth to enjoy the benefits of marriage, but also a lot of downward pressure on that number stemming from the fact that DOMA severely capped the benefits of marriage. No one can prove that the upward pressures are more or less than the downward pressures, so 4.5% remains the best number based on real data. There is already firm data regarding the number of marriages for use in the projections, so the projections are best served by considering the impact of an up-to 4.5% increase on top of those projections, again both with regard to costs and tax revenues associated with the marriage penalty, etc.

So the variable that remains is if, and if so then how long until, other states become compassionate and accepting of homosexuals as Massachusetts is, thereby bringing about same-sex marriage up to that same rate. In other words, we could see this as a nationwide curve that increases over time, with 4.5% as an asymptotic point. The slope and inflection points of that curve remain a mystery: Since they are reflective of changes in attitude they cannot be modeled based on existing data, especially since, by its very nature, the curvature reflected by the states that have already progressed cannot be used as indicators, since they are generally the most progressive states. Less progressive states will not only lag, in terms of rate of progress, but may follow completely different paths. Their status as less progressive may, itself, have already pre-biased their population, effectively fostering relocation of homosexuals out of those states and into the more progressive states.

 

[donheff]

For SS and pensions specifically that is probably the case. However, for a same sex couple deciding whether to marry or not, particularly later in life, I can see that it would be something to think about just like it may be for opposite sex couples. That is because, the only benefits are not just SS and pensions. When looking at the entirety of benefits in some instances marriage would be financially beneficial while in others it might not. A married couple might pay more in income taxes, for example. Someone eligible for SSI or Medicaid as a single person might not be eligible as a married person, and so on. In short, being married doesn't just involve financial benefits but can also involve financial penalties.

For both straight and gay high-dual-income couples the financially optimal path might be to stay single until ER (thus limiting income taxes) and marry in the autumn years so they can pass their estates to each other without tax or probate. But most of us don't make marriage choices based primarily on money.

 

[bld999]

For both straight and gay high-dual-income couples the financially optimal path might be to stay single until ER (thus limiting income taxes) and marry in the autumn years so they can pass their estates to each other without tax or probate. But most of us don't make marriage choices based primarily on money.

Have I missed an entire chapter on law and tax code? How does this work?

 

[rodi]

This does bring up an interesting, legitimate question (and one which I am not at all attempting to troll with, given the recent legal precedent) : if two people of the same sex can legally get married and utilize the unlimited marital deduction for estate tax purposes...how would the court rule on two brothers or two sisters (or any two "close relatives" of the same gender) who's family has significant wealth and does the same thing? The gov't could argue that a brother and sister (or similar related opposite sex couple) who are too close on the family tree are not permitted to legally marry for reasons of too much similarity in the gene pool...but that would not be the same 'concern/justification' for denying two relatives of the same gender from marrying.

The gov't could try and claim that it's a sham marriage only intended to skirt the estate tax laws - but what would be the dividing line between a 'sham same sex arrangement' and a 'legitimate' one when it involves people close to each other on the family tree? What legal precedent is there involving an opposite sex couple marrying "for love" when one spouse is older and/or has a terminal illness, versus it being considered a "sham"?

This is a red herring. It is not legal for siblings to marry. Nor for first cousins. 2nd cousins is another thing (ask Rudy Giuliani).

There are plenty of marriages that are basically business arrangements. My husband worked for a well known firm where the married principals' marriage was far more a business arrangement than a marriage... down to seperate houses for living. But it was a legal arrangement that lasted decades.

I live in southern CA... Lots of marriages that are based on less altruistic, romantic reasons. ( eg: old guy marrying young hotty... she's doing it for financial reasons, not love... he's doing it for reasons that are probably not based on "soul mate" criteria.) But they are legal marriages.

 

[donheff]

Have I missed an entire chapter on law and tax code? How does this work?

To be honest, I don't know if it does. But everybody talks about the tax penalty for dual high income earning married couples. They would be better off if they were single apparently. So, live together single for most of your life. Pay single tax rates and save bucks for 30 years. Get married in your 70s after experiencing a religious conversion (to avoid charges that you were motivated purely by tax considerations) and whoever dies first passes on their estate to the other under the marriage rules.

 

[anethum]

Sure, who says you have to be gay to enter into a same sex marriage?

Who says you have to be straight to enter into an opposite-sex marriage?

Who says you have to be in love to enter into any type of marriage?

------------------------------------------

As for the original question, any negative fiscal effect on the federal treasury will be trivial in the grand scheme of things. But the effects for individual same-sex couples or surviving spouses are potentially highly significant.

The greater effect, however, is to make gay citizens equal to straight citizens, at least in those 13 states & DC where same-sex marriage exists. That's priceless.

 

[youbet]

To be honest, I don't know if it does. But everybody talks about the tax penalty for dual high income earning married couples. They would be better off if they were single apparently. So, live together single for most of your life. Pay single tax rates and save bucks for 30 years. Get married in your 70s after experiencing a religious conversion (to avoid charges that you were motivated purely by tax considerations) and whoever dies first passes on their estate to the other under the marriage rules.

As long as you have a guarantee that neither will die unexpectedly before marriage.......

I think that dual career - high income homosexuals have the same issues to consider when deciding whether to marry or not as dual career - high income heterosexuals.

 

[youbet]

There are plenty of marriages that are basically business arrangements.

Of course. The legalization of same sex marriages simply expands the population who might choose to take advantage of legal rights, gov't benefits or laws currently in place for married partners.

Going back to OP's opening question regarding SS and gov't pensions, I think that as long as the ten year rules remain in place (you must be married to someone for ten years in order to qualify for spousal SS benefits based on the other person's earnings record) marrying for SS benefits will be minimal. There are similar rules for many private pensions too.......

Much of our tax code relates to marital status. Property ownership laws, insurance regulations and pension rules too. It will be interesting to watch and see if anything develops where folks are taking advantage of new situational circumstances and eventually causing codes, rules, laws, etc. to be changed.

We'll see.......

 

[haha]

Who says you have to be straight to enter into an opposite-sex marriage?

Who says you have to be in love to enter into any type of marriage?

Certainly not me.

I have no opinion on anything, except what I will have for dinner.

Ha

 

[ERhoosier]

For both straight and gay high-dual-income couples the financially optimal path might be to stay single until ER (thus limiting income taxes) and marry in the autumn years so they can pass their estates to each other without tax or probate. But most of us don't make marriage choices based primarily on money.

But in a few narrow circumstances the "unlimited" marriage estate tax exemption could in be a net tax DISadvantage. IIRC, for 2013 the exemption is $5.25M. Two individuals worth $5M each could die & leave total $10M to their heirs without triggering estate taxes. However if those 2 marry, one dies & inherits all, then that remaining spouse soon dies the gov't gets to tax $4.5M of the total estate of these 2 folks.

 

[urn2bfree]

But in a few narrow circumstances the "unlimited" marriage estate tax exemption could in be a net tax DISadvantage. IIRC, for 2013 the exemption is $5.25M. Two individuals worth $5M each could die & leave total $10M to their heirs without triggering estate taxes. However if those 2 marry, one dies & inherits all, then that remaining spouse soon dies the gov't gets to tax $4.5M of the total estate of these 2 folks.

Not sure about that...something about portability of the exemption passing to the surviving spouse or something.

 

[ERhoosier]

Not sure about that...something about portability of the exemption passing to the surviving spouse or something.

Although portability of spousal exemption was indeed extended in 2013, this issue remains complex. Portability of spousal exemption is not automatic and (apparently) does not apply in all circumstances. With amount of $$ involved in potential tax, getting solid tax advice for individual circumstances is wise.

A Married Couple's Guide To Estate Planning - Forbes

 

[Calico]

[snip]
As for the original question, any negative fiscal effect on the federal treasury will be trivial in the grand scheme of things. But the effects for individual same-sex couples or surviving spouses are potentially highly significant.

The greater effect, however, is to make gay citizens equal to straight citizens, at least in those 13 states & DC where same-sex marriage exists. That's priceless.

+100

 

[WestLake]

In the vast majority of Anerica you can still be fired for being gay. You can be ostracized from your family, effectively excommunicated and if you look at somebody the "wrong" way, get your ass kicked. Most gay people are not going to be getting married or even coming out of the closet. So putting a percentage on the population is a dicey business.

 

[donheff]

But in a few narrow circumstances the "unlimited" marriage estate tax exemption could in be a net tax DISadvantage. IIRC, for 2013 the exemption is $5.25M. Two individuals worth $5M each could die & leave total $10M to their heirs without triggering estate taxes. However if those 2 marry, one dies & inherits all, then that remaining spouse soon dies the gov't gets to tax $4.5M of the total estate of these 2 folks.

Yes, if you are trying to pass on the estate to kids or someone else concentrating the whole large estate in the surviving spouse could be a problem. You can get around that by having the assets go into a family trust with the surviving spouse as executor holding authority to use the assets for maintenance during his or her lifetime. I don't know whether two unmarried partners can do the same thing. I doubt it or same sex couples would have been using that approach to bypass immediate estate taxes for years. In any event, 401ks and IRAs can't be handled with a trust. Spouses and kids are able to empty tax advantaged accounts over time so they don't take a huge immediate hit. Not sure whether that applies to a non-related partner who inherits.

 

[militaryman]

IMHO this will open up the whole idea to the entire population of exactly what the benefits and detractors are financially when two decide to marry (SS, pensions, healthcare etc etc)

The idea that two people that are married are necessarily romantically involved will slowly dissipate as folks realize that by getting hitched they can get healthcare, "protect" their nest egg and/or pass more on to their kids if they find "another" that has like interests of working the way our current system is set up to their advantage.

I would say in 10 years or less that two guys that are married and 65 years old would in no way be thought of as necessarily gay, just the same sex. Also you might very well see a gal of 27 years old "marrying" a 65 year old gal (possibly offering to help the older gal with elder care?) and then BOOM health coverage for life even after that older gal passes as long as the 27 yo does not remarry. Lots of scenarios like this will become the norm. is my guess and you (friends and relatives) of the two "gals" might never even know that it is occuring as it will be more of a business arrangement between two people than anything else.

Right now people probably do not think much of the financial benefits of marrying or not ( although I think the elderly population does more so ) But now that the legalization of same sex marraige is occuring I think that ALL people (not just 3-30% or whatever) will start to get educated on the advantages and disadvantages and in tough times people will use those advantages. And as more and more DO take advantage then others will pile on and realize that by not considering this route they are possibly giving up some serious benefits.
Since the whole of the population will then be considering the advantages of marrying for financial benefits then the adverse effects on SS, pension systems etc WILL be hugely effected but I think that within 30 years the laws will all have to be re-written so that being married or not has little or no benefit.

 

[Meadbh]

I predict a boom in the wedding industry, to be followed in a few years by a smaller boom in divorce litigation.

At least that's what has happened here.

Guess how much the same-sex wedding industry is worth in Canada (think big) - The Globe and Mail

This timely article puts the impact at ~$567m in Canada. Just multiply by 10 to estimate economic impact in the US.

 

[Ready]

IMHO this will open up the whole idea to the entire population of exactly what the benefits and detractors are financially when two decide to marry (SS, pensions, healthcare etc etc)

The idea that two people that are married are necessarily romantically involved will slowly dissipate as folks realize that by getting hitched they can get healthcare, "protect" their nest egg and/or pass more on to their kids if they find "another" that has like interests of working the way our current system is set up to their advantage.

I would say in 10 years or less that two guys that are married and 65 years old would in no way be thought of as necessarily gay, just the same sex. Also you might very well see a gal of 27 years old "marrying" a 65 year old gal (possibly offering to help the older gal with elder care?) and then BOOM health coverage for life even after that older gal passes as long as the 27 yo does not remarry. Lots of scenarios like this will become the norm. is my guess and you (friends and relatives) of the two "gals" might never even know that it is occuring as it will be more of a business arrangement between two people than anything else.

Right now people probably do not think much of the financial benefits of marrying or not ( although I think the elderly population does more so ) But now that the legalization of same sex marraige is occuring I think that ALL people (not just 3-30% or whatever) will start to get educated on the advantages and disadvantages and in tough times people will use those advantages. And as more and more DO take advantage then others will pile on and realize that by not considering this route they are possibly giving up some serious benefits.
Since the whole of the population will then be considering the advantages of marrying for financial benefits then the adverse effects on SS, pension systems etc WILL be hugely effected but I think that within 30 years the laws will all have to be re-written so that being married or not has little or no benefit.

This seems like a radical way of thinking IMO. I'm sure that there is some percentage of the straight population that has used marriage as a business arrangement in the past. Nobody has ever seemed to be particularly concerned that this may be happening, as it is likely not a significant percentage of the population. If the same percentage happens in the gay population, so be it. I just don't see it being any more prolific in the gay population vs. straight.

But let's take the extreme point of view and say that it happens. So what? Even if two people form an arrangement of sorts without being in love, doesn't it still provide them with a form of protection that ultimately marriage was designed to encourage? In an ideal world, everyone falls in love and gets married and spends the rest of their lives together, and the couple helps each other out, thus creating the family unit. If some non-traditional family units are created that don't involve the romance part, but still provide some protections, what is wrong with that? We just have to stop thinking that the traditional view of marriage is the only way to do things. People are so quick to frame these issues as "right or wrong", as if there is only one proper way for people to behave, and anyone who deviates from that is not normal. I'm sure religion plays into this heavily, but at some point we have to separate church and state and let people live their lives as they choose, as long as they are not harming anyone else in doing so.

 

[Meadbh]

This seems like a radical way of thinking IMO. I'm sure that there is some percentage of the straight population that has used marriage as a business arrangement in the past. Nobody has ever seemed to be particularly concerned that this may be happening, as it is likely not a significant percentage of the population. If the same percentage happens in the gay population, so be it. I just don't see it being any more prolific in the gay population vs. straight.

But let's take the extreme point of view and say that it happens.

Historically, and currently in non Western societies, marriage as a primarily business decision has always been normal. The whole "romantic love" thing arose in Europe in medieval times and it was a major cultural disruption. At least that's what I recall from history lessons!

 

[militaryman]

This seems like a radical way of thinking IMO. I'm sure that there is some percentage of the straight population that has used marriage as a business arrangement in the past. Nobody has ever seemed to be particularly concerned that this may be happening, as it is likely not a significant percentage of the population. If the same percentage happens in the gay population, so be it. I just don't see it being any more prolific in the gay population vs. straight.

But let's take the extreme point of view and say that it happens. So what? Even if two people form an arrangement of sorts without being in love, doesn't it still provide them with a form of protection that ultimately marriage was designed to encourage? In an ideal world, everyone falls in love and gets married and spends the rest of their lives together, and the couple helps each other out, thus creating the family unit. If some non-traditional family units are created that don't involve the romance part, but still provide some protections, what is wrong with that? We just have to stop thinking that the traditional view of marriage is the only way to do things. People are so quick to frame these issues as "right or wrong", as if there is only one proper way for people to behave, and anyone who deviates from that is not normal. I'm sure religion plays into this heavily, but at some point we have to separate church and state and let people live their lives as they choose, as long as they are not harming anyone else in doing so.

My thoughts in no way said that what I thought might happen was right or wrong ....

The question in the OP's thread asked Does anyone know how this SCOTUS ruling will affect the future ability of SS/government pensions to pay additional benefits that they had not previously had to consider? I assume that there will be a negative impact on these funds.


Of course, no one "KNOWS" because there are too many variables and much depends on the publics behavior and reaction moving forward.

So one can only give their opnions and those of others.

I do think that the legalization will effect SS, pensions and healthcare dramatically as it will open up the entire populace to the benefits that marriage can have on their financial security and right or wrong it will remove some of the "stigma" that marriage is reserved for a certain group (intimately involved heterosexuals) -- All folks will begin to see the various angles they can use the system legally as written without regard to any gender.

Heck, for some it might just be the fact of knowing that marrying the same gender will guarantee them certain financial benefits without any possibility of off-spring from the "relationship"

Whether it takes 10 years or 30 years these changes will have a profound effect on the system as we know it and you will then see the laws changed to compensate.

Let's just get personal with this --- If my spouse passed away and my daughter was "living" with a man and had kids I would consider marrying that man on paper ( if I trusted him and in their relationship ) so that when I died my military survivor benefits plan would continue to pay him a check every month as long as he lives, thus providing an additional income stream for my daughter and grandchildren.

There you have it -- and there are soooo many other scenarios that exist

The can of worms is open -- For this discussion "right or wrong" are not the issue --

It is more legal or not legal and for some if it is legal and others are doing it and benefitting from it then that is enough to push them to also consider doing it and reaping any benefits. As that snowball rolls on folks will find it easier and easier to seriously consider it.

Who can blame them

Marriage for all!! Yipee

 

[Ready]

My thoughts in no way said that what I thought might happen was right or wrong ....


Let's just get personal with this --- If my spouse passed away and my daughter was "living" with a man and had kids I would consider marrying that man on paper ( if I trusted him and in their relationship ) so that when I died my military survivor benefits plan would continue to pay him a check every month as long as he lives, thus providing an additional income stream for my daughter and grandchildren.

There you have it -- and there are soooo many other scenarios that exist

The can of worms is open -- For this discussion "right or wrong" are not the issue --

Marriage for all!! Yipee

So prior to the recent Supreme Court ruling, if your son was "living" with a woman who had kids, would you have considered marrying her on paper so that they would receive your military benefits? And if not, why would you suddenly do differently after the ruling?

 

[donheff]

So, 5% of the population can now start doing what 95% of the population has been doing forever and suddenly the whole world is going to change? Straight people who used to marry for other reasons will start drawing up marriage business plans. Straight widows and widowers will start hooking up with same sex partners to ease the retirement budget. All of this because the SC dumped DOMA? Lets get real folks.