Financial Pros/Cons of being Married/Single in Retirement

[ER Eddie]

Ok. I'm not a financial expert or tax guy, so I'm in no position to defend what she's saying (she's not a financial person either -- she's coming at this from a sociological point of view). I give her credence, but she's clearly trying to make a point and is probably padding her case a bit. She gets a little too much into the "victim" mentality sometimes, which bugs me, but otherwise I find her very enlightening, if a bit too research-heavy at times. The other article has 21 points rather than 8, fwiw, so you might find more there. Or you might check out the paper by the person who worked at the Dept. of Treasury, which she cites as support or the other articles linked there.

Anyhow, I was just passing along what I knew, because it seemed to touch on the subject being raised here. I haven't read or analyzed each point myself -- as a single person, they just depress me, lol -- but I thought you might find them useful.

Guess not! Just disregard, then.

 

[rodi]

#1 would be income taxes are cheaper on married filing together.

This is not necessarily true. If both people have decent income, there is a marriage penalty (more taxes) vs 2 single filers. It's best to run it through a calculator. If one person has significantly higher income, it typically is cheaper to be married.

Marriage Bonus and Penalty Tax Calculator | Tax Policy Center

Some pensions, alimony, etc get impacted if you remarry following the death of a spouse. Other benefits might increase.

My dad received survivor benefits of my mothers pension after she died. My step mom received SS on her deceased 1st husbands record since it was higher than her own record. If they'd married they would have lost about $3k/month. But they wanted the legal rights that convey when you're married - right to make medical decisions for each other, easier ability to jointly own property, etc... CA had a domestic partnership that fit the bill for them.

I used to joke that they were shacked up... but it made *total* financial sense for them not to get married. She's still family in my books.

 

[Johanson]

Ok. I'm not a financial expert or tax guy, so I'm in no position to defend what she's saying (she's not a financial person either -- she's coming at this from a sociological point of view). I give her credence, but she's clearly trying to make a point and is probably padding her case a bit. She gets a little too much into the "victim" mentality sometimes, which bugs me, but otherwise I find her very enlightening, if a bit too research-heavy at times. The other article has 21 points rather than 8, fwiw, so you might find more there. Or you might check out the paper by the person who worked at the Dept. of Treasury, which she cites as support or the other articles linked there.

Anyhow, I was just passing along what I knew, because it seemed to touch on the subject being raised here. I haven't read or analyzed each point myself -- as a single person, they just depress me, lol -- but I thought you might find them useful.

Guess not! Just disregard, then.

I sincerely appreciate the post! I'm looking for pure financial pros and cons to being married but any social/familial input is also appreciated. Her best point, IMO, is the SS aspects of being married. Being able to draw off of someone else's SS has to be huge.

I'm also beginning to think that marriage is far more beneficial financially for a person who has earned and/or makes far less than their spouse. I know when I was married, I made way more than my wife. After the divorce, I seemed to be far better off than when I was married, at least at tax time. I went from having to pay in at the end of the year to getting thousands back. Plus, I had more money in my pocket at the end of every pay period.

 

[Sunset]

What's the marriage tax penalty then?

Married couple can only claim $3,000 loss carried forward, but 2 single folks living together can claim $3,000 + $3,000 = $6,000

 

[kaudrey]

It definitely depends. One reason my aunt and "uncle" never married was that they met later in life and the taxes would have been worse if they were MJF. They spent 30 wonderful years together until he passed away in October....

 

[athena53]

As a single person living next door to my SO, I do not share money with him or anyone. I spend a lot less because there is no urgency to spend the money before it is gone. I think that would be true if we lived together also, as long as we did not share our money and expenses, and each paid our share of expenses separately.

Not sharing money has the added benefit of eliminating a lot of discord. I really don't care what he spends his money on since it isn't my money.

DH and I kept our finances separate. His tastes were extremely modest (my Ex was more like yours) but I was just more comfortable having my own accounts. It worked for us.

Having said that- I know we were hurt on the taxes when we married. I was 50 and working FT, he was 65 and started collecting SS. He had no other income but 85% of his SS was taxed because of the level of our combined incomes. He lost out on some state tax breaks, too, that he would have gotten if he'd been single. One year the taxation of SS added $7,000 between state and Federal.

DH died late least year and I am NOT looking forward to paying taxes for 2017 as a Single. I'm gonna get killed. I likely will not remarry, though. At this age (almost 64), I could have all but a sliver of my own assets tapped to pay for long-term care for a husband who doesn't have assets of his own for LTC. Even without LTC, there are other bad scenarios. In DH's last weeks I couldn't go out of the house for too long because there was a risk he'd fall getting out of bed or trying to walk with a cane (happened several times while I was right there). I used a home healthcare agency who sent wonderful people to stay with him but it was $22/hour. Not covered by Medicare, not tax-deductible. I got off easy. Months or years of that type of care could take its toll.

 

[socca]

I likely will not remarry, though. At this age (almost 64), I could have all but a sliver of my own assets tapped to pay for long-term care for a husband who doesn't have assets of his own for LTC.

I tried to fix up my then-100 year old grandmother with a then-105 year old guy living nearby. She spat out in disgust, "He's just looking for someone to take care of him." I didn't try that again.

 

[kgtest]

divorce and heir are the real factors.

If married then divorce could impact more.
If married then divorce could impact heirs


In my situation I ran the numbers it was maybe $1000 tax difference on a $100,000 salary... <1% hit a year but IMHO but that is not constant and tax laws could change.

Alimony and SSA are impacted with/without marriage.

 

[jkern]

I just got married last year and for us we will pay a little more being married than if we were single. Also, if a few years we will be paying a lot more being married because if I were single my SS would not be taxed until age 70.