Marriage & Insurance
Once the big day is over, it's time to get started on your next romantic venture calling your insurance providers. Of course, you are not obliged to tell your insurers about your recent nuptials, but if you do, you may receive generous discounts.
Auto Insurance
Believe it or not, getting married has a positive impact on your auto insurance especially younger drivers. Even men under 25, who generally receive the highest insurance premiums, receive a discount for being married (20-26% less*). The theory is, married people are generally safer and therefore less likely to crash their vehicles.
Home Insurance
If you are buying your very first home together, many insurers will use marital status to determine your rate and may offer a flat discount when you get married. If you already have home insurance, you can call your insurer and ask for a better deal. It is also important to add your lovely wedding gifts to your content's insurance.
Long Term Care Insurance
When you get married, you will become eligible for generous discounts on long term health insurance. As a couple, you are much more likely to care for one another at home, saving you up to 40% in the process.
Health
Changing your life insurance plan can be a difficult process. Luckily, marriage is one of the qualifying life events that allow you to make changes or add your spouse. Most policies require you to make these changes within around 60 days of getting marriage. Check your current policy for details on the deadline.
If you and your new spouse have group health insurance in your place of employment, it should cost less to add a spouse, than hold two separate plans. Compare both plans and choose the plan that best matches your needs as a couple. If you don't have employer-sponsored health insurance, don't worry, you can apply for coverage through your state or federal exchange. Again, you must make sure to do this within 60 days of getting married.
Deductibles
Getting married is just the beginning of the excitement. For a lot of newlyweds, the next logical step is starting a family. As you start to plan your future it is important to know the difference between individual and family deductibles. An individual deductible applies to only to the person named on the policy. On the other hand, a family deductible, applies to the total costs incurred by all members on the policy. For example, if your family deductible is $900, your policy will start to cover health expenses after you have spent $900 out-of-pocket for family members' medical bills.
Tax & marriage penalties
All great love stories start with a good old tax discussion. If you get married before December 31st of the tax year, you must file your taxes as a married couple. Filing your taxes together, will have a positive impact on your tax liability, especially when it comes to high cost items like your home.
For years, many couples worried about the marriage penalty. This penalty occurred, when spouses earned a similar salary and when combined, pushed them into a higher tax bracket than when they were single. Due to the constant pushback, congress took steps to reduce the penalty, making joint tax for marriage closer to the amount owed as single taxpayers. Unfortunately, the marriage penalty can still occur today, get in touch with your local tax office to find out more.
Retirement payments & benefits
Whether you're retiring soon or in it for the long haul, it is important to know how getting married can change your plans. Typically, single people can contribute the maximum amount to a Roth IRA if they make less than $116,000. Similarly, a married couple can both contribute the maximum amount if they earn less than $183,000. This type of retirement saving would leave high earning singles worse off if they were to get married.
Marriage isn't all doom and gloom though, couples will have much more flexibility across other types of retirement savings. For example, if both parties have access to a 401K through employers, they can optimize contributions based on any available employer match.
Social Security
When it comes to Social Security, it pays to be married. A single person can only earn benefits based on their own income and social security number. While married couples can claim benefits based on their partner's income. So, if you earn less than your spouse, you can claim up to 50% of their benefits. If this spouse passes away, the widow/widower can take on the Social Security benefits of the deceased.
The downfall of Social Security benefits for couples is how much tax they must pay in comparison to a single person. 85% of Social Security benefits are taxed for couples who earn more than $44,000; or for single people who earn more than $34,000. That means two cohabiting singles could earn up to $68,000 before paying a similar tax rate on their Social Security benefits.
Whether you are already married or eagerly awaiting the big day, it's important to have a chat about your financial future.
