The U.S. Supreme Court just legalized gay marriage nationwide. If same-sex couples get married, they gain access to hundreds of legal and financial benefits.
They—and anybody else thinking about marrying—also bear some often-overlooked costs and responsibilities.
Even couples who have been together for decades may be surprised by how a legal marriage changes their relationship. In the eyes of the law, couples who marry go from two independent people to one economic unit.
“You’re telling the government: I will take care of this person legally and financially if something happens to them,” said Debra Neiman, a financial planner in Arlington, Mass. She saw many clients rush to the altar when Massachusetts became the first state to recognize same-sex marriage, 11 years ago, and it didn’t always work out.
“Just because you have the right to marry doesn’t mean you should,” Neiman said. “For people who are used to being financially independent and unencumbered, it may be hard.”
Still, the legal and financial perks of marriage tend to outweigh its costs and hassles. And the biggest practical benefits of marriage come when they’re needed most—when a spouse is sick or dies. How do you weigh the cost of higher income taxes each year—a possibility for many two-income couples if they get married—against the right of a widow to stay in her house or decide where her wife is buried?
So, coldly ignoring the whole happiness thing, here are some of the practical pros and cons of marriage.
Pro: retirement benefits
Married people can share each other’s retirement funds and Social Security benefits in a way that makes planning a lot easier. If one spouse dies, the remaining spouse can inherit pension payments or Social Security survivor benefits. When you’re married, it’s far easier to roll over a spouse’s individual retirement accounts or 401(k)s into your accounts after he or she dies. Marriage lets you deploy some complicated techniques to boost your Social Security payments—for example, by accessing one spouse’s benefit early but not tapping the other until he or she is eligible for the maximum payout at age 70.
Pro and Con: income taxes
Taxes are complicated, but here’s one rule of thumb: Getting married tends to lower a couple’s income tax burden if one spouse earns a lot more than the other. If a lawyer and a stay-at-home dad marry, for example, they’ll almost certainly save money on taxes. Couples can face a higher tax bill, however, if both spouses earn about the same. The marriage penalty can be especially high—in some cases, tens of thousands of dollars a year—if both are well-paid professionals with six- figure salaries. If you and your partner each make $300,000 a year, you’re paying a top tax rate of 33 percent. If you get married, your $600,000 will be taxed at 39.6 percent.
Con: government benefits
Because getting married can boost your household income, it may make you ineligible for certain kinds of help—financial aid for college, for example, or programs designed to make it easier to pay back student debt. The U.S. Income-Based Repayment program, or IBR, limits your student loan payments to a percentage of your income. A single person making $40,000 a year, with $100,000 in student debt, might pay $280 a month. If that person marries someone earning $40,000 a year, his or her payment could jump above $700 a month. If the spouse makes much more than that, they may become ineligible for IBR altogether.