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Contemplating Marriage Late in Life? Financial Pros and Cons

marriage late in life

Author: Ellen Blake

 

In a February 8, 2018 article in NextAvenue.org, Dan Browning wrote he would never remarry after his wife, Liz, died at age 53 in 2014 from complications related to frontotemporal dementia (FTD) and Lou Gehrig’s disease. The personality-altering disease was both devastating emotionally and physically challenging.

Dan talks about the dementia support group he joined to help him through through this challenging time. There he met Linda, whose father had late-stage Alzheimer’s disease. After Liz passed, Linda invited him to coffee and ultimately the relationship flourished into a love affair that continues to deepen today.

Practical Considerations

Dan was upfront with Linda that he was not interested in getting remarried. He did not want to ever again be put in the position of having to be a caregiver, and he also needed to preserve as much of his estate as possible for his two children, one of whom has autism. Linda understood his concerns and didn’t object.

Despite Dan’s firm declaration he would never marry again, he ultimately began to think about marriage to Linda. Love was not an issue, but the practical questions about getting married late in life were bothersome. Eventually, Dan consulted his financial adviser about the costly implications of tying the knot for the second time.

Possible Ways Marriage Might Make Life Easier

marriage late in lifeLinda has two adult children from her first marriage, earns a meager salary working at a Montessori school and has a subsidized health care policy with the Affordable Care Act. Dan believed he could make life easier for her through marriage. If he married Linda, his position as an editor at the Star Tribune would provide her with health insurance coverage and she would be eligible for a share of his pension upon retirement. Dan also believed he might receive a small tax benefit by filing income taxes jointly if he married.

Financial Realities of Getting Married Late in Life

Dan was surprised when his financial adviser and tax accountant advised him that marriage might be a bad idea, fiscally speaking, for Linda. For one thing, she would be pushed into a higher tax bracket. Secondly, after Dan retired and replaced his health benefits from the Star Tribune with Medicare at age 65, Linda might find that as a couple they made too much money to qualify for a subsidized health care plan. Linda, four years younger than Dan, would likely have this issue until she herself turned 65.

Reasons Older Adults May Choose to Live Together and Not Marry

Dan and Linda are not alone in their dilemma. According to the Pew Research Center, the number of cohabitating adults age 50 and higher rose 75 percent since 2007— faster than any other age group. Most wealth managers don’t recommend marrying late in life due at least in part to the financial issues.

Advantages of Cohabitation, but Remaining Single

active adultWhen considering estate matters and children from prior marriages, which can complicate financial planning, it might make sense not to remarry.

Pepper Schwartz, a University of Washington sociologist described as AARP’s love and relationship expert, recommends older couples considering marriage talk with both a financial adviser and an experienced elderlaw or estate planning attorney in the state where they plan to live.

“Getting married is a wonderful, romantic thing and it comes with certain rights as well as certain obligations,” Schwartz noted. “It’s a dollars and cents exercise you’d have to take a look at.”

Schwartz described one couple she knows who married in their early 60s. Their first tax bill as a married couple went up by around $40,000 as they had significant financial assets – and so they divorced.  “They realized it was just too expensive for them to be married.” said Schwartz.

Does Marriage Show a Deeper Commitment Than Living Together?

Frederick Hertz, co-author of Living Together: A Legal Guide for Unmarried Couples, explains that his clients frequently seem to believe marriage demonstrates more of a commitment than cohabitation. He also noted that some choose to marry to encourage their adult children to take their relationship seriously.

Despite people often deciding to move forward with wedding plans , it’s become more and more common for older couples to simply live together. This trend may partly be because cohabitation is becoming increasingly more socially acceptable for boomers.

Social Security and Medicaid and Life Insurance, Oh My!

The top consideration for most older couples considering marriage is how the new situation might affect Social Security benefits. For example, if an ex-husband were to die after years of making a nice living, the ex-wife receives his social security survivor benefits only if she remains single. She loses those benefits if she remarries.

Let’s look at another example of a widow who receives a survivor’s pension; she might lose that income if she remarries. Then, If the new marriage ends in divorce, she may find herself in a really tough spot.  .

And what if a significant other starts to have cognitive issues? Medicaid ordinarily helps pay for the necessary long-term care, but if remarried with a higher combined income, Medicaid will no longer be an option for her. In that case, her husband becomes liable for the costs which can be exorbitant.

Finally, life insurance for second marriages can be complicated, especially if you or your future spouse have children from a previous marriage. If you already own a life insurance policy, changing the beneficiary to your new spouse can be a challenge, especially if your ex-spouse is the original beneficiary.

The Bottom Line

Whether it makes economic sense to remarry depends on facts specific to the couple. Every situation is unique. There’s lots to think about!  If you’ve considered all the issues, done what you can to protect everyone involved and still want the wedding, by all means go for it. Please share your thoughts and experiences in the comment section below.

 

based on an article from February 8, 2018 in NextAvenue.org by Dan Browning

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