Retirement Lifestyle: Should You Say I Do?

Starting a relationship later in life can often be both exciting and fulfilling. However, for retirees who are falling in love again, getting married may not be the best next step for either of you financially or otherwise.

What Questions Should You Be Asking?

Many retirees or pre-retirees who are considering getting married to their new significant other are facing a big decision. The decision, of course, is made even more complicated by the different financial implications of getting married later in life. Sometimes, simply moving in together and cohabitating makes the most financial sense for both of you.

Here are a few questions you should ask one another to get on the same financial page before saying “I do”:

  • Were you married before, and do you expect to receive spousal benefits from Social Security?
  • Who are your current beneficiaries?
  • Will we be combining finances, or keeping separate accounts?
  • If we get married, do we become one another’s beneficiaries, or would we prefer to list our children, or other relatives?
  • How do we plan to budget during retirement as a new couple?
  • Do you have spousal benefits from a pension that will stop payments if we get married?

Will Marriage Impact Social Security or Spousal Benefits From a Pension?

The biggest of these questions is likely whether or not your retirement income will be negatively impacted by the loss of spousal benefits from Social Security or a pension. In many cases, getting remarried will cancel out these benefits. Keep in mind, you only receive spousal benefits from Social Security if your marriage has lasted 10 years or longer, and you can receive spousal benefits from an ex-spouse even if they are remarried.

For example, if you receive spousal benefits from Social Security or a pension that’s paid out as an annuity (this is often true of firefighters, public service workers, or police officers), these benefits are often halted if you get remarried. It’s also worth looking at how being married will impact your taxes. In some cases, it may raise them significantly and reduce the total amount of income you two have to work with when moving in together.

Are There Financial Benefits to Marriage Later In Life?

Of course, even if there are a few notable financial drawbacks to getting married later in life, there are also several benefits to keep in mind - financial and otherwise. Having a companion to spend the rest of your life with is often reason enough for many to get married. Being able to marry the one you love is another reason that’s difficult to argue against, especially if you have a more traditional mindset about cohabiting before marriage.

When you get married later in life, you also share one another’s assets, income, and can provide for each other in the event that one of you passes away. Going into your marriage with a strategy for how you want to budget, create your retirement income together, and set up an estate plan that benefits both the two of you and your families is a good idea.

Ready to Tie the Knot?

It can also be wise for a couple considering marriage later in life to set up a prenuptial agreement to protect both of your assets and your heirs. At the very least, the two of you should sit down with a financial planner who can help you navigate the best way to maximize your new, shared retirement income while protecting each of your interests for the long term. Ready to start the conversation about money and marriage? Reach out to us! We’re here to help facilitate your discussion and create a plan that takes all of your options into consideration.

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.

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