The Benefits of Getting Cold Feet

Here’s one the love children still hanging around will be thrilled with.

The number of people ages 50 and older who are cohabitating rather than marrying is up 75% since 2007.

My goodness! Have we thrown out everything our parents instilled in us about relationships and commitment?

Not that I have seen. Things seem to be the same at the commitment level, but the way tax brackets, health benefits and other financial aspects are set up, signing a marriage license can be a major money mistake for older people.

Depending on your situation, combining assets can lead to huge tax increases. There are cases of people who went the traditional route with a wedding and were handed six-figure increases in their tax bills after their first year together.

I know of one case where a couple divorced immediately after having their taxes prepared. It cost too much to be married.

Debt is another issue. In some states, spouses can be held liable for debt if it affects community property.

Social Security benefits can also be reduced when combined incomes increase enough to make you ineligible for widow or survivor benefits.

Financial aid for your college-age kids can be in jeopardy if your post-marriage incomes are higher.

And the stress and fractures that estate issues can drive in a family can be monstrous when two households are combined under law.

We’re living so much longer than any previous generation that many people don’t want to spend those extra years alone after a divorce or the death of a spouse.

Fifteen or 20 years alone at any age is no picnic.

But if you’ve decided that this is the one and you want to be together, the first stop should be your accountant or financial advisor – not the jewelry store.

The bills keep rolling in whether we’re married or not, and higher taxes, fewer benefits and family issues over inheritances aren’t exactly the formula for a successful retirement or marriage.

My parents’ advice to my brother, four sisters and me: Marriage can be wonderful, but it is rarely what you think it is going to be.

Make sure you know what the money aspect of a wedding will mean for you.

I wonder if my parents ever got tired of being right all the time.

Good investing,

Steve