What are the financial benefits of "not marrying" in the U.S.?

[Eliza10]

My husband and I married a few years ago and we are very happy, praise the Lord. Our children are in college or on with their adult life, and we both had marriages that ended in divorce some years ago and had each been single, non-dating divorced parents for a very long time before we unexpected met and fell in love and pursued annulments, then Catholic marriage. Both of us were in not-so wonderful shape financially, as divorce and single parenting and not-shacking-up with another wage-earning adult tends to do that to a person.

I remember that people who would know said that because of U.S. laws and/or taxes, it was a financial benefit NOT to be married, but to instead live together unmarried. That was NOT an option for us, and I never wanted to know reasons why, lest they tempt me to resent the Lord’s way. Later I found that the my paltry social security that I am to receive someday could have been MUCH, much higher if I had not married, as I would have received my ex’s generous rate. And morally, I can tell you I deserve that. Just not legally entitled, now that I am legally remarried (as well as married in the eyes of God). So that is the one (big) one way I would have saved. (Though I know that God makes everything work together for the good, and that I cannot lose doing things His way, and I expect to receive some relief on earth and if not that, in Heaven, for sure.)

So my question is not on my behalf. A cousin who is dear to me is in such a situation.His wife unjustly left him years ago for a new guy, and took him for plenty of money. My cousin is hard-working, and very thrifty and conservative, or, “Scotch” as he calls it. And he was very alone but met a very nice girl he has lived with some time and is still with. He is now facing retirement in a very few years, maybe sooner. I remember asking him long ago why he did not marry her, and he explained back then that he saves a LOT of money by not marrying, because of government rules. (I preferred not to know the savings-details back then, so I didn’t ask.) More recently I asked his partner/girlfriend why they don’t marry, and she said, “you’ll have to ask your cousin”. I got a vague answer from him, and did not pursue it, but I am sure its the same.

So I am really wondering. How much does one save here in the U.S. by not-marrying? If I ever feel called again to bring up the subject of encouraging him to marry, I would like to know what I am saying he ought to give up… Plus, I just wonder, since its such widespread common practice, like two of my brothers… and so many others. What is the big financial incentive not to marry, and what exactly does it entail??

(FYI my cousin is not Catholic).

 

[Xanthippe_Voorhees]

Well…

…it’s not really about “saving” money. It’s about how much money the government gives–or gives back–if you are single.

The idea is those who are married have a better support system. They have two incomes or the ability to have two incomes. Social services are created around this idea.

Two adults who choose to live together to defray costs—let’s say two unmarried old bachelors with no romantic interests–would have a slight advantage. But, at the same time, they are taking upon themselves the effort to home share without romance—a VERY hard thing, indeed. My friend is a single mother and she house shares with another single parent. It’s not easy—not one bit.

They don’t share finances, although they are there for each other’s children.

My husband and I are married. Same number of kids. Technically the same number of adults. But we can’t claim “head of household” on our taxes. We can’t write off other things. This means that we are not “saving” money. If we were unmarried I could “claim” to be paying expenses alongside him and we’d get a ton more. But this would be fraud.

 

[TheLittleLady]

People simply have no shame anymore about defrauding the government.

 

[Lovinglight]

Still today…financially women are better off if they marry. Men are better off if they dont.

 

[Xanthippe_Voorhees]

Still today…financially women are better off if they marry. Men are better off if they dont.

Aggregate maybe.

To defraud taxes–both sexes are equally benefitted. “Head of Household” can be claimed by both men and women and they get equal benefits.

 

[HerCrazierHalf]

What is the big financial incentive not to marry, and what exactly does it entail??

1. Assuming both make upper middle class wages or above, the tax brackets are more generous for singles. 2 single people with high salaries pay a lower rate than 2 married people. The phase out for various exemptions are not double those for singles. In my situation we pay more than we would have of we were both single.
2. In community property states, both spouses have to agree and sign loan docs for real estate loans like line of credit or refi even if only one spouse’s income and credit is the basis. Technically, 1 spouse can veto such things even on investment properties funded by just one.
3. Marriage creates a financial fiction when applying for student financial aid that can make it hard to get grants.
4. risks. A good marriage is the best thing ever. But a divorce creates a risk of destroying 2/3 of the man’s net worth. This is splitting half, lawyer fees, selling assets at bad times in the market, plus losing motivation. Seems there is a brokenness that comes over a few guys I’ve seen.

Are those you speak of making a decent salary?

 

[Eliza10]

Well-explained! Here’s some comments

full:true"]…3) Marriage creates a financial fiction when applying for student financial aid that can make it hard to get grants.

Ah,yes, she was a divorced mom with previous n’er do well husband who left, and probably needed financial help to get nursing degree, which she worked on for some long time.

4) risks. A good marriage is the best thing ever. But a divorce creates a risk of destroying 2/3 of the man’s net worth. This is splitting half, lawyer fees, selling assets at bad times in the market, plus losing motivation. Seems there is a brokenness that comes over a few guys I’ve seen.

Yes, I have two brothers who went through that, one taking it particularly hard (though every one takes it hard) and also my cousin still shudders over what his previous wife did, and I would say that soured them all on marriage.

Are those you speak of making a decent salary?

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Yes, one in a longtime career, and one just recently became a nurse.

 

[HerCrazierHalf]

Ah ok. Items 1 & 2 are probably big drivers. With such skilled professions it’s not impossible that bonuses, benefits, etc will one day expose them to the “marriage penalty”.

Starting at $91,900 each, they would possibly pay more as a married couple. If they became doctors and earned incredible salaries they’d be punished even more unless they use a myriad of tax shelters.

The “marriage penalty” was only fixed at the lower brackets.
https://individual.troweprice.com/p...lanning/Prepare-Your-Taxes/Tax-Rate-Schedules