Marrying for Richer Rather than Poorer

  • Forget romance, marry for money

    Money can't buy love, but love may bring you money -- if you're married, that is. Though marriage has evolved from a strictly businesslike arrangement to a more romantic union, an official partnership can result in decidedly pragmatic benefits: increased wealth.

    A study completed in 2005 by Jay Zagorsky at Ohio State University's Center for Human Resource Research followed subjects for 15 years and found that being married increases an individual's wealth above and beyond that of two single people.

    Single study subjects accumulated about $11,000 of wealth after 15 years. People who got married, and stayed married, accumulated about $43,000 in 10 years of marriage.

  • Two is cheaper than one One reason married couples accumulate wealth more easily than their single counterparts is that they have lower overhead. It costs less to maintain one household than two. Similarly, couples can take advantage of economies of scale that make buying for two more cost-effective than buying for one. For instance, grocery shopping for one can be just as expensive as buying for two. "Larger quantities are usually priced lower per unit than smaller quantities. This also usually applies to health and auto insurance. It is easier and cheaper to add another person to a policy than to take out a separate policy," says Michael Greaney, CPA, of Equity Expansion International in Washington, D.C.

    Cost efficiencies are less obvious than the savings reaped by buying extra-large cans of ravioli or fruit in bulk.

    "For a single person, finding the time to prepare dinner, do the laundry, iron clothes, vacuum, wash dishes is difficult. Add just one other person and the same or lesser effort tends to have more than twice the result," says Greaney.

    A single person may be tempted to outsource some chores, and pay for it.

  • Efficient management of financial resources

    Being accountable to another person can keep spending on the straight and narrow, particularly when working toward a mutual goal such as buying a house or financing an exotic vacation.

    To keep household finances shipshape, budgets and goals should be reviewed often. In fact, running your household finances similar to a business may not be a bad idea.

    "The business model of (evaluating earnings and expenses) at least four times a year would probably be good for most families. A marriage is not a business, but being businesslike is another matter. Aristotle in 'Politics' characterized the family not just as the basic political unit of society, but as the basic economic unit," Greaney says.

    The U.S. government clearly agrees with that sentiment and gives married couples some breaks related to taxes and retirement.

  • Income tax benefits

    A married couple can file their taxes jointly. With disparate incomes, a married couple pays less in taxes than they would singly.

    "The way that our tax system works is that the more you make, the more you're taxed. And when you're married, the rate goes up at a slower rate than when you're single," says Noah Rosenfarb, CPA and founder of Freedom Wealth Advisors in Short Hills, N.J.

    There is one possible financial disadvantage to being married: the marriage tax penalty.

    Though the 2001 Bush tax cuts eased the tax burden on married couples earning close to the same amount, the marriage tax penalty lives on for couples whose earnings exceed a certain threshold.

    Depending on their tax bracket, a married couple could end up paying more in taxes than they would if they were single.

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