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It's not just the cost of the weddingor the cards filled with cash and checks that pile up at the reception. The legal act of getting married, as opposed to just living together, can have some immediate impacts on your financial situation — for better or worse. Take a look at this rundown of financial considerations you'll be facing after the altar. Calling insurance companies may not feel like the most romantic activity for a newlywed couple, but it could free up some cash to help pay off the honeymoon.
Both homeowners and auto insurers may offer lower rates to married couples because statistics show they behave more cautiously and file fewer claims. For auto insurance, the impact is greatest for very young people. It's worth it to call and ask for a better deal once you're hitched.
That's because spouses are likely to care for each other at home whenever possible, while a single person might not have that option. Your nuptials are also a good time to revisit your health insurance plans. Marriage is one of the qualifying life events that allow you to change your insurance plan or add your spouse.
Most plans require you to make these changes within 60 days of your walk down the aisle. If you miss that deadline, you'll have to wait until the next open-enrollment period to make changes to your plan. If either or both of your employers offers health insurance benefits to spouses, do a side-by-side comparison of your plans and consider three scenarios.
Some things to consider: How will your monthly premiums change? And what will happen to your deductible and possible out-of-pocket costs? Does your employer offer an incentive for declining coverage and ing your spouse's plan? Also, if you or your spouse have already met your deductible or paid ificant out-of-pocket costs in your current plan year, you might not want to start a new plan with new limits, especially if you're anticipating additional health care expenditures.
If you don't have employer-sponsored health insurance, you can apply for coverage on your state or federal exchange, or you can change your current coverage in the 60 days after you get married.
If you and your spouse will get coverage through an exchange, you must enroll together, although you can opt for different plans if you want. Marriage will affect — and probably penalize — newly married couples who received subsidies through the Affordable Care Act when they were single. If you and your new spouse opt for a family plan, one seemingly minor detail could make a huge difference in your out-of-pocket costs if one of you were to require medical care.
It relates to how the deductibles and out-of-pocket costs are applied; whether they are "embedded" or "aggregate," in insurance industry parlance.
Here's how that works: Family deductibles and out-of-pocket costs tend to be about twice as much as those for individuals. It works the same way for out-of-pocket limits. Embedded deductibles are more protective against large out-of-pocket costs if anyone on the family plan needs a lot of medical care during the year; however, these plans might have higher premiums.
It's not always obvious if the deductibles for a family plan are embedded or aggregate, even if you read a plan's Summary of Benefits and Coverage. You need to call the insurance company and ask. You can try these questions:. When it's time for you to file your taxes, you must file as a married couple if you wed before Dec. Most married couples should file tly, with few exceptions, such as if your spouse refuses to file. Your filing status can have a huge impact on your tax liability, especially when it comes to big-ticket items like housing. Despite what you may have heard about the marriage tax penalty, only certain couples get hit by it.
For those without children, penalties occur at the very low or very high end of the income spectrum, when both spouses have earnings. Tax penalties become more common for couples with children, except for those earning very little or those with a very uneven income split. That could leave two high-earning singles worse off after marriage in terms of retirement savings.
A low- or no-earning spouse is also better off than a low- or no-earning single person, because the spouse can contribute to a Roth IRA, or other type of spousal IRA, based on the marital income, while a single person could be out of luck, because their eligibility is based on their own income. But married couples have more flexibility when it comes to some other types of retirement savings. If both have access to a k through employers, they can optimize their contributions based on any available employer match.
Married couples also access many different Social Security options. While single people only earn benefits based on their own incomes over their working years, spouses can claim some benefits based on their partner's earnings. If a higher-earning spouse dies, the widow or widower can opt to get the Social Security benefit of the deceased, instead of their own.
There's one not-so-small Social Security consolation for those who remain single into retirement. They can earn much more before their Social Security benefits are taxed. One more important financial thing that comes along when you tie the knot: liability. If your spouse declares bankruptcy, cheats on your t tax return, hurts someone in a car accident or a bar fight, or loses a lawsuit, your t assets could be at risk.
And if he or she racks up certain kinds of debt, creditors might be able to come after you to pay it off. But before you file for divorce or annulment based on the complicated information above, keep in mind that besides its personal and social benefits, marriage can offer other ificant financial protections in the future, such as no federal tax obligations in the event of your spouse's death.
And if you're married, you'll automatically inherit your spouse's assets, even if there's no legal will. You can count on your spouse's assets till death or divorce do you part. To get an insurance quote over the phone, call: Agents available 24 hours a day, 7 days a week!
How marriage affects insurance How does getting married affect taxes? You each keep your current plan. Your spouse s your plan. You your spouse's plan. Are the deductibles and out-of-pocket limits for the family plan embedded or aggregate? If one person in the family gets sick or pregnant, what deductible and out-of-pocket limits must they meet before the plan starts paying? Call now.Married new ti this
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Money and Marriage: How Getting Married Changes Your Finances