Love, Marriage, and Finance Later in Life
While getting remarried later in life doesn’t usually warrant the same guidance and counseling as it did when you were young, marriage is still a big decision and shouldn’t be entered into lightly. It is especially important to consider the financial aspects, as they are likely very different from those of young couples just starting out. Saying “I do” later in life comes with a list of critical financial considerations, some of which may mean you no longer qualify for income/benefits. Here are a few things you should consider before you plan your ceremony and honeymoon.
Social security provides a number of retirement benefits, some of which are impacted by your marital status. In addition to the regular social security income that is based solely on your earnings record, you may also be eligible for:
- Supplemental security income. (SSI)
- Widow/widower benefits.
- Divorced widow/widower benefits.
- Divorced spousal benefits.
To qualify for these other benefits, you must meet the specific requirements set by the administration.
Supplemental Security Income (SSI)- The Supplemental Security Income program gives monthly payments to both adults and children who have a disability, are blind, or are over 65 years old and have limited income and resources. Since these benefits are based on your assets and income, remarrying would potentially provide you with more and may change your eligibility or reduce your benefit.
Widow/widower or divorced widow/widower benefits- Widowers, even if you divorced, are also eligible for social security benefit payments. The rules to receive those benefits get tricky though if you remarry. The benefits will be based on the age you remarried. If you remarry before age 50, you will not be entitled to a widows or disability benefit unless you divorce. If you remarry between 50 and 59, you can’t get benefits unless that marriage ends, in which case you may be eligible for benefits from your prior deceased spouse’s earnings record. If you remarry after the age of 60, then you may still be entitled to benefits from your prior deceased spouse’s social security earnings.
Divorced spousal benefits- Divorcees are likely aware that you may file for social security benefits, including on your spouse’s earning record, as early as age 62. Generally, if you remarry though, you will not have access to benefits based on your previous spouse’s earnings record.
Survivor Annuities and Pension Benefits
Until the last 20 years, most public service pensions discontinued survivor annuities upon remarriage and even cohabitation. Fortunately, as life expectancy and society have changed, reforms have been implemented. The unfortunate part is these rules are specific to your public service profession and leave some people still vulnerable. It is essential to understand the regulations that apply to you so that you don’t end up with a bill for payments made after you remarry. You can find details here.
Even if you do not intend to include your new spouse in your will, saying “I do” will automatically entitle them to a share of your estate in most states. Many states provide one-third to one-half of your assets to your spouse upon death. Working with an attorney can help you sort through the options. For example, if you move into your home, and would ultimately like your children to inherit it but don’t want your new spouse to be out on the street if something should happen to you; a trust could be established with language to allow for a life estate enabling them to stay in the house. Once the surviving spouse dies, the house would pass to the original owners’ heirs. A prenuptial agreement may also be an option.
Later in life, long-term care considerations can come into play. The cost of helping with daily living activities can be overwhelming. Determining how you and a new spouse would handle the costs of care is prudent. Trusts and prenuptial agreements may document your plan to pass your assets after you have passed, but they don’t necessarily protect them from long-term healthcare needs. Remember that Medicaid eligibility considers your spouse’s income and assets even if living trusts and prenuptials are in place.
While I am a romantic at heart and want to believe love conquers all, my financial knowledge tells me you better know what “I do” means before you tie the knot. Finance is a big part of any marriage, regardless of your age. It is also tricky; working with a professional can help you navigate the rules and help you assess what type of planning may need to change.
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