Dotty Scott has lived with her boyfriend for 10 years, but the couple nixed any notion of nuptials about eight years ago when they realized that by marrying, Scott’s daughter, now 14, would no longer qualify for her state’s health insurance program. Further, marriage would mean that Scott would be bumped from her low single, head-of-household tax status and she would pay more taxes. “Financially it makes more sense to remain single,” says Scott, 42, a web designer in Vancouver, Washington. Scott’s relationship decision is far from unique.
As couples get older and their lives more complicated, they often choose to postpone or forgo subsequent marriages, regardless of their feelings toward their romantic partner, since being legally married often comes with a financial slap, says Fred Silberberg, a Los Angeles divorce lawyer. “In second marriages I see people being very strategic about their financial situations—much more so than in first marriages,” he says. “More and more I see couples choosing not to get married to save money.”
To wit: The U.S. Census Bureau reports that the number of people remarrying after divorce has been steadily declining for the past 10 years, and a recent Pew Research Center survey found that 78 percent of divorced and widowed people either don’t want to remarry or aren’t sure about it.
Here are some financial considerations to mull before jumping the broom for a second time:
How will marriage affect your child support or alimony payments?
In most cases, alimony payments cease once you remarry (though in some states, cohabitation can put an end to this income). And depending on how your state calculates child support, your ex may get to pay less if your household is supported by a new spouse.
Will your child qualify for less financial aid if you’re no longer a single parent?
Since college financial aid is calculated based on your income and assets, remarrying could drastically reduce your son or daughter’s financial aid package.
Jennie Phipps’ husband asked her to marry him when her oldest son was finishing his junior year in college, where her single-parent status helped him qualify for a handsome package. She had a frank discussion with the school’s financial aid adviser who suggested she wait to wed until her son’s last aid award had been approved and the bill for his final semester had been paid. “So that’s what I did,” says Phipps, 59, a freelance writer who lives in suburban Detroit. “We lived together for about six months and had a wedding in January after the last bill was paid.”
Can you afford to retire if you remarry?
If your later years are dependent on income from an ex’s Social Security or pension income, do your research, says Lisa Decker, a certified divorce financial analyst based in Atlanta.
Many pensions disqualify a divorced spouse from receiving payment once they remarry. And be sure to carefully consider your situation, as you are entitled to half of your ex’s Social Security benefits if you were married at least 10 years and his or her Social Security benefit is larger than yours. If you have more than one ex-spouse, you can choose to claim the Social Security payments of the one with the largest benefit. However, if you marry before age 60, you must automatically take the Social Security benefit of your current husband or wife—even if the monthly payments are smaller than that of an ex to whom you were married for a decade or more.
In that case, it may behoove couples to postpone marriage until age 60. “You give yourself the benefit of choices by waiting until age 60,” Decker says.
Can you qualify for a mortgage to buy a home for your new combined family?
Suzanne Cramer, a certified credit counselor with the debt relief service CareOne, found out the hard way that her second husband’s poor credit and credit card debt meant that they did not qualify to buy a home big enough for both of them and their respective children. “We decided to purchase a larger home, but we couldn’t get approved for a mortgage because he had made two late payments and had a lot of personal debt from before I met him,” says Cramer, 34, who lives in York, PA. She could not qualify for a bigger home on her own. The marriage lasted less than a year.
Emma Johnson lives in New York City, where she writes about the intersect of money and life. She is a contributor to coupon site RetailMeNot.com.