After the Dress and Cake: Hidden Expenses of Tying the Knot

Source: Thinkstock

Source: Thinkstock

The marriage rate in the United States is decreasing — and based on the laundry list of financial downsides to tying the knot, it’s not hard to understand why. Part of the fiscal strain it produces is in the area of college and careers — and the main problem is that marriage results in costs to the couple and the family across the board, without regard for the details.

As in the example Economics 21 provides, after a mother of two marries, she faces considerably less financial aid for her daughter’s college education regardless of the fact that her husband has his own children to care for. A married couples also deals with changes to their taxes after nuptial bliss sets it. With statistics showing a significant wage gap for women, it’s notable that after some women marry higher earners, their own pay becomes taxed at the rate of their spouse, making their take-home that much worse, and reducing their work incentive considerably. In that way, marriage exacerbates the pay gap issue and represents a major disadvantage to dual career households considering marriage.

There are tax advantages to marriage as well, it’s important to note. Back in 1996, the U.S. Congressional Budget Office examined the marriage penalty, and found that 51 percent of those who married saw a bonus in their taxes, with 42 percent seeing penalties. Perhaps revealing to a degree where some problems lie, though, the report noted that, “Couples with incomes between $20,000 and $50,000 were somewhat more likely to receive bonuses than to incur penalties,” and visa versa. Unfortunately, it is the couples that slip through the “somewhat more likely” who see fiscal disadvantage from marriage.

Interestingly, MSN Money reports that these penalties are actually more common in couples with similar income levels, while those with uneven incomes find themselves with greater penalties, finding this to be true regardless of income level.

Still, advantages can include social security from one’s spouse, survivor benefits, lower insurance rates, inheritance despite the lack of a will, tax-free spouse healthcare benefits, and estate tax reduction for married individuals, according to MSN. On top of that, the standard deductions you are allowed as a taxpayer increase for married individuals, and selling a home can be more profitable tax-wise for those who are married and avoiding a capital gains tax.

While marriage can offer advantages — such as adding spouses or children to insurance plans — it sometimes results in cutting out much needed government aid like food stamps and healthcare subsidies.

According to the Centers for Disease Control and Protection (CDC), marriage rates have been steadily declining for a while now, and in 2011 reached a rate of approximately 6.8 out of ever 1,000 individuals, a significant decrease even just from 2000 when it was at 8.2 out of every thousand. In May of 1997, the marriage rate was at 10.3 out of every 1,000. The divorce rate seems to be making something of a comeback after lagging during the economic recession, which made separation too expensive for many. In 2012 it reached approximately 2.4 million, rising for the third consecutive year, according to Bloomberg.

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