Tying the knot? Don’t tie yourself in financial knots.
- Open a dialogue covering everything from money personalities to long-term goals.
- Take advantage of marital benefits including getting the best insurance coverage and best tax rates.
- Taking a new name? Update all documents and certificates from your passport to your Social Security card.
Getting married can mark an exciting time in your life. However, married life is different from single life in a number of ways, including financially. Consider these three money moves when getting married to make the most of your new life (and tax) status!
It may come as no surprise that money is one of the most common reasons that couples argue. Nearly every big decision has a financial component, and when you and your teammate aren’t on the same page, that can spell trouble. How can you be sure you and your spouse are in agreement when it comes to money?
The first step is to open a dialogue and ask the right questions. How your partner answers the following can give you a look inside how they think about money. Ask these questions:
- What is your earliest memory related to money?
- How was money treated in your household growing up?
- If you had $1,000 today, what would you do with it?
- What are your five-year financial goals?
If asking the above questions point blank is too difficult, consider approaching the topic in a different way. Taking an online quiz about money personalities can be a great way to learn more about your partner’s financial attitude without being confrontational. By taking a virtual quiz, you can learn more about your partner’s, and your own, financial attitude. Many websites offer money personality quizzes, so your first step toward financial collaboration is just a search away.
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When Americans get married, they unlock a suite of benefits which are not available to individuals. Married couples can legally act as a family unit, and take advantage of certain benefits.
Upon marriage, many Americans are eligible to enroll in their spouse’s group health insurance family plan. Consider factors of coverage, deductible, and cost when choosing between two insurance plans, and understand that the most effective cost approach may be to stay on separate plans. Many employers will reopen enrollment for their plan based on a life changing event, such as marriage. This means that for a special enrollment period following marriage, the newlywed couple can ditch one spouse’s insurance plan and both be covered under the other spouse’s plan. Be aware that enrollment periods are only open for a limited window, so the chance to enroll in your spouse’s coverage won’t last long!
Uncle Sam also affords taxpayers who are married, and filing jointly, some advantages. Those taxpayers with the status of Married Filing Jointly (MFJ) have access to tax benefits including higher income thresholds and higher deductions. However, it should be noted that those married individuals who elect to file separately are subject to some of the highest tax rates allowed by the IRS. As always, consult your tax advisor for more information.
When it comes to changing your legal name, make sure all of your documents stay up to date. Important legal documents including your passport, driver’s license, and Social Security card need to be updated to reflect the change.
Updating your Social Security information is one of the most important things to do when your legal name is changed. Failing to do so can delay or affect your benefits upon collection. Luckily, the Social Security Administration makes updating your information a breeze with its online portal. Simply navigate to the SSA website and answer a few questions to update your information.
Your legal name is only one of the many things that change when you get married. Make the most of your newlywed status by coordinating money attitudes and taking advantage of financial benefits, too.
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