Marriage
combines the two most lethal human desires - emotion and money! Below are some delightfully new positions for
a newly married-couple-to-be to consider, most of much greater importance than
a 1 hour (okay, I’ll be honest… 45 min) sweaty, naked romp on satin sheets!
Position
#1: Much has been made of America's 50%
divorce rate, but experts say there is little statistical truth to it. In fact, it seems this ‘statistic’ is mostly
considered folklore. According to the
U.S. Census Bureau, a more accurate rate is 36%, which applies to both men and
women between ages 50 and 69 who have been divorced at least once in their lives. Good news?
So
you want to get married… the odds of achieving marital bliss seem at least
somewhat in your favor.
Position #2: According to the website costofwedding – on average – U.S.
couples spend $25,631 per wedding. Spending $25,000 to throw a party for a few
hours, allowing for a few members of your family and friends to celebrate your
wedding, therefore seems to be the norm.
This is just plain stupid, especially since most young people cannot
afford $25 K, and because many of their baby-boomer parents are already broke
and not making good provision for their own retirement!
Based on some superficial
Internet research, an average U.S. couple has a 57%
chance of seeing their 15th wedding anniversary. If they make it that far, most will reach
"til death do us part." $25,000
invested in boring Dow stocks at an average 10% annually (including reinvested
dividends) would be worth almost $200,000!
Doesn’t that make more sense than a 4-hour wedding reception?
Fire the wedding planner and hire a financial planner instead!
Position #3: Getting
married,
all on its own, is full of financial surprises.
For people considering marriage these days, including gay couples, there's a
new one challenge: falling into the net of the Fed’s dreaded Alternative Minimum Tax (or AMT).
What's more, the AMT
hits married couples particularly hard. For example, for the 2011 tax year 6.1%
of married couples were required to pay the AMT (according to an estimate by
the Tax Policy Center, a joint initiative
of the Urban
Institute and Brookings Institution). In addition, married couples are nearly six
times as likely as single taxpayers to trigger the AMT.
The AMT hurts
newlyweds for a simple reason: The typical
deduction limits for couples, are less than double those for single filers. That bite often comes on top of the marriage
penalty under the ordinary tax.
Most financial
advisers will confirm that clients don’t even ask for an AMT calculation before
planning a wedding – maybe it’s time to start!
I’ll conclude with this:
A recent “National Marriage Project” study conducted by the
University of Virginia highlighted the following observations:
- Rising consumer debt after a couple's wedding contributes to
the instability of unions among newlyweds.
- Couples with assets of $100,000 or more have lower divorce
rates than those with less money.
- Couples who reported disagreeing about finances more than
once a week were 30 percent more likely to divorce than couples who reported
disagreeing about finances only a few times a month.
Best of luck and success in finding your own most
comfortable and satisfying position, and married bliss happily ever after!
Disclosure: the author is long on long-term marriage, having enjoyed
more than 27 years of consistently good, positive investment return. Here's wishing the same for you, complemented
by financial freedom and security included in your own happily-ever-after investment!
