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Ask the Retirement Expert: What Should Same-Sex Partners Know Financially Before Getting Married?

Amy Jamrog, CLU®, ChFC®, CASL® •  January 22, 2016 | Your Finances, Home and Family, Ask the Expert

Each week our Northwestern Mutual retirement experts answer your questions. This week’s question:

My same-sex partner and I are considering getting married now that it is federally recognized in our state. Is there anything special we should know before we do?

By Amy Jamrog, CLU® ChFC® CASL®

Amy has been a Wealth Management Advisor with Northwestern Mutual since 1999. She has achieved company, industry and community recognition since her first year in business. Over the past 16 years, she and her Team have developed a specialty in helping baby boomers with retirement income planning.

Yes. Once you tie the knot, you’d immediately be eligible for some spousal benefits that you would otherwise not qualify for as single people. For example, Social Security and pension spousal benefits would apply to you. You’d be eligible for non-taxable spousal rollovers of your retirement accounts (401(k), 403(b), IRA) which could save you thousands of dollars down the road. You might be eligible for additional employee benefits, health insurance and other benefits. For estate planning purposes, being married means that you have certain rights regarding medical and financial decisions you can make for each other, but you would still be well advised to have formal health care and financial powers of attorney to verify those rights.

Combining your income on a joint tax return might put one or both of you into a higher tax bracket, which is something to be mindful of. If you currently qualify for a Roth IRA as a single person, being married might put you into a combined income bracket that would disqualify you from making future Roth IRA contributions. Your married status could also limit some other tax deductions and could even put you into an alternative minimum tax AMT situation. If there are children involved (especially if you have children from a previous relationships), be mindful that, for single parents, some colleges require only one parent’s financial information; but if you are married then both spouses are required to disclose. This could significantly impact a child’s financial aid opportunity.

All romance aside, it’s very important to consult a tax advisor and work with your financial professional to look at the big financial picture before leaping into marriage.

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