Key Points
- Marriage can have financial implications for both LGBTQ+ and heterosexual couples. Understanding the financial pros and cons of marriage can help you decide whether marriage is the right choice for you as a couple.
- Tax, Social Security, and retirement benefits can all shift once you’re legally married, sometimes creating financial advantages, and sometimes drawbacks.
- Talking about money in a relationship may not feel romantic, but open, ongoing conversations are important for building a strong financial foundation together.
- Start money conversations early and revisit them often throughout your relationship to help stay aligned with your shared goals and values as your life and finances evolve.
Marriage can bring joy, partnership, and yes, financial implications. While money conversations aren’t the most exciting part of planning a life together, they’re some of the most important conversations to have for couples of all genders, backgrounds, and life experience, whether gay, straight, or somewhere in between.
Clients often ask me “should we get married?” and my advice is the same for couples of all orientations and identities: only get married if it makes emotional sense for your relationship. Once you’ve agreed it makes sense romantically, then it’s time to consider the financial implications together. With marriage equality currently in the law, many LGBTQ+ couples face a new question: “Just because we can get married, does that mean we should?” Understanding the financial benefits and drawbacks of marriage can help couples make informed decisions and spark open, honest conversations about their shared future.
Let’s explore the financial pros and cons of marriage, gay or straight.
Five Potential Financial Benefits of Marriage for LGBTQ+ and Straight Couples
1. Tax Savings
Married couples filing jointly often enjoy higher standard deductions and more favorable tax brackets. But the real advantage appears when couples have unequal incomes. Tax brackets essentially double for married couples in most ranges, meaning the higher-earning spouse’s income gets taxed at lower rates when combined with their partner’s earnings.
For example, consider a couple where one partner earned $200,000 while the other made $60,000. If they were single, the higher-earning spouse would fall into the 32% tax bracket. Since the couple is married filing jointly, their combined $260,000 income puts them in the 24% bracket. This is a substantial savings that falls into the “pro” side of marriage.
It’s not uncommon for clients to consult us about the benefits versus costs of tying the knot. As their financial advisor, I will assess their finances to determine if filing jointly as a married couple could save them a meaningful amount of money in federal taxes annually versus filing separately as single filers. Armed with this information, and first agreeing that it’s the right move for their relationship, I’ve had clients who have felt empowered to say “I do” and save on taxes.
Working with a financial planner in situations like these can be helpful in feeling confident in making decisions about your financial future. If you’re looking for a financial planner who can help with financial planning and values-aligned investing who is experienced in working with individuals and couples of all genders, identities, and backgrounds, learn how Abacus can help or schedule a call here.
2. Enhanced Social Security Benefits
Marriage unlocks Social Security strategies unavailable to single individuals. If one spouse expects their benefits to be significantly higher than the other’s, both may eventually collect based on the higher earner’s record.
The lower-benefit spouse can claim their own benefits first, then switch to spousal benefits when their partner begins collecting. Delaying the higher earner’s benefits until age 70 can maximize payments for both spouses and increase the eventual survivor benefit.
3. Insurance Cost Reductions
Many insurance companies offer better rates to married couples for auto, homeowners, and other policies. Insurers tend to view married couples as lower risk, often resulting in meaningful premium reductions.
However, this isn’t universal – so it’s important to be honest with your current or future spouse about things that could impact your finances. For example, a history of driving violations or a low credit score might mean you’ll end up paying more in auto insurance premiums.
4. Access to Workplace Benefits
Married couples often gain access to their partner’s employer benefits if they have them. If your own employer offers limited benefits, you’re between jobs, or you’re out of the workforce all together, you may be able to join your spouse’s health insurance, participate in a retirement plan, or take advantage of other perks if you’re married to your partner.
For military families and certain organizations, marriage can also open the door to additional benefits and discounts that may add up to impactful savings over time.
5. Expanded Retirement Savings Opportunities
Married couples gain additional retirement savings flexibility through spousal IRAs. If one partner in the marriage has little or no income, the working partner can contribute to both their own IRA and a spousal IRA for their partner.
For 2025, this means a couple could add $7,000 to an IRA for the non-working spouse. (The number jumps to $8,000 if they’re 50 or older.) Over 20 to 30 years, these additional savings could help boost the couple’s retirement wealth.
Advice from professionals you can trust.
Five Potential Financial Challenges of Marriage for LGBTQ+ and Straight Couples
1. Potential Tax Increases for Married Couples
Yes, we mentioned earlier that marriage may mean a lower tax bracket. But it doesn’t always lead to tax savings. Couples with similar high incomes may face a “marriage penalty” if they are pushed into higher tax brackets than they’d experience by filing separately.
Additionally, not all deductions double when you’re married. And some deductions phase out at lower income levels for married couples, potentially reducing overall tax benefits.
Thankfully, there are professionals willing to dive into this equation for you. Consider talking with a financial planner or tax advisor to help you crunch the numbers.
2. Impact on Student Loan Payments
If you’re on an income-driven student loan repayment plan, marriage can increase your monthly payments. Lenders may use your partner’s income to calculate your payment, even if they’re not legally responsible for your debt.
You can file taxes separately to avoid this, but you’ll lose other marriage tax benefits. You might want to consider moving to a fixed payment plan if student loan increases would be significant.
3. Insurance Premium Increases
While many couples see insurance savings, others face increases. Auto insurers typically assume married couples share vehicles, so they automatically add both spouses as covered drivers. If one partner has a poor driving record, your premiums could rise substantially.
Most insurers allow unmarried couples to share policies or add each other as drivers, so marriage itself may not provide unique insurance benefits.
4. Credit Score Complications
Your credit scores don’t unite when you do. But if you apply jointly for credit, one spouse’s financial history could reduce how much you’ll be able to get.
Lenders typically pull scores from the “Big 3” credit bureaus Equifax, Experian, and TransUnion for both spouses, then use the lower middle credit score from both applicants. For example, if your scores are 740, 720, and 705 while your spouse’s are 610, 595, and 580, lenders will use 595 for joint applications. This could mean significantly higher interest rates or even loan denials.
5. Divorce and Asset Protection Strategies
While none of us go into marriage thinking about a possible divorce (at least, we hope not), current statistics show approximately 40-50% of first marriages end in divorce. And second marriages face divorce rates as high as 67%. Some studies have also reported higher divorce rates among lesbian couples than gay couples and different-sex couples. It’s important to note that many factors can influence data and that individual relationships are unique, so approach statistics like these with compassion and understanding.
The reality, though, is that divorce proceedings can be financially devastating, often costing tens of thousands in legal fees. Divorcing couples may also have to split retirement accounts and other financial assets, leaving some partners with less money for their later years.
Prenuptial agreements aren’t romantic, but they can protect both spouses, especially those who come into marriage with substantial assets.
Should You Get Married? Weighing the Financial Pros and Cons
Money conversations may be difficult, especially when you and your partner have differing values about money or come from different financial backgrounds. But these conversations are important for building a strong financial foundation together.
Our advice is to start these conversations early in the relationship, and revisit them regularly to make sure you and your partner are still on the same page. We also recommend working with a financial planner who can help guide the conversation and make sure your financial plan addresses both you and your partner’s current and future needs.
Schedule a call with an Abacus financial planner to explore how marriage can impact your finances whether you’re gay or straight.
Marriage and Money Frequently Asked Questions (FAQ)
Yes. Following the Supreme Court’s 2015 ruling on marriage equality, same-sex couples who are legally married receive the same federal financial benefits as opposite-sex couples, including tax advantages, Social Security spousal benefits, and access to retirement accounts.
Couples should consider talking about taxes, retirement savings, insurance coverage, credit scores, debt, and estate planning prior to getting married. It’s also wise to discuss prenuptial agreements. Early conversations help prevent surprises and align financial goals.
Prenups aren’t just for couples with large assets. They can help clarify financial expectations, help protect both partners in case of divorce, and simplify estate planning. An Abacus financial advisor can help couples understand how a prenup may impact their financial future. Explore working with Abacus here.
Look for advisors who explicitly state their commitment to serving LGBTQ+ clients, or who are members of LGBTQ+ friendly organizations. Asking about a financial planner’s experience with marriage equality, adoption, and estate planning for LGBTQ+ couples and families can help you find a trusted fit.
Abacus Wealth Partners is a fee-only, values-aligned financial planning and investment management firm that serves individuals and couples, including LGBTQ+ clients. Our financial advisors, who are CERTIFIED FINANCIAL PLANNER® professionals, can help provide guidance on marriage, taxes, retirement, estate planning, and other financial considerations while prioritizing your values and long-term goals. Learn more about how we help couples from all walks of life align their money with their values.
Start early and approach it as an ongoing dialogue rather than a one-time discussion. Begin with your shared goals, values, and current financial situation. Using worksheets, budgeting tools, or a financial advisor as a neutral guide can help make the conversation easier and more productive.
