Matt is a graduate of the University of California, San Diego with a BS in Mechanical Engineering. After 10 years as an engineer, Matt decided to pursue a long-held passion and shifted his career to finance. He attained his CERTIFIED FINANCIAL PLANNER™ designation and the Accredited Investment Fiduciary designation. Prior to becoming a fee-only advisor [...]

Matt Balderston, CFP® discusses how marriage affects your finances. It’s important to consider taxes, IRA & Roth contributions, employer/employee benefits, beneficiaries, Social Security benefits and inheritances once you get married.


“Hi, I’m Matt Balderston, CERTIFIED FINANCIAL PLANNER™ with Pure Financial Advisors, and this is the Question of the Week. This week’s question is about what financial impacts you have when you get married.

Let’s start with taxes. When two people get married, if one person has a much larger income than the other, you might actually save a quite a bit of money on tax by filing a joint return. When you’re single, you go through the tax brackets very quickly, but when you get married and file a joint return, those lower brackets double so so much more of that higher income earner’s income is going into those lower brackets; you can save potentially thousands. If both people make about the same money, then it doesn’t have much of an impact, you double the income, double the brackets, and it all kind of comes out the same. If you do have that person that makes a lot less income or no income, make sure you don’t miss out on IRA and Roth contributions because that person who doesn’t earn anything can actually qualify for the working spouse’s income and a lot of people miss that opportunity and go years without contributions that they were eligible for.

Another topic is employee benefits or employer benefits. When you get married, you do qualify for those under your spouse’s employer, health insurance, life insurance, that kind of thing. So make sure that you kind of compare if you’re both working, which one might be better. Also pay attention to whether or not they pay for your spouse’s or family’s premiums. Some companies only pay for the employees, so it might be better for both of you keep your own plans so that they’re both being paid for.

Another thing to think about (this is a more somber note) is estate planning. When you do get married, make sure you change your beneficiaries on your life insurance, 401(k)s and IRAs right away. There are all sorts of stories of people that forgot to do that, and they pass away prematurely and their parent or their sibling or maybe an ex actually gets the inheritance and you definitely don’t want that to happen.

Also, you qualify for Social Security benefits for being a spouse, and you also qualify to pretty much give everything that you have to your spouse estate tax-free. If you’re a really high net worth individual though, you still might want to have a trust to avoid some estate taxes, but that kicks in at around $5.3 or $5.4 million.

The final thing is if someone inherits an IRA or a 401(k) or a Roth, if it’s a spouse they can actually take it as if it has always been theirs, and do their distributions based on their life expectancy and so on, as opposed to an inherited IRA that has different rules. They’re even talking now about shortening how fast you have to take that out, so that’s a really big benefit for a lot of married couples.

Hopefully you learned a couple of things from this, and until next time, I’m Matt Balderston, and this has been the Question of the Week.”