Tying the Knot and Doubling the Nest Egg: Retirement Perks of Saying 'I Do'
Marriage isn't just about love and companionship; it also comes with a host of financial perks, especially when it comes to planning for retirement. Let's explore how saying "I do" can enhance your golden years with some delightful tax benefits.
1. Spousal IRAs: Boosting Retirement Savings Together
Even if one spouse isn't earning an income, marriage allows for contributions to a Spousal Individual Retirement Account (IRA). This means the working partner can contribute to an IRA on behalf of the non-working spouse, effectively doubling the family's retirement savings potential. For 2025, each spouse can contribute up to $7,000 to their respective IRAs, totaling $14,000 per couple. If you're both over 50, you can each make an additional $1,000 catch-up contribution, bringing the total to $16,000.
2. Higher Income Limits for Roth IRAs: Expanding Eligibility
Married couples filing jointly enjoy higher income thresholds for contributing to Roth IRAs. This means you can continue to invest in these tax-advantaged accounts even at higher combined income levels. For 2025, the income phase-out range for Roth IRA contributions is $236,000 to $246,000 for married couples filing jointly, compared to $150,000 to $165,000 for single filers.
3. Social Security Benefits: Maximizing Your Payouts
Marriage opens the door to several Social Security strategies:
Spousal Benefits: A spouse can claim benefits based on the other's work record, receiving up to 50% of the partner's benefit if it's higher than their own.
Survivor Benefits: If one spouse passes away, the surviving partner can receive the deceased spouse's full Social Security benefit if it's higher than their own, providing financial stability during a challenging time.
4. Pension Perks: Ensuring Lifetime Income
Many pension plans offer survivor benefits exclusively to spouses. By being married, you can ensure that pension payments continue to support the surviving partner, providing a steady income stream throughout retirement.
5. Health Savings Accounts (HSAs): Doubling Down on Tax Advantages
Married couples with high-deductible health plans can contribute more to their HSAs. For 2025, the family contribution limit is $8,300, compared to $4,150 for individuals. HSAs offer triple tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-exempt.
Final Thoughts
While love forms the foundation of marriage, the financial benefits, particularly concerning retirement planning, are substantial. By understanding and leveraging these advantages, married couples can build a more secure and prosperous future together. As always, it's wise to consult with a tax and financial advisor to tailor strategies to your unique situation and ensure you're making the most of the benefits available to you.