Some people get married later than others because they're busy getting degrees or advancing their careers. Others simply don't meet the right person right away. No matter your reason for getting married later than most, there are certain benefits to waiting. You'll have had more time to build up some savings, establish a career, and decide what you really want out of life going forward.
But while there are some perks to holding off on marriage, there are also a few key challenges to consider.
1. You may have less time to save for retirement
A recent report from the Economic Policy Institute confirms that single people tend to have less retirement savings than married couples. And it makes sense. Single folks don't have someone else to share major expenses with, like rent and utilities, so it stands to reason that they don't have as much money left over to put toward retirement. Meanwhile, married folks can not only split the bills, but also take advantage of each other's workplace benefits, which can free up even more savings. Therefore getting married later in life could mean missing out on years of combining expenses and socking away money for retirement.
Say you and your spouse each spent $1,200 a month on rent before you were married. Once you're able to combine that expense, you could conceivably free up that same amount each month. Even if you decide to upgrade to a better space and spend $1,800 a month on rent as a married couple, you'll still save $600 a month, or $7,200 a year, which you can invest for retirement. If you then have 25 years to grow your nest egg, assuming your investments generate an average yearly return of 6% (which is conservative for a stock-heavy portfolio), then you'll have an extra $419,000 by the time you retire thanks to cohabitation.
2. Mingling your assets could get complicated
The more time you spend in the workforce, the more likely you are to have accumulated substantial assets. But things could get awkward -- and expensive -- if you and your partner each have assets you want to protect.
Typically, any asset you own before tying the knot is unquestionably yours, which means you're entitled to it in full in the event of a divorce. The laws get more complicated, however, if you live in a community property state and need to divvy up the assets you and your spouse obtain during marriage.
Most states use what's known as the "common law" system of dividing property, which means that assets are divvied up based on how they're documented. So if you buy a car and your name alone that appears on the title, then that vehicle is yours. But if you live in a "community property" state, things work differently. If you buy a car with money that either you or your spouse earned during your marriage, then that car is considered community property, regardless of which spouse's name is on the title.
Fortunately, prenuptial agreements can pre-emptively determine ownership of the assets you each bring into the marriage and acquire as a couple.With a prenup, however, you can designate specific property that you buy during marriage as separate.
Prenups can also help protect spouses from taking on each other's pre-existing debt. Creditors can sometimes attempt to satisfy debts by going after community property, even if the debt in question was incurred by only one spouse before the marriage. With a prenup, you and your spouse can often prevent this from happening.
The cost of a prenuptial agreement starts at around $2,000, but the more complex your situation, the higher those legal fees are likely to climb.
3. You're already set in your (financial) ways
The longer you wait to get married, the more rigid you're likely to be about certain aspects of your lifestyle, from how you like your living space arranged to which side of the bed you sleep on. But being set in your ways could also cause financial turmoil if you and your spouse have different views on money. Let's say you're a spender and your spouse believes in saving every last dime you possibly can. It might be even more difficult to reconcile those differences if you've each spent the past decade functioning as a financially independent adult. And since money is a leading cause of divorce, the harder it is for you to meet in the middle, the greater the risk to your marriage.
Of course, couples who marry later on aren't the only ones who face challenges. Many people who get married straight out of college see their fair share of trials and tribulations. So before you bemoan the fact that you lost out on several years of savings opportunities, remember this: As in many other areas of life, the grass might appear greener on the other side, but there's also a chance that it's equally littered with weeds.
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