In this space, I often note that advisors are not therapists, but there are elements of family therapy and psychology in being advisor.
Think about it. Assuming the relationship with a client is long-lasting, an advisor can be part of that client’s life through a variety of life events and milestones, including getting married, job transitions, buying a home, having children and, unfortunately, divorce.
Advisors know all too well about that oft-cited statistic that half of marriages end in divorce. That’s likely one reason some clients are reluctant to consider matrimony in the first place. Plus, clients in younger demographics are delaying major life milestones and marriage is on that list.
What’s interesting about younger generations’ views on marriage is that, while their reluctance to tie the knot has validity, they’re overlooking some tangible financial benefits that come along with matrimony. Of course, advisors should not overtly tell clients to get married or divorce, but they can help clients see the benefits in the former.
Marriage Offers Important Financial Benefits
Some clients have matrimonial trepidation. As a result, they aren’t thinking about the various financial benefits that come along with getting married. Saving on insurance costs is a prime example.
“One benefit of marriage is the potential for reduced insurance costs,” notes Nationwide. “If both spouses work and are eligible for health insurance plans, once married they can decide which plan works best for them. Moreover, spouses typically have rights to family benefits on many insurance policies, including life, auto, and home insurance, often resulting in lower premiums.”
Taxes, arguably everyone’s least favorite thing and the most desired avenue through which to recognize savings, is another area in which married couples benefit relative to single counterparts.
“Marriage can also bring about significant tax advantages for some couples,” adds Nationwide. “They can choose to file jointly, which often results in lower tax rates and access to various tax credits and deductions. Additionally, married couples have higher income thresholds before they reach higher tax brackets. Generally, filing taxes jointly can result in greater benefits for your clients than if they filed as a single person, but this will depend on their specific situation.”
Marriage Matters in Retirement, Social Security
Being married also offers clients clear perks when it comes to retirement planning and Social Security. Obviously, if both spouses are working, they can significantly boost allocations to retirement accounts and when the time comes, in essence “double” what they get from Social Security.
Those are obvious benefits, but many clients likely aren’t aware of some the retirement advantages afforded to married folks. Social Security is a prime example.
“When it comes to Social Security, a couple generally has more options and strategies to maximize their benefits compared to an individual. These benefits can play a crucial role in your clients’ retirement planning. Spouses can claim benefits based on their partner’s work record, which can be advantageous if one partner has earned substantially more over their career,” concludes Nationwide.