Rosemarie Cunningham, a Vineland, N.J., optometrist, likes her financial independence. In her 14-year relationship with Jim Rhodes, a 63-year-old pharmaceutical executive, they enjoyed weekends together, maintained separate homes, and never discussed money. They both paid their own way. Then Cunningham turned 65 and considered retiring in Wake Forest, N.C., where her adult son lives. The couple wants to share a household as retirees, so they sat down and exchanged tax returns and other statements. But they’re still debating marriage.
Rhodes was willing to tie the knot long ago; Cunningham, a veteran of two divorces, is wary of a legal tie. “We have shared the good and the bad and survived very well. I’d hate to put a jinx on it by getting married,” she said.
Concerns about finances have created new candor and caution among couples, especially in middle age. “The recession has forced people to think about practical matters and talk through potential problems,” said Stephanie Coontz, a professor at Evergreen State College and a historian of American marriage. “Financial reasons for accelerating a marriage, or putting on the brakes, are more on people’s minds than I can remember for the last 20 years,” said financial planner Cicily Maton, of Aequus Wealth, in Chicago. “It’s like going into business with a business partner.”
The marriage rate is at an all-time low; in 2009, only 52 percent of Americans age 18 and older told the Census Bureau they are married, down from 57 percent in 2000. The divorce rate has dropped, too. This may be because marriage provides some financial security in uncertain times, says W. Bradford Wilcox, editor of The State of Our Unions, an annual publication of the National Marriage Project at the University of Virginia and the Center for Marriage and Families at the Institute for American Values. “It's hard to say whether the number of people who marry for financial convenience will outweigh the number of people who postpone it out of financial anxiety,” said Coontz.
People of all ages are more likely to want partners with similar resources, says Betsey Stevenson, a professor at the University of Pennsylvania who has studied long-term marriage trends and their relationship to the business cycle. “If you envision your retirement as playing golf and lying on the beach, you don’t want to marry someone who will be working into old age.”
Financial advisors increasingly suggest forms of pre- or post-nuptial financial agreements for couples with debts, assets or children from previous marriages. “The prenup is the frame for discussions that may feel awkward or taboo,” said Maton. “I see it as estate planning with a twist.”
Veterans of divorce like Cunningham are especially nervous. In Cunningham’s second marriage, her husband developed heart trouble and she supported the household while he overspent, she says. On the advice of a financial planner, Paul White, in Gainesville, Va., she and Rhodes will establish a trust providing that if one dies, the other can live on the trust income. “I don’t want to eat cat food in retirement,” Cunningham said, though both she and Rhodes could easily support their own retirement with current savings. The principal in the trust will pass to their children from earlier marriages when the surviving partner dies.
Such trusts often stipulate that the surviving spouse can remain in the marital home, perhaps for a set number of years — or indefinitely — a key point when one partner is wealthier than the other. Kelly Campbell, a Fairfax, Va., planner, sometimes suggests that couples buy a life insurance policy naming children as the beneficiaries, allowing the surviving spouse to keep a house and savings. Planners should warn newlyweds not to expect a partner who hasn’t saved much by middle age to catch up, White says. Older couples also must bat out how much they’ll support adult children or aging parents in financial difficulty.
Benefits from earlier marriages can keep couples from tying the knot. Campbell says that in the Washington, D.C., area, he sees many couples who have a church ceremony but skip the marriage license because staying legally single lets them keep survivor benefits from a previous partner’s government pensions.
Debt is another reason to delay marriage. Nancy Bernaldo, a Monterey, Calif., planner, reports more couples choosing to pay off debt before they marry: One partner pays off debt while the other typically helps with household expenses. For those who marry someone with poor credit, Bernaldo recommends separate tax returns, bank accounts and credit cards.
Health insurance, by contrast, can be a reason to marry — or to avoid divorce. In a 2008 Kaiser Foundation survey, the authors state that “a significant number of Americans” who married in the previous year “considered health benefits, at least in part, in their decision.” Bernaldo cites clients in their 60s who met two years ago. The woman, a statistician, had $600,000 of equity in her home and $2 million in savings. Her prospective mate, a retired school teacher, had scant assets but had a pension and health insurance superior to Medicare. Bernaldo suggested a domestic relations contract that would give her the benefit of his health insurance but keep her assets separate.
Pressured by health costs, Michelle Lerner, 39, a self-employed lawyer married Gray Tuttle, a 42-year-old historian at Columbia University, in April, after many years together. The couple remained unwed even after she became pregnant with their son. But Lerner’s private individual health policy cost $600 a month for limited services, and a difficult first trimester left her unable to work. Marrying Tuttle would make her eligible for Columbia’s generous point-of-service plan, saving $354 a month and reducing their co-pays and deductibles. So they made a trip to New York City’s Marriage Bureau. “We knew we had to do it before I went to the hospital,” she said. “It was really just a financial issue.”