When it comes to tying the knot, Americans are, increasingly, fashionably late. For various reasons, millennials are getting married later in life than prior generations did.
According to the Pew Research Center, the median age of women and men getting married for the first time is now 27 and 29, respectively. That compares to a median age of 20 for women and 23 for men in 1960.
Of course, not all late-life marriages are first marriages. Many people remarry following the death of a spouse or a divorce. According to Pew Research, about 53 percent of Americans ages 55 and older are remarried — in other words, on their second marriage or one subsequent to that.
And now that same-sex marriage is legal nationwide, greater numbers of gay people are getting hitched, or seriously considering it, after being single much of their adult lives, said Steve Branton, a certified financial planner who specializes in working with singles and unmarried couples, including same-sex partnerships.
Branton encourages older couples contemplating marriage, whether gay or straight, to "walk" rather than "run" down the aisle. That's because it's important for such couples to think through the financial, legal and other issues associated with late-life marriages, he said. If you are pondering a late-life marriage or have recently gone down that path, here are a few things to consider.
1. Marriage penalty or marriage bonus? Many older people are already in their peak earning years, which means they may face the so-called marriage penalty if they get hitched. The marriage penalty is an informal term to describe the income-tax hit faced by some married couples, particularly those comprised of two high-income earners. Such couples may owe more in income taxes than they would collectively as single filers.
Conversely, some couples — particularly those with very disparate incomes — are better off married from an income-tax standpoint, said Branton of Mosaic Financial Partners. He suggests unmarried couples do a pro-forma return to get a sense of what their income-tax burden would be as a married couple.
A prenup can discuss a whole lot of what happens if the marriage fails.Raydeena Jonescertified financial planner with Innovative Financial
"I worked with an unmarried couple who determined that the marriage penalty for them would be $20,000 a year, and they are three to five years from retirement," said Branton.
2. Think about your estate plan. Getting married gives your new spouse some built-in inheritance rights that may upend your estate plan. So advisors say it's important to review your estate plan after getting hitched to ensure that your assets are distributed according to your wishes after you die, particularly if you want to provide for children from a previous marriage or other types of relatives. If, for instance, you want to leave a retirement account to a niece or nephew, your new spouse will need to sign a notarized beneficiary form permitting that person to inherit the account, said Branton.
3. Be transparent about your finances. When you're older, you may have more in the way of assets and a higher income than someone in his or her 20s, but you may also have more financial baggage, such as obligations to a former spouse. To get off on the right foot, it's important for older couples who are contemplating marriage to be transparent with one another about their financial situations, said Lili Vasileff, a certified financial planner and divorce expert who is founder and president of Divorce and Money Matters.
She suggests sharing information on assets and debts and reviewing any divorce agreements, as well as credit reports and scores. If your betrothed has lousy credit or significant credit card debt, that will obviously impact your ability to do certain things as a couple, such as buy a home, said Vasileff.
Another issue older couples should discuss is how much to merge their financial lives, she said. After all, someone who has been handling his or her own affairs for many years may have a harder time compromising with a new spouse than a younger newlywed.
4. Consider a prenuptial agreement. It's no fun to ponder divorce when you have finally found your true love — perhaps the second time around — but some advisors strongly urge older engaged couples to consider a prenuptial agreement.
A prenup is a legal document that spells out how assets should be split up if a marriage fails or a spouse dies. Such agreements might address what happens to your interests in a business if you divorce or die. A prenup can also clarify your intentions when it comes to passing down assets to children from a previous marriage or to a favorite charity.
"In your will you can do a lot of these things, but a prenup can discuss a whole lot of what happens if the marriage fails," said Raydeena Jones, a certified financial planner and certified public accountant with Innovative Financial who works with executives and business owners. Some of her newlywed clients are pushing 70.
5. Consider the cost of long-term care. If you are getting married very late in life, there's a chance that you or your spouse will need long-term care during your marriage. According to Branton of Mosaic Financial Partners, the average stay at a long-term care facility is three years, and the price tag for that can be $200,000 to $300,000.
If your betrothed doesn't have that kind of money or long-term care insurance, you might end up footing the bill for their care someday. Medicare, according to Branton, only covers about 2 percent of the cost of long-term care. In addition, as a married couple, you may have to spend down your collective assets significantly before becoming eligible for Medicaid coverage, he said.
If you are thinking about marriage at an older age, "none of these things should be deal breakers," said Branton, "just considerations and issues to be dealt with."
— By Anna Robaton, special to CNBC.com
