Regardless of your age, if you’re in a committed relationship or married, both of you should participate in planning for your financial future and be aware of the benefits that come from being a couple. Here are four financial planning benefits you may receive as a couple:
When you file as “married or filing jointly” both partners can take advantage of certain deductions. These include child tax credits, adoption credits, tuition and fees tax deduction for college students through the American Opportunity tax credit, and child and dependent care credits.
Married couples filing jointly can have double the income of a single filer and remain in the same tax bracket until they reach the highest bracket. They can earn as much as $81,050 together and qualify for a marginal tax rate of 22%. A single person earning just $86,375 (roughly $5,000 more) would fall into the next bracket up, with a marginal tax rate of 24%.
The second of the financial planning benefits; two incomes are better than one when qualifying for a loan. You may be eligible for a more significant loan amount with better terms with a combined income. Of course, lenders take into consideration both credit scores in their decision.
Shopping for better health insurance options and rates through assessing both employer’s health insurance can save couples money when choosing their best option- single, single plus dependent, or family plan options.
Although being a couple doesn’t ensure positive financial outcomes, the likelihood of weathering an economic fallout from job loss or poor health decreases when having a second income to rely on.
When couples fall into arguments regarding money and investments, it’s generally due to lack of participation and having the same awareness of their finances. Both partners are encouraged to offer input and ask questions.
Couples should meet with their financial professional at least yearly, ask questions, and make decisions together. It’s critical to pick a financial professional that wants involvement from both of you, regardless of sex. If both partners can’t be at the meeting, rescheduling is often the best option. So that both understand their investments and are fully committed to their financial success.
Statistically, one partner will outlive the other. With both partners involved, there’s a better chance that the financial plan will continue. By providing for one partner’s living expenses and retirement through life insurance.
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In addition, JP Williams is the Founder of Pillar Wealth Group who lives and works near Columbus, Ohio. JP founded Pillar Wealth Group with over 17 years of experience and specializes in financial planning, retirement planning, investment management, risk management, college planning, and estate planning. Contact us today to get started with your financial wellness journey. Contact us today to schedule an introductory meeting!