The Financial Benefits to Saying “I Do”
August 16, 2021Building Your Future
Picture this: The love of your life gets down on one knee, pulls out a sparkling ring, and suddenly, you can hear wedding bells. Your happily ever after is about to come true…
But did you know? There are more advantages to getting married* than having a live-in companion or a guaranteed date at future events. There can be a financial benefit to tying the knot, and we’re about to tell you about it.
*Some of the benefits listed below also apply to common-law partnerships, but be sure you meet the government definition of “living common-law” before you start celebrating.
EMPLOYEE HEALTH BENEFITS
Let’s say you don’t have any health coverage, but your soon-to-be-spouse does. In most cases, they will be able to add you onto their employee plan, sometimes for a minimal cost. You know what that could mean? Having some (or all) of the cost of your yearly RMT, physiotherapy, or acupuncture appointments covered, help paying for those expensive glasses you need replaced, or partial or full reimbursement for dental work. Depending on your spouse’s plan, you could be looking at yearly savings in the hundreds or even thousands.
If both of you have health benefits through your employer, you may be able to coordinate your plans, potentially topping up the amount that may only have been partially covered before. A good example of this are prescription drug costs. Your plan may only cover a certain percentage, but with access to your spouse’s benefits, a remainder (or a good chunk of it) may now be paid for! This can become even more beneficial when you have a family – because two plans are better than one when it comes to supplementing more costly health expenses, like braces or vision care, that may be needed down the road.
Quick tip! Many plans make it a rule to add a new spouse within a certain timeframe, so be sure to check with your provider ahead of time so you don’t miss out. And of course, all employee benefits plans are different, so be sure to read the fine print to understand how to make the best use of yours.
As you begin to consider merging your finances, it’s a good idea to book a financial needs analysis to discuss your budget and the type of insurance products that can protect your financial future in case of the unexpected. From making sure your home is paid for in the event of your death, to giving a future baby the gift of life insurance, purchasing the right insurance as newlyweds could mean lifelong protection in the event of critical illness or disability, or if you lose your spouse too soon.
We get it – the last thing you want to think about is your fiancé(e) dying. But let’s reverse things for a moment. If you knew you could protect your partner in the event of your death, would you even hesitate? Purchasing life insurance can mean you or your spouse will receive a lump sum (i.e., a single payment that amounts to the current value of the policy) if one of you were to pass.
This is money you can put towards funeral expenses**, medical and estate bills, and even a debt that hasn’t been paid off. Your spouse could also choose to use the money received as income replacement – to maintain their current standard of living at the time of your death – which is especially important if you’re planning on having children. They wouldn’t have to worry about having enough money to pay the bills, save for retirement, or provide the kids the quality of life you both dreamed of.
The truth is, life insurance is really about living life to the fullest – without wasting a single moment worrying about your loved ones’ financial future.
**A funeral in Canada can cost as much as $20,000 (source).
Once you are married, speak with your accountant about filing joint tax returns. There are typically some cost savings for claiming multiple tax benefits, and things like combining medical expenses or charitable donations could help decrease your amount owing or work to increase your tax refund. Be sure to ask your accountant about other potential savings opportunities, like claiming a spousal tax credit or using spousal RRSPs.
There you have it. There are many reasons to celebrate your engagement. And while the wedding of your dreams may end up costing you a small fortune, remind yourself that you can (hopefully) earn that money back over the years… thanks to the financial benefits of saying “I do.”
This blog post contains general information only. Because each person’s situation is unique, it is best to speak with a qualified professional before making any final decisions. FaithLife Financial does not advise clients on tax, accounting, or legal matters.
Original article written by Susan Goldberg for AdvisortoClient
- Starting to Plan
- Building Your Future
- Preparing for Retirement
- Living in Retirement
- Action Teams
- Protecting Financial Futures
- Living Generously
- Member Stories
- Financial Fitness
- Building a Better World