Why older couples are living together, skipping marriage

Sharon Epperson | Sunday, 8 Jun 2014 |

Many baby boomers already know a thing or two about marriage and are choosing not to tie the knot on their relationships—often because of money.

U.S. Census Bureau data shows adults older than 50 are among the fastest growing segment of unmarried couples in the U.S.

Financial advisors say concerns about debt, benefits, taxes and cash flow are often the primary reasons they decide not to walk down the aisle.

"The biggest considerations couples have in deciding whether or not to remarry usually center around their children and assets," says Molly McCormack, a director of individual advisory services at TIAA-CREF.

If you're divorced and chose to remarry, you could lose alimony, pension and Social Security benefits from your former spouse. If you're widowed, you could also lose survivor's pension benefits, McCormack says.

Some couples may also want to make sure inheritances go to their own children and don't get muddled.

A partner may also be helping out adult children financially—by paying off student loans or cosigning on a mortgage—and the new partner doesn't want to take on that financial burden. In addition to mortgage, student loan and credit card debt, long-term care and medical debt are frequent concerns.

Under the law in "community property" states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—most debts incurred by one spouse during the marriage are owed by both spouses.

Many higher income couples also don't want to face a bigger tax hit. Getting married could throw them into the highest tax bracket which would result in a much higher tax burden.

But when two people live together, money matters can be murky. Financial advisors say it is important to make expectations clear.

• Be specific with one another about expenses and who will pay for what. Determine what is yours, mine and ours.
• Make sure assets are properly titled, including the home you live in and other property and/or small businesses.
• Have a will, health care proxy, and power of attorney for finances. If you want your partner to have certain assets or to have control over your medical care or finances, if you are unable to do so, you must have in writing in the proper legal documents.

"Make sure you communicate your wishes in your estate plan with your children too," says New York-based financial advisor Stacy Francis. "Avoid any surprises."

Most important, whether you choose to say "I Do" or not, make a vow to always be financially independent.