Should You Wed or Cohabit in Retirement? The Financial Tradeoffs to Weigh

Run the numbers before you marry. Staying unmarried may be the smarter financial move.

Choosing whether to marry later in life is not only a personal decision — it is also a major financial one.

For couples in their 50s and 60s, a marriage certificate can quickly change how the government, tax system, and healthcare rules treat their assets. Unlike younger couples, who are often focused on combining bank accounts, older partners must also navigate Social Security rules, Medicare-related costs, and estate-planning complications.

If you are comparing the financial pros and cons of marriage and keeping separate legal identities, it helps to look closely at the tradeoffs. Here is a breakdown of the key issues as retirement nears.

The upside of marriage

Marriage comes with important legal protections and wealth-transfer advantages that are difficult to duplicate through private agreements alone.

Social Security benefits

One of the biggest financial advantages of marriage is access to spousal and survivor benefits. In a married couple, the lower-earning spouse may receive up to 50% of the higher earner’s benefit, even without having worked enough to qualify on their own.

Just as important, when one spouse dies, the survivor may receive 100% of the deceased spouse’s monthly benefit, as long as it is higher than their own. Unmarried partners do not receive anything from a partner’s Social Security record.

Note for divorced spouses: If your prior marriage lasted 10 years or longer, you may be eligible for benefits based on your ex-spouse’s record. Remarrying usually ends that right, which could mean a substantial loss if your former spouse had a much higher benefit.

Pensions and estate planning

If either of you has a traditional defined-benefit pension, marriage is often the only way to secure survivor benefits. Many pension plans do not allow payments to pass to an unmarried partner after the retiree dies.

Marriage can also protect wealth from taxes after death. The federal estate tax includes an unlimited marital deduction, which allows you to leave any amount to a spouse without federal estate tax.

The federal estate tax exemption is $15 million per individual, so a married couple can protect $30 million. In addition, if a spouse dies without a will, state intestacy laws generally direct assets to the surviving spouse. Unmarried partners have no automatic standing in those situations.

The case for living together

Even with those advantages, merging legal lives later in life can create serious financial downsides, especially when healthcare costs and taxes enter the picture.

Long-term care

If one partner eventually needs nursing home care, marriage can put the couple’s combined assets at risk. To qualify for Medicaid long-term care support, applicants must usually spend down their assets to nearly nothing. Married couples are treated as a single financial unit.

Although Medicaid rules for spousal impoverishment let the healthier spouse keep some assets — up to about $162,000 in 2026 — the rest may still need to be used for care. If the couple remains unmarried, their finances stay separate, which can protect the healthier partner’s savings from medical expenses.

Medicare surcharges and taxes

For couples with similar high incomes, marriage can create a penalty. That is especially true for Medicare Part B and Part D premiums, which can rise because of the Income-Related Monthly Adjustment Amount, or IRMAA.

In 2026, single filers face IRMAA surcharges once income goes above $109,000, while married couples hit the threshold at $218,000.

For example, if one partner earns $105,000 and the other earns $115,000, only the higher earner would be subject to the surcharge as a single filer. But if they file jointly, their combined income of $220,000 would exceed the married threshold, triggering higher Medicare premiums for both spouses.

Whatever your overall Medicare costs turn out to be, this surcharge can significantly reduce savings.

Debt liability

If your partner carries heavy credit card balances, has poor credit, or faces tax liens, marriage can make your finances more complicated. You do not automatically inherit a spouse’s old debt, but once you mix money in a joint account or buy property together, your assets may become more exposed to creditors.

When the outcome is less clear

The tax code does not always favor or penalize marriage; the result depends on the difference in income between partners. If one person earns much more than the other, marriage can often produce a tax advantage. Filing jointly may allow some of the higher earner’s income to fall into the lower earner’s tax brackets, reducing the couple’s total tax bill.

But if both incomes are similar, combining them can push the household into a higher bracket or increase capital gains taxes. The only way to know for sure is to compare both scenarios using your own tax returns.

Create a safety net if you stay unmarried

If you decide the risks of marriage outweigh the benefits but still want a legal recognition of your partnership, it is wise to set up protections in advance. Without a marriage license, you do not automatically have the right to make medical decisions or inherit property.

• Cohabitation agreements: Put in writing how household costs will be shared and what happens to jointly owned property if the relationship ends. Without this, you could face a fight over assets or risk losing your home if you separate.
• Beneficiary designations: Make sure retirement accounts, life insurance policies, and bank accounts name your partner as beneficiary if that is your intention. These designations override a will and avoid probate. A will is simple and inexpensive to prepare, but it can still provide important clarity.
• Power of attorney (POA): Set up both a financial POA and a healthcare directive. That gives your partner authority to handle bills and medical decisions if you are unable to do so.

Let the math guide the decision

Deciding whether to marry or live together later in life takes hard, practical calculation. The rules for Social Security, Medicare, and estate taxes are strict, and a mistake can cost hundreds of thousands of dollars.

Before you decide, consider speaking with a fiduciary financial advisor to review your tax situation and make sure your legal arrangement supports your long-term security. If either of you has more than $100,000 in savings, getting professional guidance is especially wise. SmartAsset offers a free service that can match you with a vetted fiduciary advisor in less than five minutes.