Marrying for Money

Colleen Sheehy Orme
Bride in fur coat with orange bouquet and groomPhoto by Darya Sannikova

Would you marry for money?

Economics professor Laurence Kotlikoff advocates an exchange of rings.

"As an economist, I’m all for it: Marriage beats partnering long-term. I’m no expert on how to meet the love of your life; my goal is to make sure that you barter for a spouse or partner understanding the economic resources and financial obligations that you each bring to the table." 

Kotlikoff highlights four reasons money matters.

But they aren't necessarily what you think they would be. At the very least, they aren't on the typical wedding agenda next to flowers and photographer. Insurance, social security, divorce, and prenups seem to clash with venue and caterers.

Unless you're a finance guy.

In his CNBC article, "'Yes, marry for money': A top economist shares the surprising financial benefits of marriage," economics professor Laurence Kotlikoff has this to say.

"I’m not claiming that money is the only deciding factor in pairing up. For most of us, love transcends money."
"But we humans have the capacity to fall in love with lots of people. And there’s no shame in targeting your swooning on someone who can provide you with a higher standard of living."
"Put it this way: If two people are the same in most respects, except one earns twice as much as the other, don’t flip a coin. Go for the higher earner, and yes, marry for money. You won’t be the first to play the oldest financial trick in the book."

Yikes, Laurence tell it like it is!

But you're right, it is the oldest trick in the coupledom book.

Per the Los Angeles Times article, Weddings by the Numbers:

"The number of never-married adults has more than doubled since 1970. In 1996, 45 million adults age 18 and older had never been married, compared with 21 1/2 million in 1970."

But don't worry the exchange of vows and money is still alive and well. The LA Times article also reports:

"There are 2 1/2 million weddings in the United States each year."

The CNBC article echoes the same statistic via Wedding Report.

"According to the Wedding Report, there will be some 2.5 million weddings this year — the most since 1984."

Reasons to consider marrying for money:

Reason 1: Insurance savings

Reason 2: Social Security

Per Laurence Kotlikoff in CNBC's "'Yes, marry for money': A top economist shares the surprising financial benefits of marriage,"

"First, after just nine months, you’re eligible to collect future widow(er) Social Security benefits. Plus, after one year of marriage, you and your spouse are eligible to collect future spousal benefits. And if you stay married for 10 years, you’re eligible for divorced spousal and divorced widow(er) benefits."
"But, to be clear, with the way Social Security’s benefits formulas work, the spousal benefit will be useful only to spouses who earn very little in absolute terms and also earn a lot less than their marital partner. The widow(er) benefit, on the other hand, can be of tremendous value to the lower-earning spouse (or divorced person), provided the higher-earning spouse (or ex-spouse) dies first."

Reason 3: Divorce

Okay, this one seems a bit surprising but Kotlikoff says this:

"Marriage can also benefit your long-term standard of living, albeit to a highly imperfect and uncertain extent, if you’re awarded alimony in divorce."

This seems somewhat confusing since not all make out well in divorce. But if they do, what Kotlikoff says makes sense.

The Los Angeles Times article, Weddings by the Numbers references these divorce statistics.

"The number of divorced couples has more than quadrupled, from 4.3 million in 1970 to 18.3 million in 1996. Divorced couples represent 10% of adults. About 75% of divorced people remarry, and 60% of remarriages end in divorce."

It's evident despite the high divorce rates, many people do choose to remarry. It's safe to say companionship and financial security are certainly drivers of those numbers.

Reason 4: Prenups

In his CNBC' article, Kotlikoff doesn't mince words.

"My advice? When you kneel down and propose, take two things out of your pocket – a sparkling diamond ring and a leather-bound prenup, which will surely be worth far more than its weight in gold."

In this case, it sounds like the economist is talking more about the advantages of protecting your assets during marriage, not an outward benefit. He elaborates on the topic.

"It’s far better to negotiate in advance how things will be settled than have one party feel they have, in getting married, lost bargaining power in making financial decisions that could damage them in the context of divorce."

The New Yorker recently published an article, Prenups Aren't Just for Rich People Anymore by writer Michael Waters. The results reinforce the likelihood the average individual is increasing their desire for financial protection.

Water's cites the following statistics:

"Twelve years ago, a poll conducted by Harris Interactive (now Harris Poll) asked more than two thousand adults what they thought of prenups. Three per cent of respondents who were married or engaged reported having signed a prenuptial agreement. Recently, I asked Harris Poll for details about that survey, and the firm offered to pose the question again; this time, fifteen per cent of Americans who were married or engaged reported that they had signed one. According to the poll, nearly forty per cent of married or engaged people between the ages of eighteen and thirty-four have signed prenups, while just thirteen per cent of those between forty-five and fifty-four have done so. For those fifty-five and above, the figure is below five per cent. It’s a single poll, of course, but its findings reflected what I heard from multiple experts: more Americans, particularly younger Americans, are getting prenups. And one likely impetus for this change, according to those experts, is the historic levels of debt that many younger Americans have."

Insurance, social security, divorce, and prenup's.

They're definitely not the first things you think about when marrying unless you're an economist.

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Colleen Sheehy Orme is a National Relationship Columnist, freelance journalist, and former business columnist. She writes about love, relationships, and self-restoration. She has spent more than a decade in research and counseling on the topics of divorce, relationships, and Narcissistic personality disorder.

Reston, VA

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