posted: Apr. 24, 2013 @ 2:58a
I apologize in advance for using an altID, but when I originally signed up for FW, I made the error of selecting a username that gives away my full name, and I don't want to link together my name, current/former addresses (thanks pipl), income, assets, etc. on a public forum. Plus this username was available.
Anyway, I am in a committed relationship where we are considering the option of remaining unmarried. For the record, we are still planning on getting (non-diamond) rings and having a reception/ceremony. It's just that we're also considering not signing any legal paperwork. We live in California.
The primary concerns here are the marriage penalty, how that will change in the future based on significant life changes (from what I've calculated, it only gets worse), and how to deal with any rights/benefits we give up by not getting married. It seems we just might be creeping into AMT territory as well. We're 31 and 28, and I expect our salary increases to outpace increases in the AMT deduction, etc., so AMT may matter even more as time goes on. Anyway, here is a snapshot of our current financial situation:
My income: $115k salary + $15k bonus + $25k stock options/RSU + $3k ESPP = $158k.
My investment income: $5k interest and dividends, also capital gains, but it's hard to predict what/when I sell.
Her income: $129k salary + $1k bonus = $130k.
Our retirement: I max out my 401(k) at $17.5k/year. She contributes 5% to a pension plan automatically. I believe she has some tax-deferred options available, but they're not set up (new job as of a few months ago). I'll go through her paperwork and make sure it's maxed out by the end of the year. (Also just learned about Backdoor ROTH -- will add this in, but I don't think it has any tax/marriage implications.)
Our assets: ~$750k, mostly in stocks or mutual funds, $25k of which is hers. About $150k of the total is in retirement funds.
Our debt: I have $16k of student loan debt @ 3% that I'm paying the minimum on.
We're currently putting aside $6k/month ($3k each) into a joint account as a down payment for a $1M+ home within the next few years. The rest of our finances are separate. We plan to solely rely on "new" money for any joint purchases and to not liquidate any of our existing assets to buy a home, etc. More to the point, if we are in still in the AMT bracket after purchasing a home (mortgage interest might help keep us out for a little while), we will not be able to deduct property tax if married. Additionally, in the future, we're also considering having children (1 or 2), which could mean HoH filing status if we were still legally single.
I want to establish a sort of checklist of things to consider that I may have not thought of already in my own external research and from extracting bits and pieces from various similar threads in the FWF archives. So far, this is what I've come up with for things that matter that we could take care of without immediately getting married:
And here's a separate list of items that seem to require marriage to obtain any benefits:
So that's about everything I've pieced together. I'd be really interested in seeing if I missed anything. And if you made it all the way to the end of my post, thanks.