The number of unmarried couples who are living together during retirement is growing. Over 7.5 million unmarried couples live together in the United States and many of those couples have already experienced divorce and the accompanying property division. While the desire to cohabitate while unmarried seems like a choice that will keep things simple, living together while unmarried can present financial planning complexities. The financial complexities can be even greater in retirement.
One retired unmarried couple who live together and have been together for 13 years say it took a lot of time to build trust over finances. The 71-year-old man said he was way too cautious in the beginning and wanted to divide everything 50-50. Today, he and his 69-year-old partner each take care of their personal expenses and debt and use a shared credit card for purchases they make together.
Even though the number of unmarried couples living together has increased over the last ten years, the financial and legal protections for unmarried couples living together are few. Financial advisers say unmarried individuals living together should build their own financial safety bulwark. Couples should figure out what their expenses are and then decide who will pay for what expenses. Couples should also decide whether they will share accounts or property.
Once those items are resolved, individuals should save because individual retirement and insurance plans may not cover their unmarried partner. Finally, individuals should not become entirely financially dependent on their partner. As one CPA puts it unmarried couples should create individual retirement plans and then share expenses.
Source: USA Today, "More unmarried couples living together in retirement," Sharon Epperson and Karina Frayter, 4/10/11