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Cashing In on the Marriage Advantage

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A new report from prominent data scientists indicates that a single fateful decision between the ages of 25 and 34 can result in accumulating nine times the net worth of similarly aged Americans who ignore or delay that step.

In a study reported by Julia Carpenter in the Wall Street Journal, Lowell Ricketts of the Institute for Economic Equality of the St. Louis Federal Reserve Bank emphasized the value of marriage for young people striving to build up their assets and achieve long-term prosperity.

The financial advantage for married people goes well beyond the value of romance and companionship and family formation, especially in a time of rampaging inflation when double incomes and shared responsibilities make it far more feasible to pay bills and invest for the future.  “This 25-to-34-year-old age is a time of transition, it’s a time of household formation and I think it matters whether or not you can pool your financial resources with someone else,” Ricketts observes. The decision to undertake a lifetime joint venture at a relatively early age means a much greater concentration of wealth and lower levels of punishing debt.

As couples marry later in life, due largely to additional years of educational commitment, the number of sole-person households has grown steadily, meaning more unattached people are confronting multiple economic challenges totally on their own. Over forty years, the number of single-person households has nearly doubled, meaning the postponement of “money milestones” that represent a handicap that couples don’t generally share.

The most significant of those elusive money milestones is, of course, home ownership; for most Americans, the value of real estate comprises a disproportionate segment of their net worth, particularly at a time of dramatic increases in home prices nearly everywhere in the country. Home values are up 44% over the last two years, according to the brokerage firm Redfin Corporation. The experts indicate that this long-term inflation makes even smaller starter homes less accessible to single adults; couples enjoy an obvious edge in accumulating the funds for a down payment by combining their resources and citing dual incomes to qualify for mortgages at beneficial terms. Particularly at a time of worrisome inflation, a couple can save money by sharing expenses on everything from transportation to utilities to food and entertainment.

In addition to these strictly financial benefits, a functional marriage provides additional and deeper rewards. A partner can provide unique support in times of illness or career reverses, and a couple can share efforts in focusing on long-term goals.

The wealth gap that separates thriving Americans from those multitudes who struggle daily just to pay their bills, stems in large part from accidents of birth and head starts provided by well-to-do or highly educated parents. But data for generations indicates that individual decisions made in the early years of adulthood can also play a significant role in building wealth. Our financial fate is never entirely out of our hands, and recent data should encourage more of us to cash in on the marriage advantage.

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