Same-sex couples take a $500K lifetime hit
They face higher costs from taxes and insurance and lower benefits from Social Security than their heterosexual counterparts.
One of the two high-profile, same-sex marriage cases argued before the U.S. Supreme Court this week highlights the federal Defense of Marriage Act, or DOMA. This law defines marriage as the union between a man and a woman and denies married gay couples from receiving federal recognition and benefits.
But the actual case in question before the court focuses on estate tax.
Edie Windsor is contesting the estate taxes she had to pay after her partner, whom she married in 2007 after a 40-year engagement, died in 2009. "I brought my case against the government because I couldn't believe that our government would charge me $350,000 because I was married to a woman and not to a man," she recently said on CNN Radio.
Along with the cultural and societal issues stirred up by the same-sex marriage debate, there's an undeniable economic factor: Gay marriage would afford same-sex couples the same financial benefits available to many straight couples.
And those benefits can be significant.
One economist has tallied up the lifetime costs for same-sex couples unable to marry legally at around $500,000 per couple. According to ABC News Radio, professor Lee Badgett, director of the University of Massachusetts at Amherst's Center for Public Policy and Administration, says the costs of denying a gay couple a legal marriage add up across a variety of long-term financial fronts -- including health insurance, Social Security and retirement benefits, and federal income and estate taxes.
Badgett told Bloomberg TV that same-sex couples are much more likely to be uninsured than their different-sex, married counterparts. At the same time, they're likely paying higher taxes and are denied benefits like Social Security if one partner dies.
Some businesses are already extending benefits to same-sex domestic partners. In 2011, the Bureau of Labor Statistics reported that 33% of state and local government workers and 29% of workers in the private sector, had access to health care benefits for unmarried, gay couples. And Poltico says those figures increase to around 50% when you factor in workers in larger businesses.
"On one level, the disparities are shrinking as more employers offer health care benefits to same-sex domestic partners," Badgett told Politico earlier this week. "On another big level though ... that extra taxation probably discourages some couples from signing up a partner for financial reasons, leaving them uninsured and vulnerable."
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You don't have to sign up for Medicare. The catch? If you don't enroll when you're first eligible, you could pay some serious financial penalties later in life.
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