Marrying Money: Big Day, Big Hit to Your Retirement

Photographer: Reinar Rivera/Getty Images

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Photographer: Reinar Rivera/Getty Images

Nearly 300,000 U.S. couples will get married this month. With a $30,000 average tab, the highest since theKnot.com began its annual wedding survey in 2007, that’s north of $8 billion spent in June alone. If everyone projected to get married in 2014 splurged like that, the 2 million or so events would cost $63 billion.

Honeymoon not included.

Those large and growing wedding tabs help explain the healthy business in wedding insurance. They also make a compelling case for an unheralded long-term retirement savings strategy: Elopement.

Start with opportunity cost. A 50-something couple who pay for a child’s wedding are kissing away far more than the bride. A $30,000 tab spent today could be $62,000 of much-needed retirement security 15 years from now, assuming a 5 percent annualized return.

To be fair, the Wedding Report, statistics-keeper of all nuptial cost minutiae, showed that in 2013 parents footed the entire bill for just 14 percent of weddings. It's still the parents of the bride that most often kick in for wedding costs -- 61 percent of them did in 2013. But 41 percent of the groom's parents also contributed, so parents of teenage grooms-to-be may want to start saving now. (The report did not specify the dollar amount, nor the proportion of costs, that parents contributed.)

Eight in 10 brides and grooms contribute to wedding expenses -- the Wedding Report estimates they kick in about half of the cost. Nearly 30 percent of couples used an existing credit card to cover some wedding costs in the latest survey. Another 7 percent got a new credit card just for the occasion and 9 percent took out a loan.

A back-of-the-envelope calculation shows the potential cost of doing that. Start with $10,000 put on a credit card charging 15 percent interest. That debt would take more than 12 years to pay off, even if the couple decided to make payments of 4 percent, or $400, rather than the actual, lower minimum payment due. Interest costs would add nearly $4,500 to the total wedding cost.

Say a 30-year-old couple decide to skip a big-ticket wedding that they would have helped finance. They could allocate the amount they'd have paid to the credit card company, $400, to fund two Roth IRAs ($200 monthly deposits for each). The accounts would grow to more than $39,000 apiece after 12 years, assuming a 5 percent annualized rate of return. If the couple never made another contribution after year 12 and kept the money invested for another 25 years to age 67, they’d have more than $130,000 each in tax-free Roth accounts.

There’s not a lot of romance in opportunity cost calculations. But setting yourself up to save more than a quarter million in tax-free dollars down the line is a pretty appealing prospect. And being parsimonious on the wedding may help couples avoid one of marriage's biggest stress points -- fighting over money.

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