10/26/2012 2:30 PM ET|
Singles face more financial stress
The rules are often slanted toward couples, and maintaining a household while planning for retirement can be a bigger challenge on just 1 income.
Christina Campbell can easily list the ways that being single costs her financially: When she was self-employed, she paid more for her individual health insurance plan than if she were part of a couple or could have piggybacked on a spouse's plan. She also notes that her retirement savings options are more limited than they are for couples, who can contribute to each other's individual retirement accounts. "If I were to suddenly become unemployed, my retirement savings would certainly suffer in a way that they wouldn't if I had a husband," says Campbell, 38, who lives in Centreville, Va.
Campbell, one of the voices behind the pro-singles website Onely, points to a variety of other employer policies that give preferences to couples. Spouses often get bereavement leave for each other's close family members, while Campbell was unable to take leave for her uncle's funeral. She also couldn't add beneficiaries outside her family of origin to her insurance without taking out a separate policy.
As Campbell learned firsthand, single people face financial stresses that couples do not, and those can take a heavy toll, especially as they near retirement.. A new report from the MetLife Mature Market Institute and the Society of Actuaries found that single people feel more financial stress than couples do, and single women in particular say they have a harder time saving for retirement than married couples do.
Singles, in fact, reported the lowest income levels ($32,000, on average), asset levels ($110,000) and homeownership rates (43%), compared with other family structures. Just 17% said they believed they were on track to reach their retirement savings goals, and one-fifth had not yet started putting away money for retirement. Most single respondents said they worry about affording their living expenses and maintaining their standard of living in retirement.
Many of those financial stresses originate from having only one income to rely on, says MetLife Mature Market Institute's Sandra Timmermann. "Single people are more vulnerable than the couples who have double earnings," she says, adding that that's the case whether they have children or not. Single people also tend to earn less than married couples do, she points out, and on average, they have lower education levels.
The study, which surveyed adults from age 45 to 80, also found that couples were more likely than singles to have taken steps to pay off debt, met with a financial adviser and invested for retirement. "It almost seems that when you have a partner and somebody to work with, there is more of an incentive to do planning," says Timmermann.
The study comes at a time of peak interest in singles, given the country's shifting demographics. According to the Census Bureau, the number of single-person households has grown to 31 million, up 15% between 2000 and 2010. Meanwhile, husband-and-wife households are on the decline; they now make up less than half of total U.S. households. If singles aren't financially secure, a large chunk of the country isn't financially secure.
Still, despite the alarming findings, some singles say they're better off than they would be in a partnership, especially if their partner was less financially responsible. "It's far easier for me to save for retirement, because my money is my own and I can spend it how I want to," says Eleanore Wells, a singles expert and the author of "The Spinsterlicious Life."
Wells acknowledges that a second income from a partner might allow her to live in a "bigger, fancier apartment," the travel industry often offers couples' discounts, and wireless companies often give discounts for family plans, but otherwise, she says, being single doesn't impose too much of a financial burden. "I think the opposite is true. Some of my friends are married to delightful guys, but they're terrible money managers. . . . What I like about being single is that all my decisions are my own."
Single and looking to combat financial stress? Money experts and singles themselves suggest that you:
Build your support network. In addition to socking away money in her 401k and taking out long-term-care and disability insurance, Wells says, "I'm making sure I'm surrounded by friends and family who care about me, so when someone needs to take care of me, I'll have people to choose from."
Take savvy steps that apply to singles and couples alike. Save as much as possible, cut out frivolous expenses and plan for retirement early. All of these steps are beneficial, regardless of your relationship status.
Get a head start on retirement. MetLife notes that single people are highly concerned about retirement, but they are less likely than couples to have purchased retirement-related financial products. The company urges singles to save for retirement early, even if it's in small increments. Timmermann adds that women in particular should focus on retirement savings as early as possible, since women generally live longer than men.
Take advantage of employee benefits. While some policies might benefit couples more than singles, as Campbell found, others are equally useful to all eligible employees, such as 401k accounts for retirement savings and disability insurance. "So many people don't realize that if they don't put the maximum into their 401k, they won't get the full employer match," says Timmermann.
Fight for your rights. "Why should singles adapt their behavior to a system that discriminates against them?" asks Campbell. Instead, she says, "We should be fighting against the institutionalization of the married-is-better-than-single trope." She suggests challenging gym policies that offer cheaper memberships to couples, for example.
Take care of dependents. For single parents, arranging wills, trusts and guardianships for children is especially important. This might not directly help the parent's financial security, but it will have a big impact on children in the unlikely event of the parent's unexpected death.
But take care of yourself first. Timmermann points out that single parents often take care of their own children, including adult ones, while simultaneously caring for their parents. "Your temptation is to help them and help your grandchildren, but that could be detrimental to yourself," she says.
In other words, singles might have to work a little harder to look out for their own financial security.
More from U.S. News & World Report:
VIDEO ON MSN MONEY
The big break is, you don't have to split everything when you divorce, and no ridiculous lawyer fees. Well worth it!
I dunno. I have a lot more money now that I'm single that I did when I was in a relationship.
I remember waiting till the day before the mortgage was due to mail it, so it was postmarked before the due date, but wouldn't clear till after I got paid, all the time when I was with my ex.
Since she's gone, my bank account grows every pay day. My credit score is over 800.
There are a lot of things that suck about being single. But speaking strictly financially, being single has been a huge win.
i believe if your not married have kids u get no help or very little ..for many women dont get married simple fact to get free assistance while she still banging her boyfriend and saying she dont know who the father is ...just so they can get foodtamps and any other type of aid
I agree. If I chose to have kids, why should my neighbors property taxes fund my choice? They are subsidizing the schooling of my child. That doesn't seem right to me.
In that same avenue, why should I be paying for anything that I don't agree with? Females want breast screening exams....pay for it themselves. I pay for my prostrate exam.
I shouldn't have to fund Planned Parenthood. The list goes on and on. No welfare. No benefits unless you paid into it, and then your benefits are only the amount you put into the coffer. No piggybacking.
And a graduated tax structure? No way. Everyone pays 10% regardless of income. Don't like it? Get off the couch and work another job. Or maybe put down the damn beer and start trying to come up with a useful idea that society needs and rake in the money.
Sounds like a plan, Bill. Glad you posted such a liberal novelty.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON PERSONAL FINANCE
Your health may improve if you cut gluten out of your diet, but your pocketbook will take a hit -- unless you follow these tips.