And they lived happily ever after — because they were more likely to own a home and save and invest than their single friends.
Marriages don’t always come with fairy tale endings, but they do come with some serious financial advantages, says a new survey from TD Ameritrade. And that’s going to be a challenge for Americans, who are flying solo in greater numbers than ever before — about 42 percent are single, up from 39 percent a decade ago.
“While an increasing number of Americans are finding that remaining single can have its virtues, there is one key area making the single life potentially more difficult — money,” says Lule Demmissie, TD Ameritrade’s managing director of retirement and long-term investing.
TD Ameritrade’s poll of 2,000 people age 37 or older, half of them married and half single, highlights the financial stress points and suggests some simple ways singles can level the playing field.
How do we know singles are worse off? To begin with, they say so: Only 29 percent rate themselves as very financially secure compared with 43 percent of married folks.
A look at their paychecks and bank accounts backs them up. Single people make about $8,000 less than their married peers when it comes to annual income, $52,900 vs. $61,700.
Forty percent spend their entire paycheck each month and don’t sock away any savings, a rate slightly higher than their married counterparts. Fewer — 27 percent vs. 39 percent — have emergency backup funds. And more single people (30 percent) than married ones (17 percent) admit to not saving for anything.
Finally, singles are much less likely to own a home than married couples — 58 percent vs. 90 percent.
Buying a home with your spouse or even just your partner creates an economy of scale.
The median household income for partnered adults is $86,000, while for someone going it alone the household income is closer to $61,000, according to Pew Research Center. And it’s cheaper when two people are splitting the utility bill, the insurance bill and all those bills that come with living somewhere. All this savings can then be redirected to things like retirement.
The solo flyers aren’t hitting home runs for retirement, either, when compared with their hitched counterparts.
Saving for retirement? Forty-four percent of singles are doing it, but 63 of their married peers are.
Expect to be very secure in retirement? Thirty-four percent of singles do compared with 52 percent or married folks. Almost half (46 percent) of singles are worried about running out of money in retirement, versus 38 percent of those who are married.
And 36 percent of singles want to fully retire but believe they won’t be able to afford it. Only 29 percent of married people feel the same way.
Navigating life’s daily finances is easier when there are two of you. Married couples can split the mortgage, benefit from insurance discounts and get tax breaks for filing jointly.
But the system still can be finessed. Experts advise…
- Save for retirement early.
- Get a roommate or move in with a relative to cut housing costs.
- Set up an emergency fund now.
- Ever heard of buddy dieting? Well, try buddy budgeting by recruiting a friend to keep your spending in check.
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