Managing Finances Alone

Presently, about 45 percent of Americans 18 and older are single, whether by divorce (24 percent), widowhood (13 percent) or never married (63 percent). Of all the adults currently unmarried, 18 percent are age 65 or older.1

When it comes to money management, there are both pros and cons to being single. Without a partner to rely on, you must learn how to budget and manage your money on your own. This is a valuable skill that you can improve throughout your life. You also have a greater degree of control over your money since you’re the only one deciding how to spend discretionary funds.

As for earning more throughout your career, staying relationship-unencumbered allows you more career mobility; you can pursue higher-paying or better career advancement positions in other locales without concern over a partner’s job or career aspirations. From a tax perspective, you can avoid the “marriage penalty,” which can occur when two incomes combine to tip married couples into a higher tax bracket.2

However, there are other financial perks you miss out on when you’re single: Having the possibility of two incomes within one household and the opportunity to build assets through the use of those two incomes.3 Overall, as a single person, your cost of living may be more because it’s generally cheaper for two people to share household expenses such as a mortgage, utilities, cable, cellphone plans, etc.4

Saving for retirement can be challenging even for married couples. The thing to remember is that most couples experience some span of time during retirement when one spouse is single. It can be particularly difficult when that person is a woman because:5

  1. She is likely to have earned less income than her spouse during her lifetime
  2. …therefore she is likely to receive a lower monthly Social Security benefit
  3. …and to have accrued less in a work-sponsored retirement or pension plan
  4. She may receive reduced or no pension benefits once her husband dies
  5. She is more likely to live longer than her husband
  6. …therefore she is more likely to need long-term or nursing care

To help single people adequately prepare for retirement, Helaine Olen, co-author of the finance book, “The Index Card: Why Personal Finance Doesn’t Have to be so Complicated,” suggests trying to save between 10 and 20 percent of your income and working with a financial advisor who adheres to the fiduciary standard.6

Back to Articles

1U.S. Census Bureau. Aug. 25, 2016. “Unmarried and Single Americans Week: Sept. 18-24, 2016” Accessed Sept. 8, 2016.
2Antonia Farzan. Business Insider. June 22, 2015. “A financial planner explains why she chose not to get married – and it has to do with taxes.” Accessed Sept. 19, 2016.
3Amy Livingston. Money Crashers. Nov. 24, 2015. “Financial Benefits of Marriage vs. Being Single – What’s Better?” Accessed Sept. 8, 2016.
5Sharon Epperson and Laura Sanicola. CNBC. March 22, 2016. “Retirement may be dicey for single women.” Accessed Sept. 8, 2016.
6Alyssa Oursler. USA Today. May 25, 2016. “Retirement planning for singles can be extra tough.”

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