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Who says single is better?

By Jennie L. Phipps · Bankrate.com
Wednesday, September 14, 2011
Posted: 4 pm ET

I have an ex-husband who spent every penny that he got his hands on, so I understand why 53 percent of married Americans and 69 percent of single people told Charles Schwab when it surveyed them that it is easier to do retirement planning when there is no spouse in the picture.

"It's all about wedded bliss," says Charles Schwab Minneapolis Branch Manager Brian Wagenbach. "If you have another person you have to consult, it makes things more difficult. If it's just you, you don't have to discuss it with anyone else. It's just easier."

It might be easier to make the decision to save, but the fact of the matter is that single people often don't save as much for retirement as married people do for the simple reason that they don't have as much to save. One income doesn't go as far as two. A U.S. Census Bureau study in 2004 found that the median net worth of married couples between the ages of 55 and 65 is $268,835. Single men of the same age had accumulated $69,350, while single women had only $62,140.

As Wagenbach says, "If two people can invest for 25 years and put away $500 per month versus a single who can put away $250 per month, the total net result is double. If you have a 7 percent rate of return, that result for the couple is over $400,000; for the single, the result is just over $200,000."

He also points out that a decade ago, returns on investments were substantially higher -- 10 percent or even 12 percent a year was a realistic goal. Today, an investor with a balanced portfolio is lucky to earn a steady 7 percent or 8 percent. "That's going to have an impact on your long-term planning," Wagenbach says." To meet your retirement goals at that rate of return, you have to have focus and discipline, and, especially if you're single, you probably have to start early."

And marrying the right person isn't such a bad idea either.

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2 Comments
Deadpool
September 19, 2011 at 11:51 am

Ah yes, more "married is better" propaganda.

Sorry, but it's not as black and white as that, Thyme.
I pay less for housing, utilities than a married couple with a house.

I live in an apartment with utilities included.
I don't have property taxes. I buy food solely for myself and don't have kids.

Forgive me, but where are all these extra costs coming for "legally single" people? Married couples who own a home... that alone can set them back between the mortgage, the utilities, the insurances, the property tax, etc...

And with marriage comes the risk of divorce, which could cost even MORE if you don't select the right person, which in America, you basically have a 50-50 chance of doing so... and an even higher chance of being in a marriage where you are unhappy or where the money set aside isn't equivocal.

Maybe I'm just an exception, an outlier, but I fail to see who two married people with a comparable income to mine and owning a house, would have more money "left over" than I did after incurring said expenses. Maybe I'm just a savvy saver, but add kids into the equation, and forget it.

Thyme
September 15, 2011 at 12:18 am

This article also does not account for the fact that singles pay a much higher percentage of their income for housing, utilities, property tax and other costs that marrieds get to share. This alone is huge savings that marrieds can put against their retirement.