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Will Saying “I Do” Affect Your Saving?

The single-married divide is dramatic: single adults between the ages of 22 and 35 are far less likely to have retirement savings accounts than are married people their age.

This difference, which is most pronounced for women but also true for men, highlights a conflict between two mega-trends.  The number of single Americans has surged to nearly 100 million – 43 percent of the adult population. Yet they are less likely to save at a time that all young Americans face greater responsibility for funding their own retirement than any prior generation.

About 22 percent of single women have employer-sponsored retirement accounts, compared with 44 percent of married women.  For single men, only 28 percent have employer accounts, while 44 percent of married men do, according to a February paper in the Journal of Marriage and Family by researchers at the Social Security Administration (SSA).

“By highlighting the link between marriage and retirement savings in young adulthood, our analysis identifies an often-overlooked economic outcome related to marriage,” SSA researchers Melissa Knoll, Christopher Tamborini, and Kevin Whitman write.  Data for their sample of 3,894 people came from the Federal Reserve’s Survey of Consumer Finances in 2001, 2004, and 2007.

They controlled for income, education and other demographic factors known to impact savings behavior, but they can’t explain everything.  They don’t know precisely why married people save more and offered a few solid theories in their paper, “I Do … Want to Save: Marriage and Retirement Savings in Young Households:”

  • Money: if both spouses in a married couple work, they can pool their income and share household expenses, freeing money for savings.  Conversely, it can be tougher for single people to save if they’re paying all the rent – rather than half.
  • Psychology: the “long-term commitment implied by marriage” suggests that individuals who are in a marriage are better at envisioning their old age.
  • Marriage as Community: having a “joint stake” in their future may encourage couples to save.

Another aspect of psychology is whether people are “future focused,” they said, but it’s unclear whether married or single people are most influenced by this  – and how.  Future-focused individuals may be the type to more naturally marry and make future plans with a spouse, such as creating a family.  However, singles often delay marriage or never tie the knot because they are focused on creating a secure career.

The paper contains more subtleties – for example, the share of non-married, cohabitating couples with retirement accounts falls somewhere in the middle of singles and marrieds.

Full disclosure:  The opinions and conclusions expressed are solely those of the blog’s author and do not represent the opinions or policy of the Social Security Administration or any agency of the federal government.

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