It turns out that being married can help people build wealth and avoid poverty better than staying single, especially as they grow older. This information comes from a new research.
In the United States, even though many people do get married before they retire, there’s a noticeable trend of more individuals choosing to stay single. While only 4% of people over 75 have never been married, this number goes up to 8% for those between 65 and 74, and 13% for the 55 to 64 age group.
Aging alone brings its own set of financial challenges. The research shows that, on average, married folks have higher incomes and net worth and are less likely to experience poverty compared to people who are divorced, widowed, or have never married.
The study focused on this by tracking over 5,000 people in Wisconsin from young adulthood into their senior years and was exclusively about white individuals.
Why Marriage Can Mean More Money
Deborah Carr, who led the study, found that married people do better financially in various ways—including income, wealth, and lower chances of being poor. This remains true even after considering personal differences like health, personality, and education levels.
One of the most striking findings was how single men faced more financial difficulties compared to their married counterparts. Single men earned significantly less and had a higher rate of poverty.
Living alone means dealing with life's costs on your own—everything from housing to personal care when sick could end up being more expensive because you don't have a partner to share expenses with.
Moreover, being married offers legal and financial benefits, like Social Security benefits based on a spouse’s earnings, and possibly less workplace bias.
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Divorced individuals also face financial hardships, with the impact being particularly tough on women’s finances. Carr pointed out that the sacrifices women often make for their families and marriages can financially hurt them if the marriage ends.
The Importance of Financial Planning for Singles
For people who've never married, it’s crucial to start planning for their financial future early on. Surprisingly, many people don't. Financial expert Annamaria Lusardi emphasizes the importance of making financial planning a habit.
She also suggests improving financial literacy to make smarter money decisions, mentioning that women, in particular, could benefit from this due to lower financial literacy levels that could make divorced or widowed women more vulnerable financially.
Working as long as possible can also be part of the solution, contributing more to retirement plans and taking advantage of employer benefits. Planning how to spend and conserve your wealth into old age is essential too. And don’t forget about community resources that can save you money.
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Building a Social Network Is Key
Developing a strong network of relatives, friends, and community connections is crucial, especially if you don't have a spouse or children. These relationships can provide a form of support that might otherwise need to be paid for, emphasizing the importance of social capital.
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