September 13, 2012
Being single is the new normal. Today, only 51 percent of adults in America are married and nearly 30 percent of all households are solo – the highest level in the nation's history. The percentage of Americans living alone has doubled since 1960.
For the 102 million single people in America, which includes those who were never married, widowed or divorced, being single is about more than being foot-loose and fancy free, it also comes with a pricetag.
How Clinging to Mommy and Daddy Is Ruining a Generation
Singles spend a larger share of their budget on food, housing, taxes and health insurance than married couples, and contribute some $1.9 trillion to the economy each year, according to the Consumer Expenditure Survey. Increasingly, companies are targeting products and services to their needs, acknowledging them as a force to be reckoned with.
Here’s a look at the state of singles in America and the financial challenges they face:
There are 13.6 million unmarried parents living with their children—of these 10 million are unmarried mothers, 1.7 million are unmarried fathers, and 1.9 are unmarried couples with at least one shared child, according to the Census Bureau. Half of single mothers have an income of less than $25,000 —and their medium income is one third the median for married couple families, according to Legal Momentum. Only one-third of single mothers receive any child support, and the average amount they do get is about $300 a month.
Without a partner to share child care responsibilities with, many turn to daycare centers for help, but in 35 states and the District of Columbia, the average annual cost for center-based infant care was higher than in-state tuition and fees at a four-year public college, according to Child Care Aware of America’s 2012 report: Parents and the High Cost of Child Care.
“Single people have a tougher time preparing for retirement. Studies suggest that having someone else to plan with makes a difference,” says James Heafner, CEO of Heafner Financial Solutions. A 2011 Charles Schwab survey found that 85 percent of married Americans were saving for retirement, compared with 67 percent of singles.
That lack of preparation can prove costly come retirement, especially for women who live longer than men. “There will be no one else's IRA or 401(k), or pension to help out, meaning you have to live on your nest egg alone. You'll be relying on your own social security earnings record and not your spouses, and you'll likely be in a higher tax bracket throughout your life because you're single,” says Heafner.
A study by The Heller School for Social Policy and Management at Brandeis University, Living Longer on Less: The New Economic (In) Security of Seniors, found that only 16 percent of single seniors were economically secure, compared to 31 percent of senior couples. For women, it’s even worse. The poverty rate for all women ages 65 and older is 11.5 percent, that rate for single women is almost twice as high, at 19.1 percent.
THE COST OF LIVNG ALONE
Some 33 million people in America live alone, many of them by choice. Singles buy one-third of the homes in the U.S. today, unmarried men and women account for 10 percent and 21 percent of all buyers, respectively, according to the National Association of Realtors. But many single folks are renters, and average rents are now at record levels in 74 of the 82 markets tracked by real estate data firm, Reis, Inc. in the second quarter of this year. In 27 of them, average rent now tops $1,000 a month.
“When you're single, there's no one to split expenses like utilities and maintenance costs,” says Rick Kahler, president of Kahler Financial Group.
For older singles, a National Council on Aging analysis of data from The American Community Survey shows that a senior living alone spends almost 35 percent of their income on housing, compared to 22 percent if they live with others.
Because of the marriage-centric structure of health care, retirement and other benefits, unmarried people wind up making an average of 25 percent less than married colleagues for the same work, according to the American Association for Single People. Singles often pay more for auto and homeowners' insurance, and experts encourage singles to get disability insurance since there is no partner or spouse to rely on if they become injured or fall ill (premiums typically range from 1-3 percent of annual salary, or about $500-$1,500 a year if you make $50,000). Health insurance costs can be more burdensome because you can’t be put on a spouse’s plan when you’re in between jobs or fall on hard times.