The traditional two-parent household is in decline
Here’s the backdrop. American demographics are changing. Single people, and single parent households, make up an increasing percentage of American households.
One person households now constitute almost one-third of the U.S. population. At one end of the age spectrum, more young people delay marriage and starting a family, and at the other end, a larger number of older people are living alone as people live longer.
And for the first time in U.S. history, the traditional American family of husband and wife, with or without kids, is no longer the majority.
Singles face greater challenges
Demographic trends have a financial impact. “Non-couples tend to be less secure financially than others, ” says a new MetLife study, which surveyed people between the ages of 45 and 80.
Singles (those who are divorced, widowed or not in a marriage or domestic partnership) are more financially challenged than couples and are less likely to have taken steps to prepare themselves for retirement.
- Significantly more singles (up to 63%) are concerned about how to cover living expenses as they age.
- 46% of singles say depleting their savings is a “major” or “significant” concern, much more than with couples.
“More single women believe it’s harder for them to save for retirement than respondents who are married or have a blended family” because they feel they don’t make enough money or have sufficient financial resources to do so.
- 27% of singles have not set retirement goals.
- 20% have not started saving yet.
- Only 15% are seeking professional financial advice to help them prepare for the future.
Steps singles can take to succeed on their own
American families are changing. With more singles of all ages as well as single-parent families, it’s harder for people to prepare and survive in retirement.
But there are important steps that singles of all ages can take:
Make sure to realistically assess your financial resources and capabilities. If resources are tight, it’s even more important for you to set priorities and control your spending.
For younger singles, start planning and saving as early as possible. Time is a powerful ally.
For working singles, take advantage of employee benefits and programs to help your resources go farther, and protect your income from unforeseen events.
Make sure your legal affairs are in order and execute the proper documents, especially if others depend on you.
If you are nearing retirement, consider delaying Social Security to preserve your income as you age.
Take the right steps for each of your life stages. What’s right for you as a young single will change when you’re a 40-year old single parent, or a divorced 60-year old nearing retirement.
If you’re not sure what to do, seek professional advice. Couples often have another income or family member to fall back on. But for singles, there is often no “Plan B,” making it critical to get it right the first time.