For Better or Worse? The Marital Gap

There appears to be an ever widening gap between what married and single households are able to save. What are some of the factors that may contribute to this divide and can anything be done to potentially minimize the gap?

Marital Gap

 

Married Versus Single Household Savings

On one side of the divide, married households typically make more money overall, but may have more overall expenses as well. On the other side, single households don’t have the benefit of a double income or sharing expenses, also known as “economies of scale,” with a spouse.

Divorce may be one reason for the expanding marital gap in finances. In divorce, assets are divided and legal expenses can be a tremendous drain on savings. Also, if children are involved, the impact of having two separate residences and child support can be overwhelming. According to an online survey, divorced workers (who are typically 5 years-plus older than un-divorced counterparts) on average have $113,000 saved for retirement while married workers have $124,000 saved for retirement.1

Another possible reason for the marital gap in savings may be the death or illness of a spouse. An unexpected loss could cause a severe drain on current and future resources, especially if applicable insurance coverage wasn’t in place to minimize medical expenses or to offset the loss of a spouse’s future earnings.

In addition to maximizing household income and protecting oneself and loved ones with appropriate and manageable insurance coverage, there are a number of steps you can take with the guidance of a financial advisor to better provide in the face of future financial uncertainties:2

  • Increase employer retirement plan participation;
  • Boost overall savings & ability to save;
  • Improve feelings of confidence and control;
  • Step-up formal planning and calculate future needs; and
  • Maximize general financial management and financial health.

Bottom line, regardless of marital status, both married and single households can benefit by taking simple steps to ensure they will be prepared for uncertainties—whether disability, illness or death of a spouse, divorce, college spending, or any event that includes loss of income or loss of assets. A savings plan is the first line of defense in protecting your ability to provide and prosper, and considering narrowing the marital gap with the help of a trusted financial advisor.

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
OneBite Editorial Staff
OneBite Editorial Staff

OneBite® is a Top 50 Financial Advisor Blog powered by Hewins Financial Advisors. Founded in 2011, the digital magazine is dedicated to providing intelligent, in-depth coverage and analysis of the top financial and economic issues facing investors today.

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For Better or Worse? The Marital Gap

time to read: 2 min