Why Being Single Can Squelch Your Retirement Savings

In 2011, a paper published by the National Bureau of Economic Research noted that single people amass less savings than married couples -- even accounting for the fact that a married household has twice as many people as a single one. The paper establishes some reasons for the divide.

The Numbers

According to the findings by the National Bureau of Economic Research, a married couple had a median of $111,600 in retirement savings in 2008, whereas the median single person had $12,500. The top 30 percent of married savers had at least $332,400, but the top 30 percent of singles had at least $90,000. The differences were even more stark for the bottom 30 percent -- $24,000 or less versus $800 or less.

Economies of Scale

Part of the differential can be explained by the economics of scale that a married couple enjoys. While a married couple might need twice as many cars and twice as many cell phones, it can also save. Married couples can make do with one home, one set of furnishings and appliances, one cable subscription and one set of utility bills.

Mindset Differences

The National Bureau of Economic Research noted that married couples have a different attitude toward savings than single people. Apparently, the fact that married couples know that they need to save for two people leads them to save more aggressively than single people. Married couples are also frequently better insured. In addition to carrying insurance policies, having two people in the household serves as a form of insurance as well: if one partner gets sick or loses his job, the family still has another adult who can continue to earn money.

What to Do

The findings of the National Bureau of Economic Research do not necessarily mean that singles are doomed. The study focused primarily on older adults. It also excluded housing wealth, which is a major part of net worth for many older divorced singles. Although the trends may show that single people are less likely to save, this doesn't mean that single individuals can't start saving in earnest and solve the problem for themselves. Many financial experts, such as Dave Ramsey and Suze Orman, offer individuals valuable advice for how to save for retirement before it's too late.