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There are countless ways that single people are at a disadvantage financially. Single people pay significantly more money on taxes, medical care premiums, insurance premiums, and more. The Atlantic did a research study and found that a single woman earning a salary of $80,000 is likely to spend over $1 million more in her lifetime than a married woman earning the exact same salary. One million dollars is quite the price to pay for not settling down with a partner.
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This huge figure comes from a variety of different sources. First, a single person pays significantly higher taxes than his/her married counterpart. HR Block has identified ten ways a taxpayer is affected by getting married. Tax brackets (percent income taxed determined by annual salary) are different for single people and married people. So once a person gets married they run the possibility of moving into a lower tax bracket, while making the exact same amount of money. So the percentage of income taken away as taxes is not only determined by how much money one makes (which might make the most intuitive sense) but also one's marital status. Married individuals are also permitted to make two personal tax exemptions, as compared to a single person's one. A married couple thus can file four times more money's worth in tax exemptions than one individual. On top of that, married couples are permitted to give monetary "gifts" tax-free with no limit.
But it doesn't stop with taxes. Single people also miss out on a ton of monetary benefits from social security. A married person not only receives their own social security benefits, but also at least 50% of their spouse's (100% if the spouse's social security benefits exceed their own) benefits as well. And the spouse still gets 100% of their social own social security benefits. So a retired couple will receive far much more money from social security than any individual. Also, when a married person dies, all of their social security benefits are received by that person's family. However, when a single person dies, all of the social security benefits simply disappear. This is worth emphasizing as it is clear that a single person would have another family member in mind (i.e. brother, sister, nieces, nephews, etc...) that could use their social security benefits, but the state does not allow this. The craziest part is that a person does not even need to be currently married to receive extra benefits, but only needs to have been married for longer than ten years.
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Of course the list does not stop there. Single people have less benefits for IRAs, pay much more for health insurance, other insurances (as insurance companies often give out hefty family discounts), and housing. The exact numbers of these other expenses are outlined very nicely on Psychology Today. So once we add up all of these different cases where singles pay so much more than their equivalent married counterparts, it is easy to see how singles may be out of over a million dollars in their lifetime (as was predicted by The Atlantic). But should simply saying "I do" amount to a million dollars in savings?
Single people are very likely to be financially stressed. US News shows that singles have the lowest income and asset levels, and the lowest homeowner rates of any other household structure. They also found that only 17% were on track to reach their retirement goals. If single people are already very stressed in regards to their financial situation, why should they be "penalized" for not having a life partner? The tax disparities between single and married people are far too great, and are not justified just for saying "I do".
It's an interesting situation that you've focused on this week. The fact that singles' cannot pass along their social security benefits to a close family member, along with other detrimental issues surrounding singles, really emphasizes how much the government encourages marriages. Cool post.
ReplyDeleteThis is super interesting. It's interesting to note that although they have to pay so much more for being single, not something that is hidden, they choose to stay single. Clearly there is enough draw to stay single and not conform that there is increasing numbers of single people out there.
ReplyDeleteI like this, i remember learning this in my math class and also in my soc class as well. I always found it odd that where there is a situation where there is more money but they get the most out it.
ReplyDeleteI find it really interesting that in a way, the government is kind of set up for married couples. As if to say all people must end up getting married. I also never knew that they paid more for insurance and received less benefits.
ReplyDeleteI find it really interesting that in a way, the government is kind of set up for married couples. As if to say all people must end up getting married. I also never knew that they paid more for insurance and received less benefits.
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