October 19, 2021

The Single-Person Penalty is Real. Here’s How to Protect Your Finances.

In Wealth Strategy, Women and Wealth

Kim Rosenberg
Contributions from: Kim Rosenberg, CFP®

The reality facing single people in the United States today is that it is more expensive to be single than it is to be married. For example, a single woman may end up paying hundreds of thousands of dollars more over her lifetime than that of her married counterpart when considering taxes, retirement savings, and housing, among other factors. (One estimate suggests the total could be closer to $1 million!)

There has been much discussion on the so-called “marriage penalty” – when a married couple has an increased tax burden when they file jointly rather than if they had each filed as a single. It’s important to point out that not every couple faces a “marriage penalty.” Several factors play into whether they will be impacted by such a penalty, including the income of each spouse and the state where they reside.

While many like to focus on the “marriage penalty,” there is not as much discussion about the “single penalty.”

Whether you are single by choice or circumstance, millions of people are impacted by the additional costs of being single. According to 2019 data from the U.S. Census, 45% of men and women age 18 or older are single (never married, divorced, or widowed).  I have experienced the penalty firsthand after the death of my husband to cancer in 2014. While it can be daunting to think that as a single person you may possibly pay hundreds of thousands more over your lifetime than your married friends, with proper planning you can minimize the penalty’s impact on your life.


Single people need to be mindful of penalties based on their marital status, including:

  • You pay more in taxes. Income earned by single people is taxed at a higher percentage than the income of married people filing jointly with a similar tax table.
  • You receive less in Social Security because married people can draw from a living spouse’s benefits and also receive a deceased spouse’s benefits.
  • You don’t have the luxury of two incomes to pay for housing, food, education, health insurance, etc., as a married couple may if both are employed.
  • You also don’t have two incomes contributing to retirement savings, general savings funds, and long-term insurance policies, causing a higher financial burden on you to pay for these important items.

Single women face an additional burden in that women working full time often receive only 82 cents to every dollar earned by men, and likely less if you are a woman of color. When you don’t have a spouse contributing to household expenses and retirement savings, the pay disparity presents an additional challenge for single women.


I share these facts with you, not to scare or sadden you, but to inspire and encourage you to take charge of your finances. When you are single, you will need to be more diligent in planning and saving for your future. This is true no matter your stage in life and whether you are single by choice, divorced, or are widowed.

For example, when you die as a single, childless person, the money you contributed to Social Security will go back into the pool of funds to be redirected to someone who needs it. Also, because you are single, you are not able to receive any Social Security funds upon the death of a long-time partner or friend. You will need to consider how much Social Security income you will earn upon your retirement and what other sources of income you may need to enjoy a certain lifestyle.

In some households, often one spouse takes care of the family finances – paying bills, setting aside money for retirement, and working with a financial advisor. This works for the other spouse until a major life event – such as divorce or death – occurs. Then the newly single person suddenly finds themselves responsible for new and important tasks.

Do not be afraid to take control of your financial life today. I was determined to educate myself on planning and investments once I knew that I would be the only source of income for myself and my three teenagers.

It may feel overwhelming to consider all the pieces of your financial life and how you can make them work best for you, so consider working with a financial advisor who understands your circumstances and can make recommendations for maximizing your wealth. Your advisor can help you see the big picture, identify advantageous tax strategies, and help ensure you reach your retirement goals.


Unfortunately, single men and women face a penalty for being single in the U.S. However, knowing this gives you the power to take control of your finances and create a plan that allows you to achieve security and peace in your life.

About the Author: Kim Rosenberg, CFP® is a Relationship Manager and Wealth Planner who takes a holistic approach to achieving her clients’ financial goals which integrates planning, investing, wealth management, tax implications, and estate planning. She uses her vast knowledge, personal experience, and deep empathy to help women take control of their money, and feel secure in their financial journey. She has helped women in all stages of life achieve their wealth goals, especially women facing major transitions like divorce or death of a spouse.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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