Single & secure

Emily Hedum has accomplished a lot in her 37 years. Originally from central Iowa, she moved away from her parents and younger sisters to complete her medical residency training in Montana. Ten years later, she’s a family practice physician in Helena.

Emily continues to chip away at the student loan debt she accumulated from her private medical school education, but she hasn’t let that stop her from homeownership or planning for a future family. As a single person, she’s achieving all these financial goals on one income.

“I have worked hard. I have the money to pay my bills and save, but also to do fun things and treat myself, buy gifts for friends and family, and help them out if they need it,” she says.

Emily is among the rising share of U.S. adults who are living without a spouse or partner. According to reports from the Pew Research Center, roughly four in 10 adults, or 38%, are unpartnered—meaning they are not married, living with a partner or in a committed romantic relationship. “While the unpartnered population includes some adults who were previously married (those who are separated, divorced or widowed), all of the growth in the unpartnered population since 1990 has come from a rise in the number who have never been married,” the report states.

Further, 56% of single Americans say they currently are not looking for a relationship or casual dating.

They enjoy being single or they have more important priorities, the majority notes.

Beyond perks like the ability to focus solely on your career and pursue your own interests, there are also financial benefits to staying single.

“As a single person, your expenses are typically less, and you have the freedom to do what you want with your money,” says Autumn Keller, a Thrivent wealth advisor based in Helena who has been working with Emily for seven years. “It’s very common for couples to have different points of view around how to handle finances, so if you’re single, you don’t have to debate that with someone else.”

Of course, those same benefits also can pose challenges. Being single means relying on one income to cover expenses, and you don’t have another person to keep you accountable to your financial goals.

Whether you’re single by choice, or because of a life event like death or divorce, the following tips will help you feel more confident with money.

No matter your relationship status, it’s smart to plan for the life events you can’t control. But securing the proper insurance—including disability insurance for if you get sick or injured and can’t work, and life insurance to help cover your final expenses—is especially crucial for single people.

“If you’re a one-income household and that income is lost, everything is dependent on that money, so it becomes really important to cover that risk,” says Joan Bartz, a Thrivent financial advisor in Glenwood City, Wisconsin.

A life insurance policy became a big part of her client Nancy Graese’s financial plan when her husband, Dave, died from esophageal cancer in 2014 at the age of 63. Nancy admits the pair, who were high school sweethearts, didn’t plan well in their younger years as they focused on working and raising their three children.

"We weren’t intending to die in our 60s. When Dave died, I knew he had money with Thrivent, but he handled that policy, so I had no clue what was in the account,” says the now-72-year-old Nancy, who spends her time quilting, gardening, volunteering and spoiling her six grandchildren. “All of a sudden, I’m on my own and I don’t have anybody to talk to, so that first conversation with Joan led to an incredible relationship. Talk about a lifeline, a conduit to my finances.”

Thanks, in part, to money from Dave’s life insurance policy death benefit, Nancy—a former grant writer for Wisconsin schools—was able to retire, purchase a new car, travel and complete home improvement projects. She was grateful for guidance from Bartz during the life transition.

“In those early years, I was able to give her comfort as she understood the finances more and knew she was not alone,” says Bartz of working with Nancy. “My team would be here to help her through this.”

Income earned by single people is often taxed at a higher percentage than income of people who are married filing jointly (though there are exceptions, of course).

"The tax brackets are not very kind to single people,” says Cameron Richardson, an advice services consultant at Thrivent. For example, in 2023, single filers are in the 12% tax bracket up to $44,725, but for married couples filing jointly, that bracket extends up to $89,450. If a single person makes between $44,725 to $95,375, their tax bracket jumps to 22%, compared to couples in the same bracket making $89,450 to $190,750.

Translation: If a single person and a married couple both earn $75,000, the single person is taxed at 22%, while the married couple is taxed at 12%.

Luckily, there are some ways to offset income taxes. You can contribute the maximum amount to your retirement account—$22,500 for 401(k) plans and $6,500 for IRAs—and a health savings account ($3,850 for 2023).

Another creative way to decrease your taxable income is through planned giving, such as a donor-advised fund that allows you to take a tax deduction on a charitable donation in the year you create the fund.

Beyond the tax benefit, leaving a legacy through planned giving may motivate single people to stick to their financial plan. “Sometimes that really sparks a client’s passion and energy for owning their plan because now they’re doing a greater good,” says Keller.

Making sure you have enough income after you retire can feel especially daunting if you plan to rely on one income in your post-working years.

Set your target retirement goal early and monitor your progress frequently to ensure you’re staying on track. “When you aim for nothing, that’s what you get,” says Keller. “As you move through different phases of life and your career, let’s dream a little bit. Let’s put that target out there and see what we need to build, and then protect what we need to.”

Take advantage of your company’s 401(k) match to the maximum. Diversify with other retirement planning vehicles like traditional and Roth IRAs, annuities and cash-value life insurance policies.

Retirement planning is one of the big goals Emily is working on with Keller. “I’m setting myself up for success when I’m older,” she says. “I want to be able to actually retire and enjoy life.”

Bartz has observed that, when it comes to her married clients, one person is typically the spender and the other is the saver, but when you’re single, you don’t have that system of checks and balances. For single people, sometimes a financial advisor can be that person who helps keep you accountable to your goals.

"That’s all the more reason to partner with someone you trust, someone who really gets you and takes time to listen, to understand where you are and what’s important to you,” says Bartz. “That’s where this job is magic. It’s such a privilege to walk with people and to be a part of their lives, for them to open up and be vulnerable and share the things they worry about. At the end of the day, that’s what keeps me coming into work.”

Taylor Hugo is a freelance writer in Colorado.

Take the next step. Thrivent can help.

Whether you have always been single or you’re single again, Thrivent has the tools and resources to help you set goals and plan for the future so you can feel confident with your money.

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Whether you’ve always been single or you are single again, here’s some advice to help safeguard your finances.

• Prioritize career advancement. “Single people have the flexibility to take advantage of different professional opportunities that may improve their financial situation in the long run,” says Cameron Richardson, an advice services consultant at Thrivent.

• Set goals. You don’t need to be married to set clear financial goals, such as purchasing a house or planning for a family. “Ask yourself, what can I do today that I’ll be proud of in five, 10, 15 years?” says Richardson, noting this could include eliminating debt or building up savings. “Set a foundation of good habits, things you can establish in the present that are going to pay off in the future.”

• Plan ahead. Make sure you have an adequate amount of disability and life insurance. And even if you’ve never married and don’t have children, you need an estate plan that identifies a power of attorney and health care proxy to make financial and medical decisions if you are incapacitated, as well as beneficiaries who will inherit your assets. Consider naming an organization you’re passionate about as a beneficiary to leave a legacy through charitable giving.

• Assess all liquid accounts. Figure out how much you have in checking, savings and retirement accounts, as well as cash-value life insurance policies if you’re the beneficiary.

• Figure out bills. What debts need to be paid? This could be credit card, house or car payments. “Bills don’t stop coming in [when there’s a death or divorce]. It can be devastating if you fall behind on those,” says Richardson.

• Determine where money will be coming from going forward. Will you continue receiving a deceased spouse’s pension or Social Security? If you’re divorced, do you need a new job that enables you to provide for yourself on one income? These are important questions to consider in shaping your new financial future.