Is It Better to Be Married or Single Financially?

Personal finances are significantly influenced by marital status. From tax benefits to retirement savings and loan approvals, being married or single comes with distinct advantages and challenges. While marriage allows for shared expenses and legal protections, remaining single provides greater autonomy over financial decisions.

Understanding how each status impacts key financial areas is essential for informed decision-making.

Tax Filing Considerations

Marital status determines tax filing options, with married couples choosing between joint or separate returns. Joint filing often lowers tax liability due to wider income brackets and additional deductions. In 2024, the standard deduction for joint filers is $29,200, compared to $14,600 for single filers, reducing taxable income and potentially lowering the overall tax burden.

Tax credits also vary. The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) often benefit married couples, particularly when one spouse earns significantly less. However, the marriage penalty can arise when both spouses have high incomes. For example, two single filers earning $100,000 each in 2024 remain in the 24% bracket, but if married, their combined $200,000 income moves part of their earnings into the 32% bracket.

Filing separately can be beneficial in cases where one spouse has significant medical expenses or student loan payments under income-driven repayment plans. Medical expenses are deductible only if they exceed 7.5% of adjusted gross income (AGI), so a lower AGI from separate filing could allow for a larger deduction. However, separate filers lose access to certain tax credits, such as the EITC and education-related credits, making joint filing the more common choice.

Retirement Contributions

Retirement savings strategies vary based on marital status. In 2024, individuals can contribute up to $23,000 to a 401(k), with an additional $7,500 catch-up contribution for those 50 and older. Traditional and Roth IRAs have a combined limit of $7,000, or $8,000 for those over 50.

Married couples have additional options, such as the spousal IRA. Normally, an individual must have earned income to contribute to an IRA, but a working spouse can fund an IRA for a non-working spouse if they file jointly. This allows the household to double IRA contributions, increasing tax-deferred or tax-free growth.

Some 401(k) plans require spousal consent before naming a non-spouse beneficiary, ensuring financial security for the surviving spouse. Single individuals have full discretion over their beneficiary designations.

Social Security benefits also impact retirement planning. Married individuals may qualify for spousal benefits, allowing them to claim up to 50% of their spouse’s Social Security benefit if it exceeds their own. Singles rely solely on their own earnings record, making it essential to maximize personal retirement contributions.

Loan Qualification Criteria

Lenders assess income stability, debt-to-income (DTI) ratio, and credit scores when approving loans. A dual-income household may appear more stable, as one spouse’s income can cover payments if the other loses their job. Single applicants must rely solely on their own earnings, which can make approval more difficult if their income is inconsistent or lower than lenders prefer.

DTI ratio is another key factor. Lenders typically require a DTI below 43% for mortgage approvals. A married couple applying jointly may combine incomes, potentially lowering their DTI. However, if one spouse carries significant debt, it could negatively impact the application. Single applicants have full control over their debt obligations, ensuring only their financial behavior is considered.

Credit scores also play a role. When applying for a loan jointly, lenders often consider the lower of the two credit scores, which can be a disadvantage if one spouse has poor credit. A single borrower avoids this issue but must rely solely on their own creditworthiness. Maintaining a strong payment history, low credit utilization, and a diverse mix of credit accounts is especially important for those applying alone.

Estate Arrangements

Estate planning varies with marital status. Married individuals benefit from streamlined inheritance processes, as assets can pass directly to a surviving spouse through joint ownership, beneficiary designations, or spousal inheritance laws. Many states follow spousal elective share rules, ensuring a surviving spouse receives a portion of the estate regardless of what a will states.

For singles, estate planning requires more deliberate structuring. Without a will, intestacy laws determine asset distribution, often directing assets to parents or siblings rather than a partner or close friend. Establishing a trust provides more control over asset distribution, ensuring wealth transfers according to personal wishes rather than state law. Naming beneficiaries on accounts like IRAs, brokerage accounts, and life insurance policies is particularly important for singles, as these designations override a will and ensure assets go directly to the intended recipient.

Insurance Choices

Insurance needs vary based on marital status, particularly in health, life, and auto coverage. Married couples can often combine policies, leading to lower premiums and expanded coverage. Many employers offer family health insurance plans, sometimes at a lower per-person cost than two separate individual plans. This can be advantageous if one spouse has access to a superior employer-sponsored plan with lower deductibles or broader network coverage. Singles must secure their own health insurance, which can be more expensive if employer-sponsored options are limited.

Life insurance needs also differ. Married individuals often purchase policies to provide financial security for their spouse, particularly if one partner relies on the other’s income. Joint policies or spousal riders can sometimes offer cost savings. Singles may not need life insurance unless they have dependents or significant debts that could burden family members.

Auto insurance can also be cheaper for married couples, as insurers often offer lower rates due to statistical data showing that married individuals tend to file fewer claims. Single drivers may face higher premiums, though maintaining a clean driving record and bundling policies can help reduce costs.

Credit Score Factors

Marriage does not directly affect credit scores, but joint financial decisions can. Couples who open shared credit accounts, such as joint credit cards or co-signed loans, become financially linked. One spouse’s missed payments or high credit utilization can negatively impact the other’s credit profile.

Singles maintain full control over their credit history, ensuring their score reflects only their own financial behavior. This can be advantageous when applying for loans or credit cards, as there is no risk of a partner’s poor credit affecting approval chances. However, singles may have fewer opportunities to build credit jointly, such as through shared mortgages or auto loans. Married individuals who keep separate credit accounts can maintain individual scores while still benefiting from shared financial responsibilities.

Social Security Aspects

Social Security benefits differ between married and single individuals, particularly in eligibility for spousal and survivor benefits. Married individuals may claim spousal benefits, receiving up to 50% of their spouse’s full retirement benefit if it exceeds their own. This is especially beneficial when one spouse has significantly lower lifetime earnings. Singles can only claim benefits based on their own earnings record, making it important to maximize their work history and contributions.

Survivor benefits provide additional financial security for married individuals. If a spouse passes away, the surviving partner may receive the deceased spouse’s full benefit if it is higher than their own. This can be particularly important for widowed individuals who were financially dependent on their spouse. Singles do not have access to survivor benefits, meaning they must rely solely on their own retirement savings and Social Security earnings. Understanding these differences helps individuals plan more effectively for long-term financial security.