Spouses in Two-Income, One-Saver Households Aren’t Saving Enough for Retirement

When only one person in a dual-earner household is putting away money for retirement, the couple’s saving rate is too low to sustain two retirees, according to a recent study.

Using data from the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) from 2009, 2011 and 2013, the researchers analyzed three groups of married individuals aged 25–54: single-earner couples, dual-earner couples where both members are saving and dual-earner couples with just one saver. Single-earner couples were found to have an average savings rate of 8.6%, two-saver couples had an average contribution rate of 9.3% while the dual-earners with one saver only contributed 4.9% of their household savings to 401(k) accounts.

Further, the study also showed that, compared to other individual characteristics, members of dual-earner couples with one saver saved 0.8% less than all dual earners, those who had some college education, women, those who are 10 years older than their partner and those who experience a 10% increase in household earnings.

The researchers concluded that dual-earner households with just one saver save too little, especially since having two incomes and access to at least one 401(k) account encourage saving toward retirement. They recommend that 401(k) plans increase contributions automatically over time and account for an individual’s marital status to set default rates so that dual-earner couples save enough money for two people’s retirements rather than just one.

Source: “Do Individuals Know When They Should Be Saving for a Spouse?,” by Geoffrey T. Sanzenbacher and Wenliang Hou; Center for Retirement Research at Boston College, March 2019.