← HerMoney with Jean Chatzky
HerMoney with Jean Chatzky
Single, Self-Sufficient & Paying More? How to Beat the Singles Tax
00:27:50
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- [00:01]
A
This episode is brought to you by Peloton Break through the busiest time of year with the brand new Peloton Cross Training Tread plus, powered by Peloton iq. With real time guidance and endless ways to move, you can personalize your workouts and train with confidence, helping you reach your goals in less time. Let yourself run, lift, sculpt, push and go. Explore the new peloton cross training tread +@onepelaton.com this episode is brought to you by State Farm. Listening to this podcast Smart move Being financially savvy Smart Move. Another smart move Having State Farm help you create a competitive price when you choose to bundle home and auto bundling. Just another way to save with a personal price plan like a good neighbor, State Farm is there. Prices are based on rating plans that vary by state. Coverage options are selected by the customer, availability, amount of discounts and savings and eligibility vary by state.
- [00:58]
B
So when you're single, you're doing everything right logistically. If you can let the experts take on some of this responsibility so you can continue doing other things. It's always good to have that unbiased third party approach that they will look at your financial situation or your assets right, figure out what your net worth is, what kind of liability you have going on, and work with you to create a short, medium and long term plan that addresses where you want to be next year, five years from now, a decade, and then retirement. Whether you retire at 60 or 75.
- [01:34]
A
Welcome to Her Money. I'm Jean Chatzky. More American women are single than ever before and I know that many of you are part of that growing segment of happy style, self sufficient women showing the world that it is not only possible to lead a joyful, full life on your own, but that you can build financial power and legacy completely on your own terms. We love to see this, but we have to acknowledge that the system wasn't built for single women. Whether we are talking travel, housing, tax benefits, flying solo often means paying more and getting less. I am not talking about the Payment Pink tax. I am talking about a much broader universe. It is especially true when it comes to planning for retirement, which is why I am so excited to welcome Renee Sylvester Williams to the show. She is a finance journalist, creator of the Budget newsletter for solo earners, and the author of the new book the Singles Tax. No Nonsense Financial Advice for Solo Earners. In the book she shines a light on the hidden financial penalties of being single and what solo earners can do to build wealth, claim their space in the economy and plan for A future that works for them. Renee, congrats on the book and welcome to her money.
- [03:03]
B
Thank you. And thank you so much for having me.
- [03:05]
A
Before we get to the nuances of the penalty, can you share a little bit about your own experience as a single woman, the specific challenges that you've come up against and the stereotypes that you hope to squash. I mean, why do you think that the personal finance industry still focuses so heavily on those couples?
- [03:26]
B
Well, they are the majority, right? So just looking at sort of the latest data, I would say it's about just under like 30% of American women identify as single. You know, then there's 70% who identify as coupled up and other things. So they are the majority. And then also keep in mind, until fairly recently, there wasn't that much attention paid to single women in of themselves. I would even say in the last five years, sort of based on what I'm seeing on social media, that sort of attention on being single has really, really come to the forefront. Prior to that, it really wasn't that talked about. When I was. It was 2020 pandemic, I was freelancing full time. So I had some time to kill a couple months before it picked back up. Because they're like, oh, you're a finance journalist. Would you like to write about this? I'm like, sure. So in those couple months where I had some time to kill, I was pitching stories and of course, you know, I had time to think. And I'm like, oh, so if, if I get Covid, I can't work. I have no backup income apart from savings, perhaps a line of credit, or I could do a slow burn on my credit card. And this intrigues me because I'm like, oh, so. So I had all of these questions of what to do. So I figured if I have these questions, other people are going to have these questions because prior to that, you'd get all of this beginner adult information, like, yes, get a credit card. Do you know, pay off your credit card, don't carry a monthly balance and all the prices. Right.
- [04:53]
A
We're not talking necessarily about young women in their 20s who are single because they have not coupled up yet. We're talking about people in their 40s, 50s, 60s, and beyond.
- [05:05]
B
And there was nothing there. There was nothing there. Right. There's just this big blank. And then you get a little bit stuff when you retire. There was really nothing there about, okay, well, how much should I save?
- [05:16]
A
What.
- [05:16]
B
What kind of investment should I do? What do I maximize?
- [05:19]
A
We're going to get into all of those different questions. But before we do that, define the singles tax. What is it and where specifically does it hit single women most?
- [05:32]
B
The single tax is sort of the financial penalty the single people pay in a world that benefits couples. So it tends to come out in certain things such as, like hard costs, right? Covering a mortgage by yourself, covering rent by yourself. You have to fund your entire lifestyle without the, I would say, security of possibly having a second income to fall back on. So there are other things that you need to think about. You might have to think about greater liquidity with an emergency fund. You might have to think about certain types of insurance to cover you if you can't work.
- [06:04]
A
Right.
- [06:04]
B
You may have to think of a bit of more downside protection as you get closer to retirement. You know, you may have to think about putting a little more money in your health savings fund. You know, one thing I would say is if you can and you have group retirement options, you have to maximize that. But what does that look like? Do you want to defer taxes later? Do you want to pay the taxes now so you have tax free income drying down once you reach retirement age? These are all sort of questions that women in the 30s, 40s and 50s should be thinking about. Because at this point in time, it's not so much about savings. Yes, important, it's about making your money work.
- [06:41]
A
I want to dig in a bit to housing.
- [06:43]
B
You.
- [06:43]
A
You mentioned that half of your Gen X friends still rent and that you all sometimes daydream about buying a house together. I know that you specifically bought a condo in Canada. Renee is in Canada. For those of you who haven't picked up on that yet, in early 2009, which was just after the financial crisis, good timing on your part. But for listeners who are still single and is buying the move, is it the smarter move? Is buying with friends a good idea? How do you make the decision and where do we get it wrong?
- [07:20]
B
I think first of all, you have to start kind of by understanding why, why you want a house, right? Or why you want to buy, let's say why you want to buy. Be it an apartment, a condo, a house, whatever co op living, whatever it is, like why do you want to buy it? Are you buying it just because you were told this is the next stage of adulthood, that you have to buy a house may not be the best idea for you personally, right? Because when people buy a house, they just think about the buying of the house, right? Your down payment. You get that lovely 30 year mortgage locked in at a Good rate, great. But what about things like HOA fees, right? Home repair? What if your furnace goes right? What if you have to replace the windows, right? What if you buy a really old place and you have to deal with asbestos, right? And then there's all the yearly fees. So these are things to consider.
- [08:06]
A
On the flip side, and I'm pulling an example from my own life. I have a cousin, single woman, in her 60s, moving, really wants to buy. And the reason that she really wants to buy is that rents go up often every year, and she would really like to move one more time. Doesn't want to have to think about moving because the rent has become untenable. What do you say to that argument?
- [08:33]
B
I say it's actually a very valid argument, right. There are multiple cities that are looking to weaken rent control, right? Like if you do not have that security of knowing you're gonna have a roof over your head that you can afford. Absolutely. Look at buying something, right? Because that removes one, one type of anxiety from you, you know, where you're going to sleep. So absolutely valid. That's why it's really important to understand why you're buying. Not just buying, because it's a thing on a list to take off. You have to understand, like for yourself, why are you buying?
- [09:06]
A
As a single woman, single person, what is the realistic percentage of your income that you should be spending on housing?
- [09:15]
B
That's such a great question, because when I went looking for that answer, the OECD is like 30%. But you need to spend what you can afford, right? Because there are some people who are spending 40, 50% even more on their income because the cost of housing has gone up, say, compared to wages, right? So there is no answer. I mean, I would love to tell you, spend 30% on your income, but again, it goes back to you need a roof over your head, you need some kind of security. Can you afford it without feeling absolutely constrained. And then you have to work back and find the number for you.
- [09:50]
A
I agree with you because I do think that, that people make mistakes. When we look at those, those pat percentages and, and don't bother to account for the other costs that come along with homeownership. We're going to take a quick break. This time of year, everyone's talking about new goals. Saving more, spending less, paying off debt. But at hermoney, we like to get specific. Take Haley, our producer. She and her husband just realized they've got a full year of weddings. One in Miami, one in Poland, another in nyc, plus engagement parties. In between. And as joyful as weddings are, they are not cheap. That's why Hayley turned to Monarch, a personal finance tool that helps you plan ahead, not just look back. Monarch pulls everything into one beautiful dashboard. Your budget, your accounts, your investments, and lets you project forward. Haley knows exactly what she needs to save. And now, so she can say yes to all the fun without falling behind. Set yourself up for financial success in 2026 with Monarch, the all in one tool that makes proactive money management simple all year long. Use code hermoneyonarch.com for half off your first year. That's 50% off your first year@monarch.com with Codehermoney. You know that feeling when you're wearing something that just works? Lately, for me, it starts before I even get dressed because skims has totally transformed my basics drawer. The cotton jersey full brief. That's my go to. They stay in place, they don't bunch, and after dozens of washes, they are still in perfect shape. And the fits, everybody. Triangle bralette. I think a bralette could support and flatter, but Skims. Nailed it. Feels like a second skin, but one that makes you feel really confident. Skims just makes me feel pulled together, even on the busiest mornings, and that's something I'll always recommend to a friend. Shop my favorite bras and underwear@skims.com after you place your order, be sure to let them know that we sent you. Select podcast in the survey and be sure to select our show in the dropdown menu that follows. I, like you have girlfriends who talk about, well, if we're all, you know, left standing after our husbands die, we're just gonna buy something together. We're gonna live together. If you've got this Golden Girls fantasy in your mind and you're thinking, you know, I want to live with my girlfriends when I get older. What do we need to think about before we buy something together? What. What are the pluses? But what are the dangers?
- [12:46]
B
Great question. Thank you for asking. So what you need to think about is your finances. And you have to be very transparent about it, right? Because you're pooling your resources, and you have to be open about your finances and what you're comfortable with, right? So let's say you're all gonna. You're all gonna pull your resources and buy a house. What if that house needs renovations, Right? What are you comfortable with in what you need for your own space and what you need in communal space? How much work are you willing to do to drive that community forward so it's a bit of finance and a bit of community. So that's on the plus side. But what I would also say is just don't just go in there and decide, okay, we're all going to live together now. No, no, no. Because what happens is you might be really, really good friends, but you've never lived together. And it's going to be the smallest things that are going to irritate you.
- [13:31]
A
It's such a good point. I often think if you're going to do that, maybe you should rent something for a year and make sure that you are as good roommates as you are friends. Just, just to be doubly sure that it works.
- [13:44]
B
Hundred percent. So I rented with a good girlfriend of mine for four and a half, almost five years and we were looking to pool our resources and buy a two bedroom condo. Apart from the fact we couldn't find at the time two bedroom condos that had the same sized bedroom. Right. It turned out like again that whole small thing that irritated us like because like I hate doing dishes. I absolutely hate doing dishes is why I have a dishwasher.
- [14:10]
A
Right.
- [14:11]
B
And she has a cat. Cat is lovely, but I just don't want to deal with the cat hair. So minor. And so of course we bought our own places. We're still really good friends. I helped her move last week. But it's never the really big things. It's that I spoke to Pat Dunn who has this organization called Single Women Living Together, where that's what she does. She had, she has created sort of a central database where women who are looking to senior women who are looking to rent other women. And that's something that she addresses.
- [14:38]
A
We're in the middle of tax filing season. Most people in the US file in February. We know that married couples filing jointly get a tax advantage. What are the most overlooked tax strategies that single women should be using but aren't?
- [14:52]
B
If you have group pension options, maximize that. Maximize it as much as possible. You do not have tax sharing options with a spouse or a partner. Right. So you have to look at what your company is offering and maximize that out as much as possible. Like put the maximum in into your 401k or 403b.
- [15:12]
A
Your retirement, your work based retirement plan.
- [15:14]
B
Exactly. Especially if they like if they're going to contribute a little bit as well. Take that free money.
- [15:20]
A
Anything else tax wise that you would point us to.
- [15:23]
B
I would also maximize your health savings account as well. Like maximize that because not, I mean, even if you don't need it.
- [15:28]
A
Right.
- [15:28]
B
Now you may need it down the line. So like maximize that sucker as quickly as you can.
- [15:33]
A
Yeah. And if you don't need the money, consider investing it and letting it grow. We're going to take a quick break. When we come back, we're going to talk about insurance for solo earners and how to build a team that can support you when you need the help. When I first started HerMoney, it felt like I had to figure it all out alone. Scripts, tech, design, promotion. The list was never ending. Every day brought new tasks that I just hadn't planned for. I would have loved having Shopify in my corner. Shopify is like having a built in business partner. It helps you run your online store from top to bottom. Inventory, payments, marketing, analytics, all in one place. They even offer you hundreds of beautiful templates so that your store looks just like you. And if you're stuck, They've got award winning 24. 7 support and tools that simplify your work. From AI written descriptions to social and email campaigns. Campaigns that actually convert so that you can spend more time growing your dream and less time chasing tabs. Start your business today with the industry's best business partner, Shopify and start hearing. Sign up for your $1 per month trial today at shopify.com hermoney go to shopify.com hermoney that's shopify.com hermoney residence day.
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- [17:35]
A
See store online for details. We are back with Renee Sylvester Williams, author of the Singles Tax. You say that buying insurance is buying yourself peace of mind, especially for single people. Let's walk through the different types of insurance. Okay. Life insurance for single people. If you don't have any dependence, do you even need it?
- [18:02]
B
No, not necessarily. So if you, if you don't have any dependence that I am talking about, like children, obviously. But even if you like you, maybe you're supporting parents, right? Or somebody in your extended family, then yes, you would want to consider Life insurance. If not, you probably don't need it.
- [18:17]
A
So what would be the instances where you do need it? Children, parents? How about a business?
- [18:23]
B
Yes, actually that's a very good point. If you have a business that you are very involved in, you are a co founder or you are a founder, it's actually very good to have life insurance. Apart from the fact that you can set it up in a way that your business pays your premiums for you, which is great. So if you pass away suddenly, the business will get the life insurance money, which bridges, right. Which, which can help bridge that, you know, while everything goes through probate. And what happens, how you set up the business, who gets your shares, what your business partner needs to do, but that money can keep the business going.
- [18:57]
A
What about disability insurance? How does that fit into the plan of a solo earner?
- [19:03]
B
I am a huge fan of disability and critical and critical illness insurance. I carry it and I've been carrying it for, I don't know, five, six years now. The thing is, is you may not like paying the premiums for it, but I can tell you, like, if you ever need it, you're going to be so glad you have it. Because the thing is, with critical and disability insurance, one gives you a lump sum depending on how much you're paying for, right? And then the other one pays you monthly. And what that does, it gives you a source of income. So let's say you're going through rehabilitation. Rehabilitation. Or even if you can't work and you need time to take a deep breath and to kind of figure out how to pivot if you can, that gives you income. It covers your bills, right.
- [19:44]
A
And when you don't have another earner in the picture to back you up, it's even more important. I know you said you never travel without travel insurance. Why is that especially important? As a single person?
- [19:56]
B
I never travel without travel insurance because maybe I'm just a paranoid human being or because I write about insurance a lot. So I usually hear the horror stories from my sources. And for one, I don't want to end up in debt. And two, I want to make sure that I am properly covered, right? So if I end up in a country that doesn't have universal health care, I am at least covered for that. I could, I will. My hospital bills are covered. I have a way to get back home. I don't have to stress out members of my family or my friends. And again, it is peace of mind. And in all honesty, depending on, of course, your medical situation. It's Fairly affordable.
- [20:35]
A
I write a column for aarp, the magazine, and I get a lot of letters from people, singles, who are focused on their estate plan and the process of naming somebody to be their power of attorney or their health care proxy. Because there isn't a spouse in the picture. Sometimes there aren't even siblings in the picture. Estate planning is trickier when you're single.
- [21:02]
B
It really is. And, you know, if you are fortunate, you have a good relationship with family, and siblings have that conversation first. So, for example, my brother and a friend are executors of my estate, and I have asked them, and they have both agreed. They have both seen my will and my estate plan. It's pretty simple. I don't have a very complicated will and estates plan, and that's fine. It's basically, sell everything. The money goes there, right? Pay my friend. Very, very simple. But if you don't have a good friend or siblings, there are companies, or you can maybe ask your lawyer for recommendations of somebody who can be your executor for you. And this is where it's really, really important to sit down and not only do your will, but you need to do your estate plan and your powers of attorney and be as granular as.
- [21:53]
A
Possible with your instruction and then communicate those instructions. I mean, you said, my brother and my friend have seen my will. There's secrecy around estate planning where there really shouldn't be. And I. I would imagine it's especially dangerous when you're on your own.
- [22:11]
B
It is. It is, because let's say, you lose capacity, physical, mental, whatever the situation is, or you have passed away. I actually think, think that it is a kindness that all your friends and family have to do is go, oh, so this has happened. Plan. All right, page one. Let's go.
- [22:33]
A
Totally agree. When we delve into retirement planning, what is the biggest mistake that you see single women making? When they believe that they're on track for retirement, but really they're not.
- [22:48]
B
That's such a good point. I think one of the biggest things is single women need to ask more questions and need to take control. Like, go bother your advisor. Go bother your planner. You have a question, reach out and talk to them. Like, take control of your finances and don't wait. Like, plan for the life you have.
- [23:07]
A
Now you mention your advisor, and one of the very first things that you delve into in the book is that you're gonna need a team to help you. If not today, then tomorrow. That's a little bit controversial. Many of us don't work with Professionals. But I agree with you that as a single person, it becomes more important not just to have somebody who will take care of things, but to have a sounding board. When my father passed away and my mother was single for the first time in many, many years, one of the first things that we did was go out and hire an advisor for her. And we did it not because she wasn't capable of managing their money. She picked their bond funds for years. She understood it so much better than my dad, but she felt like she lost her partner in this. And we agreed that that new partner should not be me. You make the point that hiring a team of professionals can actually save money in the long run. Talk me through that.
- [24:13]
B
Right? So when you're single, you're doing everything right. You're working, you may have children, you're looking after them, you have to clean your house, you have to cook your food, you have to pay your bill. Somewhere in there you're supposed to sleep, eat a bunch of protein and fiber, and somehow maintain your hygiene and your mental health, right? So even from that perspective, logistically, if you can let the experts take on some of this responsibility so you can continue doing other things. And unless you work in the finance industry, it's always good to have that unbiased third party approach that they will look at your financial situation or your assets, right? Figure out what your net worth is, what kind of liability you have going on, and work with you to create a short, medium and long term plan that, you know, addresses where you want to be next year, five years from now, a decade, and then retirement. Whether you retire at 60 or 75.
- [25:04]
A
I would argue even if you work in the finance industry, you need this. I worked on Wall street for a couple of years and I'll never forget that my boss, I was working in equity research, which means I was assisting a couple of stock pickers. And one day my boss Todd was leaving early and I said, where are you going? And he said, I'm going to see the financial advisor. It's like you have a financial advisor. He's like, you better believe I have a financial advisor. I am good at this one aspect of finance, but it doesn't necessarily translate to my whole financial life. And besides, I'm a busy guy and somebody has to do the work. So I think that no matter what you do, this is something to consider. Who do you need to have on the team? What's a must have and what's a nice to have?
- [25:51]
B
Exactly. And again, you're not like you are not funding this entire team, right? Because like in my list of sort of team members to have, obviously you might want an advisor or a planner. You might want to have just have like the number or the contact of an employment lawyer. Right. Because they can look at contracts for you if you are made redundant. Depending on what state you're in, obviously you could get more money from that. You want an insurance agent, you touch base with them, see where your life is. Do you need more or less insurance? Do you need a different type of insurance? And you might need a family lawyer down the line and a wills and estates lawyer. Right. And then we're not even talking about your friends yet, but these are sort of the professionals that you need and you're probably touching base with them maybe once or twice a year unless a major life change has happened.
- [26:34]
A
And how about on the tax side of things? An accountant, a tax planner.
- [26:38]
B
I am a huge fan of accountants and tax planners. Especially if you have your own business now, if your taxes are fairly simple, you can probably just do it yourself. But I always believe it's always good to have an accountant on hand so you can ask questions. Right. Even it's fairly simple about, is this an expense?
- [26:57]
A
Absolutely. You end the book by saying, in a world that often treats single people as marginal or unworthy and makes it harder for us to eke out a living, know that when it comes to relationships and experiences, your life can still be impossibly rich. So I want to close by asking, what does your rich life look like and what kind of legacy are you hoping to leave behind, financially or otherwise?
- [27:24]
B
I am so, so lucky in the sense that I have a very loving family. My parents are still with me. I have such a good relationship with my brother and my sister in law and their kids. You know, we're in the middle of the week while we're recording this and I think I have talked to about eight friends already about just, you know, what's going on with the book. I went out for drinks with a couple friends yesterday. I've got a couple more things going on. As you can probably tell, I'm a bit of an extrovert and I have a roof over my head, which I'm really, really fortunate about. And I participate in my community. As I said earlier, I've got a residents association meeting this evening. So for me, that's my community and all that. And I am hoping for my legacy is that people remember me as hopefully a genuine person who's willing to help because I'm not leaving millions of dollars, dollars to hospital. I don't have millions of dollars. It's more about me as a human being. I hope as part of their community.
- [28:21]
A
Renee Sylvester Williams the book is the Singles Tax no Nonsense Financial Advice for Solo Earners. Thanks so much for being here.
- [28:29]
B
Thank you so much.
- [28:32]
A
If you love today's episode, please take a moment to leave us a five star review on Apple Podcast. Your feedback means the world to me. Looking to grow your investing skills and make smarter decisions with Your Money in 2026? Join HerMoney's investing picks, the twice monthly women's only investment club where expert stock pickers pitch ideas and you help build the portfolio. Since launching four years ago, our member driven picks have outperformed the S and P. Thanks to smart collaborative choices, we've got a strong track record and a community that's learning and winning together. Tap the link in the show notes and check out Investing Fix today. Her money is produced by Haley Pascalides and our music is provided by Video Helper. Thanks so much for listening and we'll talk soon.
- [29:29]
B
How do the most successful women do it? We ask them on how she does it with Karen Feinerman. You'll get insights from leaders like today's Jenna Bush Hager. There's a lot I say no to, and I think it's a really important word for women to use. Rachel weber of Paris Hilton's 1111 media I'm going to be a much better leader. I'm going to bring more creativity if I have other things filling my life and more. That's how she does it with me. Karen Feinerman Wherever you get your podcasts.