Impact of Marital Status on Stock Ownership Decisions
Couples who are married are statistically more likely to own stocks than single individuals, according to recent research. While the higher household income achieved with two paychecks plays a significant role, it's not the only factor at play.
Married couples are more likely to have tax-advantaged retirement accounts and be invested in stocks, either personally or jointly with their spouse. According to Gallup's latest survey data, 77% of married Americans report owning stocks, compared to 49% of single adults.
The reduced risk in one area of a married couple's economic life allows them to take on more risk via the stock market. If one partner were to lose their job, the other's salary would help bridge the financial gap, making unexpected layoffs or medical bills less likely to deplete savings or force the sale of investments. This cushion encourages married couples to open brokerage accounts earlier and keep contributing through market downturns.
Some economists see marriage as a "safe asset" that lowers overall household risk, particularly for women. Households became nearly ten percentage points more likely to own equities within two years of marrying, with married women showing increased stock ownership. However, married investors, particularly women, may under-diversify by overweighting employer stock or keeping excess cash.
Even if one partner isn't an investor, social learning often comes into play. If the other partner has experience in the stock market, they are more likely to join in after moving in together. This trend is more pronounced among single men, who are more likely to be shareholders than single women.
While marriage raises stock market participation, singles can take steps to bridge the gap. Automating contributions, building an emergency fund, and seeking accountability from a friend, financial planner, or roboadvisor can help replicate the risk-sharing and information benefits that married couples enjoy naturally. Ultimately, relationship status should inform, but not dictate, investment choices.
- married couples often have brokerage accounts for trading stocks, either individually or jointly, which contributes to their higher stock ownership as compared to single individuals.
- The enhanced economic stability of married couples, reflected in factors like tax-advantaged retirement accounts and lower risk due to dual incomes, encourages them to invest more in stocks.
- Social learning plays a significant role in personal-finance decisions within relationships, with one partner's experience in trading stocks potentially influencing the other, even if they are single.
