Single In Retirement

Single in Retirement

At a time when American longevity continues to increase, long term retirement planning has become more challenging than ever. When financial security has been shaken by the weak economy, market volatility, depressed housing prices, and the rising cost of health care, Americans have been forced to adjust their expectations and retirement plans. Exacerbating the challenge of planning for a longer retirement is the fact that – by chance or by design – a large number of us will face retirement alone.

Recent research shows it’s becoming increasingly common to retire single. According to the 2011 US Census Bureau, 43% of seniors age 65 or older are single.  Of that forty-three percent , 4% have never married, 12% are divorced, and 27% are widowed.


What is driving the trend? 

Midlife divorce. According to the Vanier Institute of the Family, 44% of marriage in the US will end in divorce before the couple’s 30th anniversary.  (2011 Census Bureau)   After years of sacrifice spent raising children and juggling priorities, boomers increasingly seek freedom and self-exploration as a reward later in life.

Outliving a spouse.  For women especially, the chances of outliving a spouse are high.  According to the 2011 US Census, 40% of women age 65+ are widowed, compared to 12% of men the same age.

Choosing not to marry.  Recent population data shows less people are marrying now than in previous generations. Unmarried young adults ages 25 to 34 outnumbered their married counterparts by 2 percent, and that number is rising.

Six Key Considerations
1.  Plan for retirement as early as possible 

Without another source of financial support to cushion them, planning for retirement and protecting against loss of income becomes even more important for singles. According to a 2009 American Academy of Actuaries report, the cost of living for singles is 40-50% higher than for married individuals, yet singles are at greater risk of not having saved enough for retirement. Not only are couples more likely to have dual incomes and access to health and pension plans, they also appear more likely to discuss their retirement plans together and are more actively engaged in long term financial planning.

2.  Build and sustain wealth 

During their working years, singles must devote a larger share of their own income to basic living expenses. This leaves a smaller share for savings and can put singles at a disadvantage early on.   Singles who lose a spouse through death or divorce later in life may lose valuable time in establishing their own retirement savings. The fact that we are living longer is a factor facing both married couples and singles, but singles may need to invest more aggressively before and during retirement to compensate for a lower saving rate and smaller nest egg.

Women are generally worse off than men in this regard, as they average lower incomes and tend to bear the burden of child care.

3.  Income and expenses 

Single retirees have fewer Social Security options than married spouses. A married spouse has the option of claiming social security benefits based on his own earning record, or claiming up to 50% of the spouse’s benefit, and receiving the higher of the two. Couples in dual-earner marriages can strategize how to best coordinate their Social Security benefits not only during their joint retirement years, but also to boost the survivor benefit should one spouse die prematurely.

Those who become single later in life will find that many basic life expenses remain relatively constant even after a retiree becomes single. Rent or mortgage, property taxes, home maintenance, vehicle fuel and repair, and utilities all still need to be paid, even if the once dual-income household has now become single. And once retired, the increasing cost of care and the lengthening duration of retirement can put a particular burden on individuals who face these challenges alone.

4.  Consider changes in housing needs

Housing is expensive, especially for singles. Often times singles are renters rather than home owners, so selling a house to help fund retirement may not even be an option. According to a 2010 US Census report, seniors age 65 and older represented 29% of all people who live alone. Approximately 557,000 seniors who fall within that age group are involved in some type of shared housing arrangement, and that trend is growing.

5.  Focus on social and emotional well being

The transition from working to retirement can be stressful even for the most prepared. Feelings of identity loss and loneliness are common, and are often heightened for those going through it alone. Staying socially connected and active in the community can have a direct, physical impact on health.

6.  Devise a comprehensive health strategy

Single retirees have a greater need to plan for health care expenses, given their lack of extra financial resources and the personal care that a spouse could provide. Deciding whether to purchase coverage such as Disability Income or Long Term Care can be difficult when finances are already tight. As a single individual, protecting your income can mean the difference between financial success and disaster.

Women who find themselves single in retirement may face additional challenges. Many have lived most of their lives as part of a couple, and never considered the complex path of the single retiree. Death or divorce can quickly turn the tables and leave women particularly vulnerable. For the most part, women are still earning less than men and tend to have worked fewer years while raising children. This all translates into fewer savings and less access to benefits such as retirement plans and social security.

Despite these challenges, a 2011 report from Charles Schwab Corp showed the following:

  • 53% of married Americans and 69% of      single Americans believe financial decisions are easier to make when      single.
  • 58% of those married say the decision when to retire      would be easier if they were single, while 62% say the decision where      to retire would be easier without a spouse.

As they say… the grass is always greener!


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