There’s a growing segment of Americans who are entering retirement alone. Researchers cite several reasons for this, including the fact that fewer people are getting married and the dramatic rise in people over 50 getting divorced (the so-called “grey divorce” trend).1
Much ink has been spilled on the societal implications of solo retirees and entering retirement alone.
From a purely financial perspective, it’s optimal for a household to enter their retirement years with an intact marriage and a retirement income built from two careers.
However, what’s financially best in life is not the actual experience of many people.
The good news is that it is possible to retire successfully (or continue to stay retired) as a single person. But to make it work requires careful planning, financial discipline, and a willingness to make trade-offs.
In a piece on singles and retirement for Kiplinger, Kaitlin Pitsker writes that while only 23% of married men and women say they feel “not at all financially secure,” that number jumps up to 38% for singles. In most cases it’s just simple math. One person typically doesn’t generate as much income as two people together can earn.
Ideally, a person who intends to retire as a single should plan for this scenario decades in advance. Pitsker gives the example of a 67-year-old woman who is able to work part-time at a job she loves (college professor) because she planned for this eventuality in her 40s.
However, it is possible for someone who does not have 30 years to save to still have something to retire on. A person who becomes single at age 50 and has little saved for retirement, can aggressively build a nest egg during his or her remaining peak earning years.
Singles need a different strategy from their married friends for everything from when to take Social Security to how to set up their estate. Other important decisions include who to give power of attorney and how to get help as they age.
For all these reasons just thinking about retiring as a single can seem overwhelming. But a trusted advisor can help come up with a plan to make it possible while offering the encouragement and accountability to see it through.
Citations:
1 –https://getpocket.com/explore/item/planning-for-retirement-as-a-single-person
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