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What Does a Single Woman Need for Retirement?

Aging always comes with challenges, no matter what your personal situation. However, for single seniors, or seniors without children, the complications may be amplified. The support a child or a spouse may usually provide is absent for single seniors. Because of this, saving, investing, planning for housing and health care strategies can all look a bit different. And, according to recent US Census data, only about half of American adults are married, a drop from the more than 70% of adults who claimed married status in 1960. About one-third of baby boomers do not have children and birth rates continue to go down.

With single status becoming more common for aging adults, the questions become more complex. Seniors are not only wondering how much money is enough for retirement or which is the right retirement calculator, they also want to know how to plan for housing and financial security as a single person. In order to do so, it is helpful to understand how retirement planning and financial planning for a single person is different and what changes need to happen along the way.

Understanding the Challenges of Senior Singles

The largest part of senior singles is women. The book The Single Woman’s Guide to Retirement is a best seller, and there is good reason. Women of senior age status who are single are facing quite a few challenges, including:

Women frequently have lower lifetime earnings than men. On average in the US, women in the workforce earn 80 percent of what men earn. Additionally, women in general spend fewer years in the workforce than men. This means that women often have less money to put into savings after paying their bills and they are more likely to go into debt to pay for things, such as a child’s education. Social Security benefits also differ between women and men. In 2012, the average annual benefit for women over 65 was $12,520, compared to $16,308, which was the average annual benefit for men.

Women live longer than men. The average life expectancy for men in the US is 76 years, versus 81 years for women. Five years can be a long time when you consider the cost of living, the cost of senior care and the rising cost of health care services.

Women save less for retirement on average. Fewer than 50 percent of women have employee-sponsored retirement plans. Women who do have support in saving, often have less to contribute after paying for expenses.

Retirement Planning for Single Women

With the challenges facing single female seniors, lots of questions come to mind. How much does a single woman need for retirement? How does a single woman keep money safe? However, before diving into equations about how much money is enough for retirement, it is best to explore planning strategies. These are few ideas to get started:

  • Begin planning way ahead of time. As a sole income earner, you are responsible for the present and the future. In order to get ahead of the curve, and successfully manage unforeseen circumstances, it is best to begin saving as early as possible.
  • Understand your financial needs and resources. It will help you plan if you have an idea of what money you have, how it is being handled, what you will need it for in the future and where you may be able to boost your income levels.
  • Be realistic about the future. There may be life insurance payments or inheritance coming at some point down the road, but those are not things to plan on. Look at your future financial picture with what you have on hand and be honest about what you want your life to look like. A retirement calculator can be a helpful tool in putting together an accurate retirement picture.
  • Research Social Security benefits. As with married couples, it usually makes sense for single women to delay collecting their Social Security benefits for as long as possible. However, it is best to know what you can collect, when you can collect it and what other benefits you may be eligible to receive.
  • Be assertive. Many people prefer a low-risk approach to investing and finances. However, with a little risk can come a larger reward. Taking strong initiative in some places while keeping an eye on the long game can pay off. With any financial decision, it is best to consult with an expert or credentialed advisor.

Financial Planning for Single Women

In simple terms, retirement planning ultimately comes down to knowing how much money is enough for retirement. While a retirement calculator is a great tool for figuring out what your retirement picture could look like, here are a few simple questions to ask yourself:

How much will you spend each month?
The given rule in financial circles is to plan on needing 80 percent of your pre-retirement income during retirement. The rule comes from recognizing that you will no longer be paying payroll taxes toward Social Security, you will no longer be paying into a retirement account and you will not be spending any income on the costs of working, such as clothing and transportation.

Will your money earn your money?
The best way to understand your investments is to consult a credentialed financial advisor. However, here are a few things to note:

  • Since 1926, stocks have earned an average of 10.29 percent per year.
  • Bonds have earned an average of 5.33 percent per year during the same time period, which includes both the Great Recession and the Great Depression.
  • Treasury bills have returned about three percent per year over the last 90+ years.

How long will you live?
While you can work with your care team to make an estimate based on health and family history, there is no way to know the answer to this question. The safest thing to do is to bet on a long life and plan to support yourself accordingly.

Thinking Ahead

Where you want to spend your retirement years is a major consideration. Choosing the right community can offer support for health needs, security in managing the details of life and a chance to live an active, social lifestyle.

For many seniors, both singles and those retiring as a couple, a senior living community has a lot to offer. For example, Rose Estates is known for providing a collaborative environment that meets the needs of each individual resident. With on-site amenities, such as a pool, library and beauty shop, our goal is to ensure each resident feels supported and excited about the next chapter.

To learn more about the meal plans, fitness programs, health services and other amenities, call 913-825-9600.