Retirement Planning for Singles
There’s a growing trend among the nation’s retirees – unexpected singlehood.
A March report by BMO Financial Group’s BMO Retirement Institute (http://tinyurl.com/c75r4r4) explains why more seniors are finding themselves living alone in their golden years, and it offers some advice on how to deal with it. I encourage you to download the report.
Singlehood Is on the Rise
According to a 2011 U.S. Census Bureau report, 43% of people ages 65 and over are single, either due to the death of a spouse (27%), divorce (12%), or simply because they never married (4%).
These numbers are sure to rise as baby boomers reach retirement age, especially among women, who tend to outlive men by a large margin and whose salaries and pensions tend to be lower than those of men.
Single retirees have a 40-50% higher cost of living compared to married couples, and single women tend to have half the money saved for retirement than that of couples in the same age bracket.
Trying to maintain the same standard of living on one person’s pension instead of two can be daunting. There are also potentially additional expenses that a newly single person can incur when a spouse is no longer there to help with cooking, cleaning, household maintenance, or other necessary functions.
Planning Is Key
Planning for the future is therefore even more important. Think realistically about these facts so that you can be confident in your financial stability going into retirement, regardless of marital status.
Many people may be reluctant to discuss or even think about the possibility of facing retirement alone, but those conversations are essential in order to ensure that the golden years aren’t filled with constant financial worries.
BMO recommends the following strategies:
- Plan for retirement as early as possible.
- Build and sustain wealth.
- Understand income and expenses.
- Consider changes in housing needs.
- Focus on social and emotional well-being.
- Devise a comprehensive health strategy (including end-of-life decision making).
It’s essential that you understand that inflation will increase costs across the board for all of your expenses, so you must have a comprehensive financial strategy going into their retirement years. This strategy should always include options for estate and tax planning, as well as how to grow your retirement savings.