Much of what you’ll read about planning for retirement tends to incorporate some common assumptions about the retiree’s family circumstances. But not everyone is preparing for retirement with a spouse, partner, or children. Whether due to widowhood, divorce, never marrying, or not having kids by chance or choice, more people than ever before are approaching retirement single and childfree.
According to Pew Research Center’s profile on single Americans, 28% of adults ages 50-64 are single, and 36% of adults 65 and older are single.(1) The AARP Public Policy Institute reports that 18% of U.S. adults over the age of 50 never had any biological children and that number is on the rise. In 2010, only 12% of women ages 80 to 84 never had biological children, but that number is expected to reach 19% by 2050.(2)
When it comes to retirement planning, this growing segment of the population—known as elder orphans or solo seniors—has different concerns and needs to consider than couples and parents.
Advantages of Solo Retirement
The prospect of retiring without a spouse, partner, or adult children to look out for you may sound lonely and scary for some, but many retirees welcome what they consider an empowered state of independence. They can make their own decisions without others meddling in their affairs, have lower expenses, and are free to travel and spend time with family and friends as they see fit.
In some cases, solo seniors had fewer financial burdens along the way, allowing them to build a sizable nest egg. Not having a partner to share household expenses may spread the budget thin for lower-income singles, but a solid middle-class income is more likely to support a single person comfortably.
Non-parents are able to save without the expense of raising a child, which averages at around $233,000 each (conservatively), or paying for university tuition, which can average as much as $177,000 per student for private education.(3)
For those who find themselves unexpectedly alone or who find the circumstances undesirable, single retirement can be especially challenging. But even those who prefer an independent lifestyle and expect to retire on their own need to plan for some special considerations.
Here are 7 steps for single seniors to retire confidently:
1. Calculate your budget and expenses
The first step to retiring single is making sure you have sufficient income to meet your living expenses. The sooner you begin saving and investing, the better. A financial advisor can help you make investment decisions, balance your portfolio, and convert your assets into income in a tax-efficient manner.
Look carefully at your Social Security, including any relevant benefits from exes and widow or widower benefits. If you are divorced, you may qualify to receive part of your ex’s 401(k) and IRAs as well, so it’s important to speak to a financial professional about this.
You should also have substantial emergency savings set aside. Major expenses can arise at any time; when you are on a fixed income, not prepared, and unable to ask family for help, you can find yourself vulnerable to hardship. Remember, as you get older, your home and car are likely getting older too, and you are more likely to have a medical emergency. So the more you can save, the better.
2. What do you want retirement to look like?
Retirement planning is about more than just crunching numbers; it should also include planning for life after working for a living. People often look forward to retirement so they can spend more time with their adult children and grandchildren, only to be disappointed to find that their family is busy living their own lives. So solo seniors are not the only people who should be thinking about how they will fill their days.
Think about the activities that you will find most fulfilling and that bring you joy. Create a bucket list and check off as much as you can. Take a class, volunteer, write a book, adopt a dog, start a garden, get involved in your church or spiritual community, travel, and do whatever you’d like. You’ll finally have the time to do many of the things you always wanted to do and you’ll have more flexibility than retirees who are tied down with more family commitments.
As a solo retiree, you have the flexibility to downsize your expenses and perhaps even move to a retiree-friendly foreign country. Keep an open mind and you could be up for quite an adventure.
Mental and physical decline happens more quickly among retirees that lose a sense of purpose and meaning. It’s important to fill your calendar with more than doctor’s appointments, errands, and funerals.
3. Build a strong social network
As you get older, it’s also essential to surround yourself with a support system of community members and loved ones. You should be able to call on people for everything from companionship to help when you need it, and they should be able to call on you, too. Everyone wants to feel needed and useful; it’s a natural human desire.
Having a mix of close friends, relatives, chosen family, and casual acquaintances will keep you busy, active, and engaged in life. You’ll want people to notice when they haven’t heard from you and think to check in on you. And it doesn’t have to be people you’ve known for years; you’re never too old to make new friends!
4. Consider your health
Going into retirement on your own means you will probably have to take care of your basic needs for longer than someone who has more access to family support. If your health and abilities decline, hiring help will be expensive.
Be sure to have full medical exams and regular check-ups to catch major issues before they advance and keep an eye on the progression of any potential chronic conditions. Eating a balanced diet, getting plenty of exercise, and prioritizing self-care is key to maintaining your independence.
As soon as possible, look into disability insurance during your working years and long-term care insurance; these policies can be pricey but are arguably more important to you than life insurance. Remember, you only have your own income to rely on, and becoming disabled is more common than most people realize.
5. Explore housing and care options
While other families have conversations about where mom and dad are going to live, solo seniors get to decide for themselves. While you may not have the option to move in with family, that’s not always a possibility for people with kids either.
You have the opportunity to pick when and where you move, including the type of accommodations. Whether you choose to move into a 55+ community, retirement home, a co-housing development for seniors, or share a house with a friend or roommates, there are more options available than you might think.
At some point, you’re likely to need some additional help. It’s best to research what’s available early and get everything lined up far in advance. There are non-profit volunteer organizations that help by running errands and offering support for seniors, as well as private home health care aids, government-assisted community programs, a wide variety of assisted living facilities and nursing homes, and even foster care programs for “orphaned” seniors with nowhere to go. Your options depend on your resources, obviously, but you are not alone.
6. Determine who to trust with important decisions
When you’re not married, in a committed relationship, or a parent, there isn’t always a default person with a legal or moral obligation to look out for your best interests. No matter how close you are with friends, relatives, or loved ones, societal norms do not dictate that someone will take the initiative to step into this role, and more importantly, our legal system will not recognize a member of your “chosen family” as a valid representative.
It’s critical that you decide who will carry out health care and financial decisions in the event that you become incapacitated, and put legal directives in place, such as health care proxies and powers of attorney. Be sure to have a conversation with each person first to confirm that they’re on board; keep in mind, people have their own responsibilities and limitations, so don’t take offense if they are unable to commit.
You should also have backups in place, and note that a professional, such as your primary care physician, attorney, or financial professional could be assigned some of the responsibility.
7. Handle your estate planning
Whether you’re planning to be someone’s rich uncle or aunt who leaves them with a sizable inheritance or you’ll have just enough to cover your debts and burial expenses, it’s important to handle your estate planning early and review and update it regularly. No matter the amount of assets you hold, your affairs will need to be settled and closed out.
Even if you don’t have a close family member or friend to leave an inheritance to, you probably have a cause or charity that you’d like to support with a donation, rather than letting the state absorb your assets or determine next of kin. You’ve worked hard for what you have; see to it that what you leave behind falls into the right hands.
Planning for the Future
If you are going to be a single retiree, rest assured that with proper planning and preparation, you can have a bright future and happy retirement ahead of you. If you know someone who will be a solo senior, share this article with them; chances are, much of what they are reading about retirement doesn’t address their needs or concerns.
Robert "Fenn" Giles, Jr., MBA, CIMA® is a founding partner of Wealth Advisors of Tampa Bay (WATB) and acts as the firm’s President and Chief Investment Officer. WATB is an independent Registered Investment Advisor (RIA) located in Tampa, Florida. Learn more about them at wealthadvtb.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This material was prepared by Crystal Marketing Solutions, LLC, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate and is intended merely for educational purposes, not as advice.