Retiring single can be nerve wracking. It doesn’t have to be.
Many people dream of the day they’ll get off work for the last time. No more morning commutes, paperwork, or stress. No more long nights or time spent away from family and friends. No more work.
Retirement: It is both right around the corner and a distant speck on the horizon. Even the word retired carries a significant weight. It represents freedom from all work-related responsibilities.
No need to stockpile any more vacation days, in other words, your life simply is one.
Of course, like anything else, it is not quite that simple. Money, and the need to have it, doesn’t disappear the moment you trade in your work slacks for pajama bottoms.
Financial burdens can be even more pronounced for those who retire alone. Not having someone to help shoulder the load can be worrisome for even the most cautious of spenders.
A survey conducted by the Employee Benefit Research Institute found 82% of married couples were confident they would be financially secure in retirement, whereas only 56% of single people felt the same.
Single people were found to be considerably more worried about running out of money, with only 47% expressing confidence they’d make it to the end of their lives with dollars to their names; 74% of married couples responded with confidence that they wouldn’t run out of money before the end.
Not having a partner to pick up the slack was found to be especially concerning for single women. Another retirement study by the Employee Benefit Research Institute that focused on Gen Xers found half of the participants who were at risk of running out of money during retirement were single women.
Keisha Blair, a 31-year-old single mother from New York, wrote a book on holistic wealth and has dedicated time to helping single women learn how to secure financial comfort.
“Many of us end up following the crowd with our money and our spending decisions and end up making financial mistakes,” Blair told Real Simple. “For singles, this can be detrimental to retirement planning and building a solid retirement portfolio.”
Building a retirement portfolio is important, as any financial advisor will tell you, but obtaining financial security isn’t always as simple as managing your 401K and living below your means.
There are many other factors to consider and obstacles to overcome. For a single person, it is imperative to have emergency funds that can get you through challenging times, since you won’t have a spouse’s shoulder to lean on.
“For singles, any life-altering setback, like a job loss or a serious illness, can jeopardize retirement savings,” Blair told Real Simple. “It’s therefore important to ensure that in the event of a setback, you would be financially prepared and that you don’t have to drain your retirement accounts.”
An emergency fund ideally should have enough money in it to allow you to support yourself for nine to 12 months. It is also important for a single person to have a critical illness insurance policy.
As much as we like to think we have complete control of our health, the truth is accidents happen and our bodies can betray us, often with little to no warning. Not being able to work when there is no one else to support you financially can be crippling. You might only be out of work for days, but what happens when it turns into weeks, months, or even longer?
“Everyone gets ill at one point or another, and an illness could prevent you from working for a few months or even years,” Blair told Real Simple. “Being prepared for a serious health issue is very important. You can address those risks with individual disability and critical illness insurance.”
So, while there are real downsides to retiring single, a proactive approach and taking some extra preventative steps can help relieve some of the extra burden.
It isn’t all bad, of course. Staying single often gives you more time to dedicate to your career. This usually means more money. Stashing extra funds away in appropriate and tax-friendly places like a 401K or IRA will pay off over time.
Another place to put extra money is in stocks. Most financial advisors will tell you to stay away from anything that is volatile, since it is more akin to gambling than investing.
Being single only amplifies the need to be more cautious with attained funds. Not having someone to catch you when you fall can be nerve-wracking, but also places the onus and responsibility on oneself.
“I mainly invest in fixed-income securities, such as bonds. When you’re living alone, you cannot afford to take on too much risk as you have no one to rely on,” Scott Hasting, a 34-year-old single from Torrance, Calif., told Real Simple. “This is why I stay away from stocks and crypto.”
Being single also gives you the ability to make your own decisions about what you want to do with your money. Sharing a life with someone usually involves sharing a bank account. Having to compromise, while not necessarily a bad thing, takes the ball out of your court.
John Dealbreuin, a single man from San Francisco, retired at age 41 with around $2.3 million in assets, and told Real Simple the key to his financial success was being frugal and taking advantage of the free time being single offered him.
“My best piece of advice to other singles is to focus on earning more money and utilizing the free time and the lack of location constraint as a single person,” Dealbreuin said. “Invest the additional money generated with your human capital into income-producing assets to achieve retirement.”
While retiring single can be a scary thought, it would appear it doesn’t have to be. Achieving financial independence and retirement security involves taking many of the same steps as your married counterparts.
Being able to rely on yourself, making wise financial decisions, and creating a safety net can make up for the fact you are guaranteed to be the breadwinner.
And, as many single (and perhaps coupled) people would attest, getting married isn’t for everyone.
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