Plan Single Retirement Challenges

Whether you are single for your entire retirement, or for part of your retirement, there are several challenges that the financially single woman faces as a result of being single.  With proper consideration and some advanced planning, these challenges can be mitigated, and even overcome.

Solo Decision Making:  On the plus side, you largely can make decisions to please yourself and your needs.   You don’t need to compromise with someone else about things like, where you live, what you do with your time, or how you spend your money.   That said, it also means you may lack someone to discuss different decisions you are making or concerns you have.   Without discussion, you may not realize the full options available to you or other ways forward.   While you may not have a spouse to talk these things through with, do you have a really good friend?  Do you have a family member, a colleague or a mentor that you can really talk to?  Maybe your financial advisor will help you talk it through.   When we talk about money and financial decisions, we are far less likely to repeat other people’s mistakes and we are far more likely to come to the right decision for our own lives.  Remember, just because you are single, doesn’t mean you are alone.

Major Purchases:  A surprising thing I have heard from many widows is a common concern that they “don’t want to get ripped off”.   They didn’t fear that when they had a life partner.   I have heard single women express similar feelings.   In fact, Ardelle, the co-author of Bank on Yourself – Why Every Woman Should Plan Financially to be Single, Even if She’s Not expressed that, as a woman who has always been single, she is especially concerned about being taken advantage of when it comes to shopping for major purchases and dealing with contractors.  In our book, Ardelle shared her solution has been to “borrow a husband” (whom she always returned).  Now, I like to think it isn’t a gender issue, but maybe it is.   Where there certainly is value in taking someone with you, is in negotiation.   A second set of ears might pick up on different avenues to bring the cost down or get extra benefits thrown in.   The second person may also think of questions you hadn’t thought of, and the answers ultimately influence your decision.   Again, enlisting the help of someone who supports you, to accompany you at the time you are doing your shopping or interviewing trades, can help you gain confidence that you are getting a reasonable price, the quality you are wanting and a timeframe you are comfortable with.

Retirement Income: Those who are single their whole lives, or who are single for a number of years leading up to retirement, have an advantage.   They are actually planning their retirement based on being single.  While it can certainly be difficult saving during your working years having just one income earner, and a single person will likely need to save more than 50% of what a couple needs to save for the same lifestyle, having that headstart will make it more likely to achieve financial independence.   You are already planning to pay more taxes for the same level of household income because don’t have the ability to pension income split.   Single people plan for just one set of government benefits and those with a pension know what their pension is for their lifetimes.  Your investments and other assets are your own.   And when a plan includes this information and reasonable assumptions says they can afford to retire; a single person can be fairly confident in their ability to retire comfortably.   Someone who finds themselves single again on the doorstep of retirement or when they are already retired most likely hasn’t planned for it and runs the risk of finding out the plan for the both of them won’t work when only one remains.

Well-Being Later on in Life: Perhaps the largest challenge single people face is who will care for them if they need it, and how to cover the costs.   While those with a spouse or with children may benefit from some care provided for by the family, those without a spouse or without children (or willing and able children) most likely will have to pay for it.  Who will fill the roles of Power of Attorney for Finances or Power of Attorney for Personal Care?   These are important jobs that require a trustworthy, competent and compassionate person or entity.    Someone with family can have a family member take on the role but a single person may have to pay for the service.  While the good news is there are trust companies who will take on Power of Attorney for Property roles and living wills can be drafted by lawyers to make sure your finances are professionally taken care of and your health care wishes are respected,  single people many times have to be able to cover such expenses.

Being single for all or part of your retirement brings challenges specific to marital status.  Regardless of whether you are single today or in a position where you could be single again in the future, planning for your retirement as a single person results in having plans that provide for higher costs like taxes and healthcare.  Hopefully, it also means building a relationship with others that you can talk money with.   Yes, there are challenges, but once you identify yours, you can also set in motion plans to overcome them.

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