The odds of being single at some point during retirement are high and present unique challenges for both “ever single” retirees who never married and for those who become “suddenly single” in retirement due to divorce or death of a spouse. In fact, 43 percent of Americans age 65 and older are single due to divorce, having never married, or the death of a partner.
These statistics are included in the BMO Retirement Institute’s report Single in Retirement. The release of the report was timed to coincide this week with the
“Being single in retirement is a risk that very few financial advisors are talking to their clients about,” said the Tina DiVito, head of the institute. “They talk about inflation, volatility and health care, but the concept of looking at a client who’s in a couple right now and potentially going to be single in retirement is still a relatively new topic for an advisor to discuss.”
The report outlines a unique set of financial, emotional and planning challenges for those retirees who are unexpectedly widowed or divorced, or who have never married. These include:
Singles are at a greater risk of not having saved enough for retirement because the cost of living for singles is 40 to 50 per cent higher than for married individuals.
Married couples are more likely than their “ever single” counterparts to have a financial plan, to receive help in preparing their plan, and to have a more up-to-date financial plan.
During their working years, singles must devote a larger share of their income to basic living expenses, which leaves a smaller share for savings.
Once retired, both singles and couples may be affected by the constantly rising costs of living and a retirement that could easily last 30 years. This reality is likely to place a greater burden on singles who face these challenges alone.
It is crucial for singles to make sure their retirement plans properly balance income and expenses. Factors like
Housing for a single retiree can pose challenges, whether in the expense of maintaining a household or the fact that many “ever singles” are renters and do not have a house to sell to fund their retirement nest egg. According to the report, many single retirees are exploring unconventional housing options, like communal living or taking on a roommate.
The transition from working to not working can be tough on seniors. Feelings of identity loss and loneliness are normal for all retirees, but it is even more stressful when they have to go through it alone.
Single retirees may have a greater need to plan for the probability of health care expenses, given their lack of extra financial resources and the personal care a spouse can provide.
“Singles face a number of unique challenges as they prepare for retirement,” Di Vito said. “However, whether it be related to savings, housing or health, the key to successfully facing retirement alone is getting an early start on planning and seeking out the help and advice of others when needed.”
This article originally appeared in Financial Planning.
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