Preparing for a Single Retirement? 4 Tips for Women
Laurence Hale, AAMS®, CRPS®
Principal/Managing Partner, Investment Advisor & Chief Investment Officer
Women in the United States generally retire around the age of 66. 1 For women who retire without a partner or spouse to share the financial responsibilities, there can be significant planning challenges involved. Preparedness is always a key component of securing financial stability and independence, and it’s especially true in this case. Whether you’re single now or not, it pays to create a strong financial strategy so you’ll be prepared for whatever may come in the future. Here are four tips that all women can use to plan and prepare for a peaceful, financially sound retirement.
Tip #1: Have a Plan
A 2020 study found that around 51 percent of unmarried women have not saved for retirement. By comparison, that number drops to 24 percent for married women. 2 The problem is, it’s likely you’ll be spending 10, 20, 30+ years in retirement, so having substantial savings is instrumental. The Department of Labor recommends that retirees prepare to live on 70 to 90 percent of their pre-retirement income in order to maintain their usual standard of living.
If you’re living on a single income, saving for retirement may be extra challenging. Developing a plan with plenty of time to prepare can help improve your retirement savings. To see if you’re currently saving enough, use our Retirement Savings Calculators.
Tip #2: Prepare for Long-Term Care
Someone that is turning 65 today will have almost a 70 percent chance of needing some type of long-term care services and support in the coming years. 3
With that being said, it may be beneficial to consider a long-term care insurance policy to help cover such costs. Even if you have family or friends who can help, long-term sickness or injury may require care beyond what your family can help with physically and financially. How will you be cared for, and who will pay for the care? Assisted living and long-term assistance can be incredibly expensive. Having a plan should you need care can provide peace of mind.
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Tip #3: Consider Delaying Social Security Benefits
Social Security provides benefits and financial protection for women with almost 55 percent of the people receiving Social Security benefits being women. 4 And it provides an inflation-protected benefit that will last as long as you live. When it comes to drawing from Social Security, it is advisable to delay this for as long as you can without going past the age of 70.
If you can delay until that age, your income will increase significantly each year. Even though your Social Security benefits can become accessible at 62, your full retirement benefits will only be available once an individual reaches their full retirement age, which is determined by their birth date. Any benefits that are received before reaching your full retirement age are reduced by a percentage, which is also determined by birth date. This ranges between 25 and 30 percent. 5
According to the Social Security Administration, the reduction in benefits is typically permanent. If you were to access your benefits at 62, the percentage removed would remain even after you have reached your full retirement age. 6
However, if you were to wait longer than the full retirement age to access your benefits, you can receive a retirement credit, which is a percentage based on how long you waited, up to the age of 70. Any Social Security strategy should be considered in the context of your overall financial plan.
Tip #4: Build A Network of Friends and Acquaintances
You may find yourself bored or lonely once you retire, so establishing friendships and acquaintances is a great way to find new activities and friendships. In fact, studies have shown that strong friendships can actually improve your health and prolong your life. 7
Some ways to build new friends and acquaintances could include:
- Attending local events
- Starting a new hobby or interest
- Volunteering
- Joining a walking or exercising group
Retirement planning can be difficult enough as it is, but this can substantially escalate for single women. But by planning well and investing well, you can create a stronger future for yourself so that you can live well in retirement. Working with a financial professional can be invaluable to ensuring you’ve got the best possible strategy for you.
At Weiss, Hale & Zahansky Strategic Wealth Advisors, we use our strategic Plan Well, Invest Well, Live Well process to help our clients do exactly that. If you’d like to get started on building your own tailored strategy to Live Well, and learn more about our team, our client-centric approach, and our services, contact us now.
Presented by Principal/Managing Partner Laurence Hale AAMS, CRPS®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259, 860-928-2341. http://www.whzwealth.com (http://www.whzwealth.com).
1. https://www.oecd.org/els/emp/average-effective-age-of-retirement.htm (https://www.oecd.org/els/emp/average-effective-age-of-retirement.htm)
2. https://www.ebri.org/docs/default-source/rcs/2020-rcs/rcs_20-fs-5_gender.pdf ?sfvrsn=f6bc3d2f_6 (https://www.ebri.org/docs/default-source/rcs/2020-rcs/rcs_20-fs-5_gender.pdf ?sfvrsn=f6bc3d2f_6)
3. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need (http://https://acl.gov/ltc/basic-needs/how- much-care-will-you-need)
4. https://www.ssa.gov/pubs/EN-05-10127.pdf (https://www.ssa.gov/pubs/EN-05-10127.pdf)
5. https://www.ssa.gov/benets/retirement/planner/agereduction.html#:~:text=You%20can%20start%20receiving%20your,your%20benet%20amount%20will%20increase (https://www.ssa.gov/benets/retirement/planner/agereduction.html#:~:text=You%20can%20start%20receiving%20your,your%20benet%20amount%20will%20increase)
6. https://www.ssa.gov/pubs/EN-05-10147.pdf (https://www.ssa.gov/pubs/EN-05-10147.pdf)
7. https://www.health.harvard.edu/newsletter_article/the-health-benets-of-strong-relationships (https://www.health.harvard.edu/newsletter_article/the-health-benets-of-strong-relationships)