Retiring Single: 5 Questions to Help You Plan

June 10, 2022
If you're a single retiree, you face special considerations for everything from saving enough to planning for incapacity. These five questions will help you get ahead of any potential challenges.

While many Americans imagine entering into retirement hand in hand with a partner or spouse, that isn't always the case. Nearly a third of men and more than half of women over age 65 are widowed, divorced, or have never been married, according to a 2021 report from the U.S. Administration on Aging.

While retirement advice for singles can seem similar to that of couples, there are some important differences to consider. "All retirees will need to replace a paycheck to meet ongoing expenses, plan for unexpected expenditures, and address health care and other needs," says Rob Williams, managing director of financial planning at the Schwab Center for Financial Research. "However, some of these goals can be uniquely challenging to singles, in particular."

Here are five questions every single should ask themselves as they plan for this new phase of life.

1. What's my retirement vision?

If you've been on your own for a while, your plan may already account for a solo retirement. But those who are newly single will need to revisit their assumptions and savings targets with their new situation in mind. "Planning is important after any major life event, but especially if it affects your livelihood," Rob says. "Regardless of the reason for being single, now is the time to figure out what you want for this next stage of your life."

While savings and investments are core parts of any retirement plan, Rob urges single retirees to consider other aspects of life in retirement besides sources of income—including health care needs and a community that can help counter the social isolation common among elderly singles.

As you build and stress-test your retirement plan, factor in your potential longevity. For example, if you're in excellent health and likely to live for several decades, you might consider a larger allocation to stocks than to fixed income. "At some point, the risk of outliving your savings because you've invested too conservatively may become greater than the risk of suffering short-term losses in a down market," Rob says.

2. Are my savings on track?

Only 56% of unmarried workers were confident about a comfortable retirement in a survey conducted last year by the Employee Benefit Research Institute—compared with 82% of married workers—perhaps because two really can live as cheaply as one. "Living expenses like heat and housing aren't necessarily less just because there's only one of you," Rob says, "which makes a robust savings plan all the more important."

Ideally, that means contributing the maximum amount to your 401(k) or other workplace plan each year, plus so-called catch-up contributions once you reach age 50. If you have a health savings account (HSA), consider maxing it out as well, as health care costs are likely to account for a significant portion of your ongoing expenses in retirement (see No. 4).

Retirees should also expect the unexpected. "An emergency fund is critical for all retirees—but even more so for singles since they'll be footing any unexpected bills themselves," says Rob, who recommends having enough cash on hand to cover a year of spending—minus any guaranteed retirement income like a pension or Social Security. Rob also reminds retirees to consider maintaining two to four years' worth of anticipated portfolio withdrawals in relatively stable investments, such as cash investments or short-term bonds or bond funds, to avoid having to sell during a down market.

3. When should I collect Social Security?

You can start collecting Social Security benefits as early as age 62, but doing so will permanently reduce your benefits. Conversely, for every year you delay collecting past your full retirement age (between 66 and 67, depending on your birth year), you'll receive roughly an 8% boost to your payouts. And if you can wait to collect until age 70—after which there is no incremental benefit for delaying—you'll collect roughly 77% more than if you had begun collecting at 62.

Time = money

The longer you wait to collect Social Security, the bigger your permanent monthly payout will be.

For an individual born in 1960, collecting Social Security at age 62 means reducing your payouts to 70% of what they would be at age 67 (full retirement age), whereas waiting until age 70 would increase payouts to 124% of your full benefit.

Source: Social Security Administration.

*Represents full retirement age (FRA) based on birth date of 01/02/1960.

†Primary insurance amount (PIA) is the basis for benefits paid.

Rob says single retirees in good health should wait as long as possible to claim their benefit, even if that means using savings and/or securing part-time income as a bridge to fund retirement spending. "Social Security is a guaranteed income source that increases with inflation and will last as long as you do," Rob says. "In that sense, it's a form of insurance in case you live longer than average. Not even the best investments can offer that."

If you're divorced or widowed, there are additional considerations:

  • Divorced retirees who were married 10 years or more and who haven't since remarried may be eligible for a Social Security benefit of up to 50% of their ex-spouse's full retirement-age benefit. If your ex-spouse passes away, you may remarry and still be entitled to part of her or his benefits if your remarriage occurs after age 60 (50 if you're disabled). While your marital status doesn't affect your eligibility for Medicare, you may need to pay Part A (hospital insurance) premiums if you didn't work and pay Medicare taxes for at least 10 years. In that case, divorced retirees who were married for 10 years or more and who haven't since remarried (or who have remarried after their ex-spouse's death and after age 60) may be able to use their former spouse's earning record to avoid such premiums.
  • Starting at age 60 (50 for those who are disabled), widowers and widows can collect a reduced amount of their late spouse's Social Security benefit or wait until their full retirement age (between ages 66 and 67) to collect 100% of their benefits. (You'll lose these benefits if you remarry before the age of 60.) If widowers and widows also qualify for their own benefits, they could potentially switch to their own (if higher) up to age 70. Widows and widowers, too, can rely on a spouse's work history to avoid Medicare premiums, provided they were married at least nine months before their spouse's death. By law, private defined-benefit pension plans must provide a pension to the spouse of a deceased employee, though the payouts may be less than the employee's full benefit. Many federal, state, and local government plans offer similar protections.

4. Have I planned enough for health care?

Estimates for health care costs in retirement vary widely by methodology, but one analysis concludes the average retiree will spend $4,500 per year on out-of-pocket expenses, excluding any long-term care costs.1 Assuming modest price inflation, a single retiree could expect to pay close to $200,000 on health care costs over 30 years.

What's more, some 70% of people turning age 65 can expect to require some form of long-term care during their lifetimes.2 While unpaid caregivers—typically loved ones—provide the vast majority of such help, paid care is likeliest among unpartnered people, with singles making up some three-quarters of nursing home residents.

"Because singles don't have a spouse or possibly children to lean on, planning for long-term care risk is even more important," Rob says. "A good retirement plan will consider these risks and prepare for them, whether that involves family support, personal savings, long-term care insurance, or some combination of all of the above."

Although long-term care insurance premiums can be expensive, extended long-term care without insurance can quickly deplete your nest egg or result in less-than-ideal care if your savings run out. For example, the average cost of care in a nursing facility now exceeds $90,000 a year for a semiprivate room and $105,000 for a private room, and the average stay is nearly 2½ years. The most cost-effective time to buy long-term care insurance is generally between ages 50 and 65. 

5. What are my emergency and estate plans?

"In the absence of a spouse, singles of all ages should take special care in articulating and documenting their wishes in the event of incapacitation or death, lest the courts decide for you," Rob says. That includes:

  • Establishing powers of attorney who can act on your behalf if you become unable to make financial or medical decisions yourself.
  • Designating beneficiaries on all retirement accounts and establishing transfer-on-death provisions for all other financial accounts.
  • Drafting a will with clear instructions for who should inherit your nonfinancial assets and other property.

Singles who don't have immediate family members who can act as trustees and executors for trusts and wills may wish to consider a close friend or even a professional to serve in those roles.

"Single retirees should work with an estate attorney who can help them think through the various considerations," Rob says. "Otherwise, you risk overlooking important details that can make settling your estate much more challenging."  

Schwab Personal Trust Services

Professional trust management can help give you options for the future.

A corporate trustee provides financial expertise, unbiased decision-making, and fiduciary responsibility for the duration of a trust. For example, Schwab Personal Trust Services, administered by Charles Schwab Trust Company, will:

  • Administer your trust according to your wishes as set forth in the trust agreement.
  • Invest your trust's assets to benefit future generations.
  • Handle the preparation and filing of trust income tax returns.
  • Put the interests of the trust and your beneficiaries first.
  • Allow you to originate your trust in Nevada, which may offer greater creditor and divorce protection.

Of course, there's no one-size-fits-all solution for every trust creator. The consulting team at Schwab Personal Trust Services can help you think through the options and capabilities that work best for your needs.

Learn more about Schwab Personal Trust Services.

Getting help

Retiring single doesn't have to mean going it alone. A trusted financial planner can help navigate the challenges unique to a solo retirement.

"A good retirement plan will be interactive, engaging, and ongoing—not a simple one-time calculation," Rob says. "The key is to find an advisor who you can trust to stay engaged with your plan."

1Nicholas Halen, Kelli Faust, and Todd Taylor, "Understanding the True Cost of Health Care in Retirement," Retirement Management Journal, 11/01/2020, https://ssrn.com/abstract=3753762.

2"How Much Care Will You Need?," LongTermCare.gov, 02/18/2020, https://acl.gov/ltc/basic-needs/how-much-care-will-you-need.

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