2832: Are You Alone and Planning for Retirement? Retirement Planning for Singles by Kathleen Coxwell of NewRetirement

[00:00:00] [SPEAKER_00]: This is Optimal Finance Daily. Are You Alone and Planning for Retirement Planning for Singles by Kathleen Coxwell of NewRetirement.com?

[00:00:11] [SPEAKER_00]: And on your host and personal finance enthusiasts, Dianomarium, we're going to jump right into today's post as we optimize your life.

[00:00:23] [SPEAKER_00]: Are You Alone and Planning for Retirement Planning for Singles by Kathleen Coxwell of NewRetirement.com?

[00:00:32] [SPEAKER_00]: A lot of retirement advice skews towards married couples, but what about those who are single?

[00:00:39] [SPEAKER_00]: Many retirees today are divorced, widowed or never married. This means they're doing their planning for one instead of for two,

[00:00:48] [SPEAKER_00]: and that they're relying on their own sources of retirement income rather than those of a spouse.

[00:00:53] [SPEAKER_00]: The divorce rate among adults aged 50 and older doubled between 1990 and 2010 found researchers at Bowling Green State University,

[00:01:03] [SPEAKER_00]: and roughly one in four divorces in 2010 occurred among people aged 50 and older.

[00:01:10] [SPEAKER_00]: Planning for retirement when single has its advantages, says David Blanchett, had a retirement research at Morningstar Investment Management.

[00:01:19] [SPEAKER_00]: He says, quote, someone who's single doesn't have to prepare for his long-aver retirement as a married couple.

[00:01:26] [SPEAKER_00]: A married couple is planning for the longest surviving partner, not just one person and quote.

[00:01:33] [SPEAKER_00]: But being single also presents unique financial challenges, such as not sharing the cost of housing, food or other expenses that will likely increase as you age,

[00:01:44] [SPEAKER_00]: and that can be reasoned for concern.

[00:01:46] [SPEAKER_00]: Single workers over the age of 50 are less confident in their ability to fully retire and a lifestyle they consider comfortable than their married counterparts.

[00:01:56] [SPEAKER_00]: At six to 12 percent, accordingly, according to the 10th Annual Trans-America Retirement Survey,

[00:02:04] [SPEAKER_00]: and single women are even less confident with only 2 percent responding that they're confident about living in a comfortable lifestyle in retirement.

[00:02:13] [SPEAKER_00]: That might explain why 42 percent of single workers over the age of 50 say they expect to work longer and retire at an older age than their married counterparts at 32 percent, the Trans-America Survey found.

[00:02:29] [SPEAKER_00]: Yet those who are single are also less likely to have a written retirement plan, at 10 percent compared to 16 percent of their married counterparts.

[00:02:39] [SPEAKER_00]: Single women have median retirement savings of just 35,000 compared with 70,000 for single men and 153,000 for married women to survey found.

[00:02:52] [SPEAKER_00]: As a general rule, you'll need at least 15 to 20 dollars in savings to cover each dollar of the annual shortfall between your income and your expenses according to CNN money.

[00:03:04] [SPEAKER_00]: Here are three important questions to ask yourself if you're single and planning for retirement.

[00:03:11] [SPEAKER_00]: Number 1. What is my long-term healthcare plan?

[00:03:15] [SPEAKER_00]: Blanch it says quote, if your married, your spouse can take care of you if something happens, but what happens if you're by yourself?

[00:03:23] [SPEAKER_00]: It behooves someone to look into these contingencies.

[00:03:26] [SPEAKER_00]: And quote, if you have children think about what role they might play in your healthcare as you age, he advises.

[00:03:34] [SPEAKER_00]: In addition, think about whether your home will support you as you age.

[00:03:39] [SPEAKER_00]: Senior retirement communities can offer a lot of advantages including socialization and staff to help with day-to-day tasks as needed for those with health issues.

[00:03:49] [SPEAKER_00]: He says quote, you may want to consider looking into a nursing home.

[00:03:54] [SPEAKER_00]: It really helps for someone to know for certain if something were to happen that they have this plan and quote.

[00:04:02] [SPEAKER_00]: He asks that long-term care insurance can be especially useful for those who are single.

[00:04:08] [SPEAKER_00]: Long-term healthcare is a category of healthcare for people who are physically or mentally unable to care for themselves.

[00:04:15] [SPEAKER_00]: Long-term care insurance can save you from spending hundreds of thousands of dollars on healthcare, possibly exhausting your retirement savings.

[00:04:24] [SPEAKER_00]: Should you need this level of care when you're older?

[00:04:27] [SPEAKER_00]: Number 2. What will be my sources of revenue in retirement?

[00:04:32] [SPEAKER_00]: Besides savings, guaranteed retirement income streams can be extremely important to a retiree.

[00:04:39] [SPEAKER_00]: Guaranteed income income that you will receive for as long as you live no matter how long that is can come from social security and some annuities and pensions.

[00:04:50] [SPEAKER_00]: Blanch it says quote, someone who is single may find more of a benefit from social security or annuities.

[00:04:58] [SPEAKER_00]: Annuities.

[00:04:59] [SPEAKER_00]: An annuity or insurance product that pays out income allows you to make an investment in the annuity and then makes payments to you, giving you a dependable income stream during retirement.

[00:05:12] [SPEAKER_00]: There are many different types of annuities. The two main types of annuities are fixed and variable.

[00:05:18] [SPEAKER_00]: Fixed annuities guarantee a certain base of income per month while the amount of income you receive from a variable annuity can depend on underlying investments.

[00:05:29] [SPEAKER_00]: So for a variable annuity, if the investments behind the annuity are doing well one month, you would receive more money that month than you would when the investments behind the annuity are doing poorly.

[00:05:41] [SPEAKER_00]: Social security.

[00:05:43] [SPEAKER_00]: Social security can represent up to 40% of the total income Americans receive throughout retirement.

[00:05:50] [SPEAKER_00]: However, only 15% of women wait until their full retirement age and only 3% take it late according to a survey by the nationwide retirement institute.

[00:06:01] [SPEAKER_00]: If you've reached normal retirement age, which is 66 for people who were born between 1943 and 1959, you can access 100% of your benefits.

[00:06:13] [SPEAKER_00]: For each year after that up to age 70, your benefits increase 8% meaning you can access 32% more at age 70 than at age 66.

[00:06:25] [SPEAKER_00]: Nearly half or 49% of single workers over 50 saved they expect social security to be their main source of income according to the TransAmerica survey.

[00:06:37] [SPEAKER_00]: And 57% of single women were most likely to cite social security as their expected primary source of income.

[00:06:45] [SPEAKER_00]: On average, women have a longer lifespan than men according to data from the Social Security Administration, giving them even greater reason to maximize retirement income by delaying claiming Social Security.

[00:06:59] [SPEAKER_00]: A woman turning age 65 today can expect to live on average until age 86, whereas a man turning 65 today can expect to live on average until age 84.

[00:07:13] [SPEAKER_00]: And one in four women reaches the age of 92.

[00:07:17] [SPEAKER_00]: If you're divorced, you may also want to explore claiming your own benefits versus claiming benefits based on your ex spouse's income.

[00:07:25] [SPEAKER_00]: You may also want to consider claiming your ex spouse's benefits when you're 62 and then switching to your own benefits when you reach the maximum retirement age.

[00:07:36] [SPEAKER_00]: And number three, how will I spend my time in retirement?

[00:07:40] [SPEAKER_00]: Thinking about your day-to-day activities as well as bigger plans in retirement will help you determine how much you need to save.

[00:07:48] [SPEAKER_00]: Single workers report that they will need $300,000 to comfortably retire and single women report less than single men at 250,000 and 500,000 respectively, according to the TransAmerica survey.

[00:08:02] [SPEAKER_00]: Blanch it says quote, think about how you're going to spend your time.

[00:08:08] [SPEAKER_00]: If you're going to be traveling to see your kids, grandkids or going out to eat with friends more, that will all impact retirement costs.

[00:08:20] [SPEAKER_00]: You just listen to the post titled, Are You Alone and Planning for Retirement?

[00:08:25] [SPEAKER_00]: Retirement planning for singles by Kathleen Coxwell of newretirement.com, and I'll be right back with my commentary.

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[00:09:36] [SPEAKER_00]: Whether you're single or married when planning for retirement, there are always unknowns that can make the process challenging.

[00:09:43] [SPEAKER_00]: Personally, I felt more nimble, flexible, and had lower expenses when I was single.

[00:09:47] [SPEAKER_00]: When planning for two people, you double the number of unknowable factors and potentially conflicting or changing preferences.

[00:09:57] [SPEAKER_00]: There are certainly pros and cons to either scenario, but I think the process of retirement planning is very similar.

[00:10:05] [SPEAKER_00]: Even if you are married or have kids, it's important to consider your need for self-sufficiency in retirement.

[00:10:11] [SPEAKER_00]: It's possible that your kids or spouse won't be in a position to assist you if your health fails, or your spouse could pass away unexpectedly.

[00:10:21] [SPEAKER_00]: Therefore, regardless of marital status, ensure you have your own savings, investments and a solid financial plan.

[00:10:29] [SPEAKER_00]: Prioritize health and well-being by staying active and maintaining regular checkups, also think about housing options that can support aging and place.

[00:10:38] [SPEAKER_00]: And keep a strong social network to maintain emotional and mental health.

[00:10:43] [SPEAKER_00]: Planning for emergencies and staying adaptable to changes will help you navigate retirement smoothly, regardless of your marital status.

[00:10:52] [SPEAKER_00]: And that'll do it for another edition of Optimal Finance Daily.

[00:10:56] [SPEAKER_00]: Thank you so much for subscribing or following the show and sharing with others.

[00:11:00] [SPEAKER_00]: Have a great rest of your day, and I'll see you tomorrow where Optimal Life awaits!