Retirement For One

By now you have heard—probably not for the first time—about the staggering percentage of adults age 50 and older who haven’t saved enough (or anything at all) for retirement. For most of those non-savers, that means that they’ll be working well past 65, just to make ends meet.

If you’re part of a couple, you at least have the possibility of two people bringing in two paychecks. Even if the total income is modest, it’s at least a way to share the financial burden.

But what about singletons?

For anyone facing life after 50 on their own, whether through divorce, widowhood or no marriage at all, there’s no sharing of the financial burden with a partner. And in fact that burden can be disproportionately harsh because singletons don’t have the same tax advantages as married couples, nor do they have the luxury of the health benefits and insurance policies their spouses may provide.

I’ve been thinking about this situation since reading a terrific article in the Wall Street Journal this past weekend about retirement planning for singles. Two might be able to live as cheaply as one, but as writer Jane Hodges points out, living alone doesn’t mean having half the costs of a couple, especially when it comes to housing.

What’s particularly alarming, Hodges wrote, is that 35% of single men and 49% of single women will enter retirement financially unprepared. For women, it’s particularly problematic because they typically earn less than men.

Divorcees have to be especially careful about relying on assets like alimony and life-insurance policies, both of which can get cut off abruptly. Alimony designed to cover a former spouse for life, Hodges wrote, may dry up after the death of the former spouse who was paying. And singles who don’t become “owners” on a shared insurance policy may find themselves without benefits if an ex takes them off the beneficiary list.

What’s the takeaway from all of this?

If you’re in a couple, plan for contingencies for the surviving spouse. If you’re in considering divorce, make sure you factor in retirement savings when crafting a financial settlement. And if you’re a singleton, get aggressive about saving if you aren’t already, and be crafty about income streams in retirement.

Here’s the link to the full Wall Street Journal article.