I recently stumbled on the Pew Center’s “Profile of Single Americans” and was surprised to learn that 31% of all U.S. adult women are single. That number jumps to 49% of women over 65 (compared to only 36% of men over 65). It led me to crunch numbers about the persons we serve: 56% of our clients are female, and nearly 1/3 of them are either single now or have been single at some point past age 60.
My focus here is on retirement planning for the Single Woman because when she steps up to the plate looking for advice, she already faces two strikes: her financial plan has to cover more years than a man’s, and she has likely earned less and been able to save less than her male counterparts. Her choices as she approaches and enters into retirement will have a significant impact on her flexibility and enjoyment of her later years.
Hope is Not a Plan
A 2020 study found that 24 percent of married women have not saved for retirement. By comparison, that number more than doubles for single women. The challenge is, a retired person’s money will need to last for 30+ years. So having a sustainable retirement asset base is imperative. While the Department of Labor recommends that retirees prepare to live on 70 to 90 percent of their pre-retirement income to maintain their usual standard of living, we find that many retired persons, with more time on their hands, hope to spend more in retirement.
Healthcare Will Only Get More Expensive
The single woman turning 65 today has almost a 70 percent chance of needing some long-term care services and support in the coming years. Even if she has family or friends who can help, long-term sickness or injury may require care beyond what her family can help with physically and financially. How will she need to be cared for, and who will pay for her care? Assisted living and long-term assistance are costly. As expensive as it is, it may be necessary to consider a long-term care insurance policy to help cover such costs.
Consider Delaying Social Security Benefits
Social Security plays a significant role in retirement plans. Almost 55 percent of the persons receiving inflation-protected Social Security benefits today are women. While the Social Security Administration (SSA) will allow you to begin receiving permanently reduced benefits at age 62, full retirement benefit starts at one’s Full Retirement Age (FRA). If you can defer receiving your benefits past your FRA, your Social Security benefit will increase 8% each year until age 70. Not everyone can or should wait till age 70, or even their FRA. But the 8% built-in annual increase is a meaningful hedge against poor stock market returns and living too long. If you are divorced, you may be able to claim Social Security benefits based on your work record or your “spousal benefit,” which could provide you up to 50% of your ex-spouse’s Social Security benefit. The SSA has provided a helpful list of “5 Things Every Woman Should Know about Social Security.”
Build a Network of Friends and Acquaintances
In addition to developing a sound financial plan, I encourage women to seek out female friends and make it a high priority to enjoy activities with those girlfriends. I am fortunate to enjoy activities with many single and married female friends at this stage in my life. I participate in a weekly Bible study, deep water aqua aerobics, an intensely enjoyable book club, and relish an annual retreat with a group of ladies I have known for over twenty years. Even if you have devoted your life to work or family and haven’t had time to develop close friendships, it’s still worth trying to find shared time with other women.
Ten years ago, I was fortunate that the Women’s Professional Forum (WPF) invited me to join them. This group for professional women hosts a monthly lunch and program. I am happy to say that the most active members in WPF are single women. Within WPF, Special Interest Groups offer a wide range of interests, the Guilford College Bryan Series, the Greensboro Symphony Orchestra, Pops, Chamber Series, cooking classes, fitness possibilities, dining out events, and wine tastings. It’s never been easier to give someone a call and put something on the books.
I believe, and in fact, studies have shown that strong friendships can improve your health and prolong your life. Take the time to check out this article about friendships and happiness in older women in Psychology Today. If you are a professional woman looking for a place to connect, I would be happy to tell you more.
In the words of Zig Ziglar, “Expect the best, prepare for the worst, and capitalize on whatever comes.” Don’t let another day go by without taking steps to create a stronger, healthier, and more meaningful future for yourself. If you have any questions, we would love to talk with you.