Suddenly Singles and Ever Singles face greatest economic challenges in retirement
Baby boomers who retire single, or who become single in retirement, face “a unique set of financial, emotional and planning challenges, according to a new BMO Retirement Institute report.
Americans are living longer, and boomers, as is characteristic of the generation that defines itself by being engaged and active, are redefining the concept of “retirement.” But the economic collapse, rising health costs, and market volatility has shaken financial security and confidence, forcing many to re-think or defer their retirement plans.
In addition to living longer, a large number of boomers are living their retirement years alone due to death or divorce (the Suddenly Singles), or never marrying (the Ever Singles). According to 2011 Census Bureau figures, 43 percent of seniors 65 or older are single. Of these, 27 percent are widowed, 12 percent are separated or divorced, and 4 percent remained single. These retired singles “face an even greater financial burden than married couples,” the BMO report finds.
To the old saw about two people being able to live as cheap as one, Will Rogers is credited with the observation, “Two people can’t live as cheap as two.” But couples, the BMO report observes, “are more likely to have dual incomes and more access to health and pension benefits. They also appear more likely to discuss their retirement plans together and gather the necessary information to create a joint retirement plan.”
Singles are most at risk when it comes to retirement security. The report quotes 2009 American Academy of Actuaries figures that the cost of living for singles is 40 to 50 percent higher than for married individuals. A 2010 Employee Benefit Research (EBRI) study further finds that single boomer men have a 19 to 34 percent higher retirement savings deficit than their married counterparts.
For women boomers, who have probably earned less during their working years than their male counterparts, the prospects are even more dire. The EBRI study found that their retirement savings deficit was at least double the savings deficit of married couples (110 percent to 135 percent).
Suddenly Singles may have an initial income advantage over Ever Singles, the BMO report observes, but this may soon dissipate with the drop in income, while basic expenses, such as rent or mortgage, property taxes, home maintenance and upkeep, telephone and electricity, remain constant. ‘even grocery shopping can be pricier for singles, as meals for one tend to cost more in proportion,” the report states.
Boomers are encouraged to address and plan for six key areas that will minimize the challenges of living single in retirement:
∙Don’t put off retirement planning
∙Build and sustain wealth
∙Get a handle on income and expenses
∙Consider alternative housing
∙Focus on social and emotional well-being
∙Devise a comprehensive health strategy
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.