Planning for retirement can be challenging for anyone. but planning for retirement alone can be especially daunting. Unfortunately, many people find themselves in that situation.
Consider this: Baby boomers are retiring in record numbers in the United States. The National Census population projections estimate by 2030 all boomers will be older than age 65 and that one in every five residents will be retirement age. Also consider that divorce rates have doubled since 1990 for those age 50 and above.
Older people will outnumber children, according to the U.S. Census Bureau: "By 2035, there will be 78.0 million people 65 years and older compared to 76.7 million (previously 76.4 million) under the age of 18."
The likelihood of being alone in retirement increases with age
Both men and women may find themselves alone in retirement. But women are more vulnerable to being alone and retired because they tend to live longer than men. A 2016 report from the Centers for Disease Control found that women can expect to live five years longer than men-81.1 years vs. 76.1 years.
And when you look at who is single or alone, according to the U.S. Census Bureau, "more than twice as many women 85 and older were widowed (72 percent) compared to men of the same age (35 percent)." This is an eye-opener, and living longer and being alone has various implications.
Are single people financially prepared for retirement?
Saving for retirement is essential, yet a study released by the Economic Policy Institute on Retirement indicated that single people are the least prepared financially for retirement. Research shows that 43 percent of single men and 42 percent of single women have retirement account savings, compared with 65 percent of married couples. Single men hold an average balance of $34,000, while single women hold an average balance of $30,000. A typical married couple holds an average balance of $78,000.
Where you choose to live matters in retirement
One of the most important considerations in retirement is where you live. According to a study on retirement by the health service company Cigna, retirement can cause social isolation, particularly for people who are alone or single. That's why where you choose to live in retirement matters. For example, some gated communities and small apartment complexes promote social events and companionship.
Working part-time in retirement has both financial and social benefits
Working in retirement is common. Many babies will continue working well into retirement. Some will work because they want to, while others will work because they have to. What's interesting is that many older workers move into a new job before retiring, according to a study released by the Urban Institute on Health in Retirement. And for single people, work offers much-needed social integration with other like-minded people. It can fill the loneliness gap or isolation many people feel in retirement.
Financial advice and a retirement plan can increase your peace of mind
No one can see into the future but you don't need to leave your retirement up to chance especially if you plan to enter retirement alone. The best thing to do is build a relationship with a trusted financial advisor. An advisor can help map out your future by creating a retirement plan based on your individual needs. He or she also can help you adjust your budget or spending to help increase retirement affordability down the road.
Retirement preparedness is something you can influence and control whether you are single today or become single in retirement.