Retirement planning for singles: Three must-do items

If retirement planning had a soundtrack, a great candidate would be “Love and Marriage,” the old Sammy Kahn lyric made famous by Frank Sinatra:

Love and marriage, love and marriage . . go together like a horse and carriage . . .

So much planning advice focuses on married couples–and no doubt, that’s where some of the most valuable retirement benefits can be found. Think Social Security spousal benefits, joint and survivor pensions, or beneficiary rights for 401(k) and IRA accounts.

But how about retired singles? Their numbers will be increasing in the years ahead–about one third of adults ages 46 through 64 were divorced, separated, or had never been married in 2010, compared with 13% in 1970, according to demographers at Bowling Green State University.

And they will face tougher challenges achieving a secure retirement than married people. Living expenses are higher as a proportion of income–the cost of shared housing, food, utilities, and transportation are easy to manage when spread over two income streams. Single people also can’t take advantage of the tax breaks available to joint-filing married couples. All of that puts a drag on their ability to save for retirement.

“There certainly are economies of scale for married people,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies. “I know that as a single person myself–it’s difficult to cook for one without having ingredients that have to get tossed out.”

Single women have an especially steep hill to climb. They tend to outlive men, which means they need to stretch retirement savings further. Yet they earn less than men; the median pay for a woman in 2013 was $39,157, just 78% of the median $50,033 earned by men, according to U.S. Census Bureau data. That gap translates into lower retirement saving rates and lower credits for Social Security and pension benefits.

“Women do earn less than men, and that means they need to plan more aggressively for retirement,” says Manisha Thakor, CEO of MoneyZen Wealth, an independent RIA firm specializing in planning for women.

Collinson’s organization has studied the retirement gender and marriage gaps, and the numbers aren’t encouraging. Consider the following responses by workers over age 50 to a recent Transamerica survey:

— Fifty-two percent of single women expect Social Security to be their primary income source in retirement, compared with 38% of single men–and just 33% of married couples.Forty-eight percent of single women expect their standard of living to decline in retirement, compared with 39% of men and 37% of married women.

— Fifty-six percent of single women expect to work past age 70 or to never retire, compared with 51% of single men. The numbers are far lower for married people–39% of women and 46% among men.

— Single women have median retirement savings of just $35,000, compared with $70,000 for single men and $153,000 for married women.

How can single people flip these figures? One obvious piece of advice: Save as early, and as much, as you can for retirement. But experts also offer the following suggestions.

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