By Eric Reich
Saving for retirement can be challenging for many couples. The risk of a longer life than normal can deplete savings quickly. Couples, however, have a distinct advantage over those who enter retirement single. Couples have two Social Security benefits, possibly two pensions, and as most people know, two people can live almost as cheaply as one. While not everyone believes that, clearly having two people living together doesn’t double your electric bill, cable bill, etc. Couples may also choose to eventually downsize to one vehicle as well.
Single retirees must plan to do more with potentially less. All of these expenses that are typically shared by couples fall completely on the shoulders of those who are single. Utility bills, food, rent, and homeowners’ insurance are all expenses that may be little changed whether you are single or a couple.
Here are some considerations that those who are single should think about before retirement:
- Social Security
Deciding when to take Social Security benefits is very different for those who are single. Singles lack the claiming strategy options that many couples enjoy. If you were previously married for 10-plus years and are 62 years old or older, then you are able to collect up to 50% of your ex-spouse’s benefit or 100% of your own, whichever is higher. Otherwise, you will be reliant on your own benefit only in the future. This would be a reason to delay benefits as long as possible in order to increase your benefit.
- Fixed expenses
As mentioned above, fixed monthly bills (such as utilities, insurance, etc.) can put a higher burden on those who are single. Consider a roommate to help reduce those expenses if possible. Downsizing or a condo might be a good option as well in order to reduce/control those expenses. I am starting to see more retirees relocate to areas outside of the United States. Some friendly countries have great low-cost health care, as well as a much cheaper cost of living.
- Shared travel
Travel is one of the most important activities for retirees. Traveling with a good friend can not only be fun, but it can also help to reduce your overall travel expenses by sharing a room, Vrbo, etc.
- Save!
The best way for anyone to manage expenses in retirement is to save as much as possible prior to retirement. Having as large of a nest egg as possible going into retirement allows you the flexibility to live life on your terms when you retire. It can be even more helpful if you have a history of longevity in your family. Living a long time, while wonderful, isn’t without challenges such as requiring more retirement savings.
Being single in retirement can have many positive benefits. However, being aware of the unique challenges that single retirees face can allow you to be well-prepared for the exciting future ahead.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
Eric is President and founder of Reich Asset Management, LLC. He relies on his 25 years of experience to help clients have an enjoyable retirement. He is a Certified Financial Planner™ and Certified Investment Management AnalystSM (CIMA®) and has earned his Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®) designations.
