Single retirees don’t have it easy. The cost of living for single retirees is 40 percent to 50 percent higher than that of retired married couples, according to a recent report by the BMO Retirement Institute. And almost half (43 percent) of Americans who are 65 years or older fall into that single category, according to a 2011 Census Bureau report.
Several reasons explain the high number of single retirees. According to the Vanier Institute of the Family, 44 percent of marriages in the United States will end in divorce before the couple’s 30th anniversary. There are also a lot of women simply outliving their husbands. Roughly 39 percent of women 65 years and older are widowed. A number of people are also choosing not to marry. Unmarried young adults ages 25 to 34 outnumbered their married counterparts by approximately two percent.
With a substantially higher cost of living, single retirees have to be more mindful of their finances. “It’s extremely more expensive living as a single person than as a couple,” says Tina Di Vito, head of the BMO Retirement Institute.
Couples can share living expenses and use their joint savings to pay for retirement, whereas single retirees are on their own. To help alleviate extra costs, single retirees should set a spending budget and stick to it.
“When single retirees are entering retirement, they can only rely on themselves for the financial perspective—one pension, one Social Security, one savings account—so that person needs to make sure they have a spending budget and know where their money is going,” says Di Vito.
Another recommendation is that single seniors consider shared housing arrangements for the sake of cost-sharing and for additional support around the house with things like chores. According to a 2010 Census Bureau report, 557,000 seniors age 65 and older are involved in some kind of shared housing arrangement. You’ll be taking a lesson from “The Golden Girls,” a TV sitcom in which Bea Arthur’s character and three older women shared a home in Miami. The women had camaraderie, led full lives and helped each other during difficult times.
Single women in particular need to plan more for retirement, as women generally have longer life spans than men. However, many women earn less during their working years and accumulate a smaller nest egg. Because of this, they will need to really consider how much they are putting away for retirement. Women may need to save for a longer period of time to accumulate more capital.
Do your retirement plans include a roommate or a strict budget?