When it comes to retirement as a single person, some pros and cons should be carefully considered. The ranks of elderly Americans who embrace a solitary existence have been steadily increasing over recent years, with a noteworthy surge in numbers. CNN has reported that in 2022, an astonishing 16 million individuals aged 65 and above chose to live alone, a significant increase of three times compared to the 1960s. It is expected that this statistic will increase as the baby boomer generation ages.
The increase in elderly people living independently cannot be solely attributed to the rise in divorces. Instead, many different factors have contributed to this trend. Some individuals consciously opt out of matrimony and/or romantic partnerships, preferring the freedom that comes with a singular existence. Others might embark on retirement without a spouse due to the death of their life partners.
While the prospect of being unattached during the golden years brings about certain boons—such as not having to mold your life around another’s preferences or timetable—it is crucial to recognize the potential financial complications that could arise. Here are some challenges that may arise if you decide to retire alone.
First and foremost, it is important to consider the idea of relying solely on one source of Social Security benefits. Married couples can strategically plan how they file for Social Security benefits to maximize their financial income. Regrettably, the solitary retiree is limited to a single set of benefits—their own. Unlike their coupled counterparts, they lack the luxury of opting for an early claim of one set of benefits to bolster their income while postponing the second set in order to savor a more substantial benefit amount. Therefore, planning carefully to maximize your Social Security benefits is essential.
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Retirement income streams
Couples reliant on dual incomes commonly amass multiple Individual Retirement Accounts (IRAs) or 401(k) plans to draw from during retirement. An individual who retires alone must rely solely on their savings. Should inadequate financial provisioning occur, the potential struggle to meet post-retirement expenses looms large—particularly if the monthly Social Security payout is on the modest side.
Moreover, as we age, health challenges become more prevalent. For those fortunate enough to share their life with a partner, the silver lining comes as an on-site caregiver in times of need. This external support is invaluable in the aftermath of an injury or when grappling with the physical trials of illnesses or diminishing mobility. Those living alone, however, may find it harder to obtain such assistance. Moreover, they may incur expenses to obtain this assistance, thus straining their budgets.
When it comes to retirement planning, it’s important to be diligent and forward-thinking. Although it’s possible to find companionship in later years, it’s not wise to rely solely on that idea for preparation. Therefore, it’s necessary to make meticulous preparations.
One potential avenue to explore is opting for a later retirement date. This calculated move could serve a dual purpose: augmenting the nest egg and deferring the onset of Social Security benefits to secure a larger monthly stipend for the entirety of one’s life. Furthermore, contemplating part-time employment in the post-retirement phase could offer a welcome addition to one’s financial inflow. Beyond the fiscal aspect, such endeavors could be a valuable avenue for social interaction—an enticing proposition for the solitary retiree.
In essence, while being single during retirement carries its own unique circumstances, a reasonable approach to planning, coupled with thoughtful financial strategies, can help mitigate the potential challenges and allow for a fulfilling and secure post-career phase.