According to The Wall Street Journal, 35% of 50-54 year olds were single in 2011, compared with 29% in 2000. With more baby boomers entering their golden years on their own, retirement planning becomes even more important and challenging. Living costs for singles in retirement will be 40-50% higher than costs for couples. With most couples having two incomes, amassing more wealth and savings is easier than it is for singles – who have to bear the burden alone. That is why, according to the Census Bureau wealth study, the median net worth for married couples is about four times higher than that of singles. With no economic resources from a partner to fall back on, health problems and job loss packs a more powerful punch for single people.
If you find yourself in the single category and love your independence too much to give it up, here are some tips to get you in shape for retirement:
Saving Tips for Singles
- Make sure you are living within your means and saving for your future. Minimize your debt as much as you possibly can, and maintain a low debt ratio. Most people save 10% of their income, but it is recommended to save 15% if you are single. This will provide a better nest egg and cushion if you need it later in life.
- Don’t delay. The sooner you start saving, the more you can accumulate thanks to compound interest. Remember the rule of 72 to help you figure out how many years it will take to double your money at any given interest rate (interest rate/72 = # of years to double money). Talk to a financial advisor regarding the best savings options for you. Keeping all of your money in a low interest savings account won’t do you much good.
- Opt for disability and long-term-care insurance coverage. The statistics show that unmarried adults are more likely to develop a major medical condition or become severely disabled as they approach retirement. A good insurance policy can help you hang on to your savings if something unexpected should happen.
- Focus on good benefits for more financial security. A job with a 401k match is similar to being handed free money. Use it to the fullest extent possible and resist the temptation to cash out.
Don’t let these statistics or the stigma of being single get you down. Instead, use them as a wake-up call to secure your future. And just think – at least you don’t have to argue with anyone about their bad investments or how much you should be saving.
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