I was recently reviewing retirement plans for two long-term clients with remarkably similar situations. Both had saved a little more than $3 million and paid off their homes. Both delayed Social Security until 70. They had a lot going for them. But their retirement strategies looked completely different. Why? One client was married, the other was single.
That realization hit me hard. So much retirement content out there—ours included—focuses on married couples, joint life expectancies, and strategies built for two. But millions of retirees aren’t married. They’re divorced, widowed, or maybe they were never married in the first place. When it comes to retirement planning for singles, the strategy looks completely different than planning for married couples.
Let’s talk about what changes when you are single and planning for retirement.
Retirement Planning for One
Obviously, when retiring alone, you’re only planning for one life expectancy. According to IRS life expectancy tables, if you’ve reached age 60, your remaining life expectancy as a male is about 20 years. As a female, it’s about 23 years and some change.
For married couples, this can be complex, especially if one spouse is healthy with great genes and longevity on their side, while the other faces more uncertainty. You need to figure out different strategies, such as Social Security benefits and survivor benefit planning. The reality of retiring alone means you have complete control over your retirement vision and spending, which makes this equation simpler to address.
How Much Money Does a Single Person Need to Retire?
If longevity is stacked in your favor, it’s probably beneficial to delay your Social Security benefit until 70. Married couples have the option of delaying the larger of the two benefits while starting the smaller benefit earlier. When you’re single, you don’t have to compromise on your retirement lifestyle choices, but you must have adequate savings during that bridge period—the time from your retirement start date until you begin taking Social Security.
If you retire at 60, that bridge period could potentially be 10 years. A lot can happen in 10 years to your health, the markets, and ultimately your portfolio. How much money a single person needs to retire depends heavily on their Social Security claiming strategy. While retirement planning for singles simplifies life expectancy to some extent, it makes the Social Security timing decision extremely important. If you run into a bear market during that bridge period, it can be quite damaging, so you must have a bear market withdrawal strategy to hedge against that risk.
Tax Planning Becomes More Complex
This is a big one. Tax brackets work differently in retirement for singles compared to married couples filing jointly. Singles cannot spread their taxable income across a joint return. Couples can—their brackets are basically doubled throughout all tax brackets until you hit that 37% top bracket.
Roth Conversion Opportunities
The Roth conversion window becomes smaller when you’re single. If you’re trying to fill up the 22% bracket, you have a lot less room to do so than if you were filing a joint return. You also need to be careful about IRMAA thresholds if you’re on Medicare. These surcharges are hidden taxes on your Medicare Part B and Part D. If you’re doing Roth conversions, not only do you have less room in the income tax brackets, but you also have less room for error with those IRMAA thresholds.
The RMD Tax Trap
Once required minimum distributions kick in, they dramatically impact the single tax filer more than the joint filer. Let’s use that example I mentioned earlier: Client A, a joint filer with $3 million saved, versus Client B, a single filer also with $3 million saved. When those required minimum distributions kick in, they’re going to have a much bigger tax impact on the single filer.
Projecting out your lifetime tax bracket over time becomes critical because the tax trap of those required minimum distributions is more severe for single filers than married filers.
Investment Strategy
Here’s something I don’t see talked about enough: the investment strategy changes substantially when retirement planning for singles versus joint retirees. I have several couples I work with where one spouse has an aggressive risk tolerance, and the other has a very conservative risk tolerance. They sort of balance each other out. One advantage from an investment perspective for singles is the simplified decision-making process.
On the surface, that can mean a more straightforward investment strategy in retirement. But I’ve noticed something interesting: during downturns, I hear from some of those single clients a little more. Maybe that’s just my imagination, but I think behavioral finance becomes much more important.
I was referred to a client about three years ago. She had been widowed for eight years and had been working with Fidelity. She told me when I first met with her that she was checking her accounts every single day. Yes, every single day. It was giving her extreme anxiety, especially when markets were volatile back in 2022. She didn’t have that trusted partner to ride those ups and downs with. She was kind of panicking alone, and sometimes that can lead to bad investment decisions when you’re reacting emotionally to market volatility, especially when you’re retired. What you have is what you have; you’re not adding more to the portfolio.
I’m happy to report that I met with her a couple of months ago and she shared that she literally never checks her accounts anymore. That didn’t happen overnight. Early on when we were working together, she was still in that habit. But after thoughtful planning and strategic implementation, she gradually became more comfortable with the strategy and began worrying less about her portfolio each day. The investment strategy and planning around it become simpler because we aren’t battling different personalities, but the management can become more challenging when you’re in your own head with nobody to bounce ideas off of.
Housing Decisions: A Critical Component
On the surface, a single person may not need as much space. You could probably get away with a smaller single-family home or maybe even a condo. But the more challenging issue is aging in place. Should you move near family? Should you move near better healthcare? Statistics show that retirement planning for single women often accounts for longer life expectancies, making these decisions even more critical.
One solution that has been rapidly gaining popularity among retirees—and definitely within my client base—is moving into a CCRC, a continuing care retirement community. Think of a CCRC as buying into a retirement ecosystem instead of just buying a home. They typically have multiple stages of living:
- Independent living
- Assisted living
- Skilled nursing
- Memory care.
One of my clients who lives in Florida is in a very nice one in the Jacksonville area and absolutely loves it. All of her friends are there, her activities are there, her dining is there, her workout facilities are there, and even transportation to certain events is there. It’s basically maintenance-free living. After losing her husband more than a decade ago, she’s dating her neighbor two doors down. It’s hilarious and cute at the same time.
While there are many perks, the cost can be extremely high. Entrance fees can sometimes be $200,000, $500,000, or even a million dollars or more if they’re really upscale. Then you have monthly fees on top of that. Granted, a lot of your lifestyle will be covered by those monthly fees, but the upfront cost is massive. And unfortunately, your beneficiaries won’t receive that asset when you pass away like they would if you were to pass on a single-family home or a condo.
Given their popularity, waiting lists can be long—sometimes five years or even 10 years. You need to decide on the right facility, get on the waitlist, and then make that financial commitment later.
Long-term Care Planning
Long-term care is a critical component for anyone’s retirement, but for singles it does create some complexity. For starters, there is no spouse around to help with caregiving or coordinating caregiving as they age. 70% of caregiving today is provided by unpaid caregivers, most of whom are spouses. For singles:
- Who will be the caregiver?
- Who will be the caregiving coordinator?
- Where would the funds come from to pay for that care?
- Who is managing the financial affairs during all of this?
One thing I hear time and time again from the folks I work with is that they do not want to be a burden on their family members. They don’t want to be a burden on their children or siblings. Maybe you don’t have that trusted family member who lives near you. These long-term care planning decisions can be a bit more complicated, so make sure to speak with your advisor about your options and whether or not looking into Long-term Care Insurance might be a viable solution.
Estate Planning
Singles face some built-in challenges in their estate planning. There’s no automatic spousal direction where your spouse steps in to be your executor or manages the finances if you are unable to.
The question that a lot of single retirees I work with have difficulty answering is: Who will be that individual to step in on your behalf to make those financial decisions if you’re unable to? And furthermore, how familiar are those individuals with your plan?
If it’s a sibling or even an adult child, they may know they’re in charge of making those decisions, but they may not know your financial situation. They may not know your balance sheet. I work with an older client in her 80s who lost her husband about six years ago. She has tapped her two adult children into the planning process, and I work with them as much as I do with her directly. This is how it should be done!
She wasn’t what I would call the CFO of the household. Her husband made a lot of those decisions on their behalf. She’s very fortunate to have her two daughters, who are both local, responsible, and involved in the process. Otherwise, this would be crippling for her. She would be so afraid of making the wrong decision. But some of you may not have that situation. Perhaps you don’t have children, or perhaps they’re not in a position to help due to proximity or fiscal responsibility.
Interestingly, this is a big reason single retirees and pre-retirees hire our firm. Having that trusted third party who knows your plan and can help your trusted contacts follow through on your wishes provides significant peace of mind.
Lifestyle and Spending Patterns
There’s no research or data backing this—just my observation working with retirees over the last 18 years. Lifestyle changes are a bit more subtle for a single retiree than for a married couple. With married couples, I often see that as they age, travel slows down and going out to eat becomes less frequent. Life just becomes a little quieter.
But for a lot of the singles I work with, their spending is their community. It’s the golf league, the church trips, the travel groups, dinners out with friends. Those spending stages I often talk about—the go-go years, slow-go years, and no-go years—can be more subtle for single retirees versus married couples.
I’m sure many of you who are married and reading this are thinking, “We’re doing all those things too.” There’s no hard-and-fast rule on this one. But when you’re planning as a single, the lifestyle you want to build often becomes a core part of your social interactions. Keeping those in place as long as possible is important for your mental health.
The Good News About Retirement Planning for Singles
After reading this, you might think retirement seems more complicated if you’re single. I don’t actually think that’s true. There’s a simpler planning process in many ways.
- One vision
- One spending style
- One retirement start date
- One risk tolerance
- One Social Security decision
Effective retirement planning for singles requires addressing unique challenges that married couples don’t face, but it also offers unique advantages.
At the end of the day, being single doesn’t mean retirement is better or worse. The strategy and the playbook simply change. Tax planning will be different. Your Social Security strategy will be different. Your housing decisions change. Long-term care planning becomes critical. Estate planning becomes more complicated. But with good, thoughtful planning, there’s no reason a single retiree cannot enjoy an incredible retirement.
In fact, some of the happiest retirees I’ve worked with are single because they’ve built retirement around the life they want, not the life someone else expected them to have. Many people worry about retiring alone, but with proper planning, it can lead to an incredibly fulfilling retirement.
Take Action Now
If this article made you pause and think about areas you haven’t thought through yet, I encourage you to start those conversations now. Whether it’s with your family members, an estate planning attorney, or a trusted financial planner, don’t wait until a health event or life change forces you into those conversations. Have them proactively, not reactively.
If you are approaching or already in retirement and don’t have a trusted partner, consider working with a financial planner who understands the unique challenges and opportunities of retirement planning for singles.
At Imagine Financial Security, we help individuals over 50 with at least $1 million saved navigate these complex retirement decisions. If you are looking to
- Maximize your retirement spending
- Minimize your lifetime tax bill
- Worry less about money
You can start by taking our Retirement Readiness Questionnaire on our website at www.imaginefinancialsecurity.com, so we can learn more about how we can help you on your journey to and through retirement.
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This is for general education purposes only and should not be considered as tax, legal, or investment advice.
