These disadvantages are proving costly for what’s now a fast-growing demographic. Singles in their late 60s are twice as likely as their married peers to run out of savings in retirement, according to a report from the National Bureau of Economic Research.2 According to the Pew Research Center, the percentage of Americans age 25 to 54 who are “unpartnered”—neither married nor living with a partner—has climbed from 29% in 1990 to 38% today.3 And, of course, people who are married now could still find themselves single come retirement: According to the Census Bureau, 40% of women and 20% of men in the 65- to-74 age bracket are currently widowed or divorced.4
Single women probably have the steepest retirement hill to climb. Women live longer than men, which means their nest eggs must last longer. They earn less than men, which means they need to save more of their paycheck. Single women also earn less than their married-women peers: According to a 2013 study by Harvard University researchers Alexandra Killewald and Margaret Gough, married and partnered women outearn single women by 4%.5
The disadvantages facing solo savers are not going away, but there are ways to plan around them. Here are four steps that singles can take right now to safeguard their retirements.
1. Find people you trust to serve as advisors and proxies. Melody Evans, a TIAA Wealth Management Advisor in Andover, Mass., said her conversations with single clients tend to be more frank and more frequent than those with married clients because that’s what singles need.
“Think about how couples tend to make decisions,” Evans said. “They trust each other, they have shared goals, they’re comfortable making decisions together around planning and saving for the future. Singles don’t always have that.” Maybe singles will talk to a friend about an investment idea, or maybe they’ll confide to a family member about a particularly tricky financial situation. But most people avoid talking money with anyone outside their immediate household. As a result, singles may not have anyone who understands their complete financial picture. “Singles don’t have a sounding board,” said Evans. “I don’t think we talk about that enough in planning. I think it’s a really critical difference when you’re planning for single folks instead of married folks.”
The challenge goes beyond determining the proper financial strategy. When a married person experiences a health crisis, they often have a spouse or adult child they can rely on to manage their financial affairs or serve as a health care proxy. “Incapacity planning for singles is much more difficult,” said Evans. “They don’t have a spouse who can step right in.”
Evans’s advice: Talk to friends and family, and see if someone you trust would be willing to serve as your healthcare proxy or financial power of attorney. If that doesn’t work out, talk to your TIAA wealth advisor about other options. TIAA can connect you with estate attorneys who could potentially fill those roles.
2. Know your options when it comes to claiming Social Security. Singles may have less retirement savings, but delaying when you claim Social Security can help stretch those savings. The calculators on the Social Security Administration website provide precise and personalized estimates. But generally speaking, claiming Social Security at age 70 instead of 67 will boost your monthly check by 25 to 30 percent.6
There are other considerations as well. As we said, married folks enjoy a Baskin-Robbins–like array of options when it comes to claiming Social Security, whereas singles are basically relegated to chocolate, vanilla or strawberry. But there are a few hidden menu items, particularly for singles who are divorced or widowed.
Say you’re divorced. If your former spouse earned more than you, you may be able to claim Social Security based on your ex’s work record instead of your own, which could mean a bigger check for you. (Doing so won’t lower your ex’s benefits—fortunately or unfortunately.) To claim Social Security as an ex-spouse, you must not be remarried, you must be divorced for at least two years, you must have been married for at least 10, and both you and your ex must be at least 62 years old.7
Widows or widowers have the option of claiming a late spouse’s payments as a survivor’s benefit. That’s attractive if the survivor benefit is greater than the monthly benefit based on your own work record. Also, whichever choice you make doesn’t have to be permanent. Consider a 60-year-old woman who is widowed at a time when her husband was 62 and already collecting Social Security benefits. She can delay claiming her own benefit, elect to receive survivor benefits for 10 years, and then switch to her own Social Security at 70 when her own benefit is highest.
3. Explore long-term care insurance. Most long-term care in the U.S. takes place at home, and most of the care is provided by spouses, daughters, and daughters-in-law. As a trio of Stanford University researchers wrote in 2017, “the best long-term care insurance in our country is a conscientious daughter.”8
Question is, what happens if you do not have a spouse or a conscientious daughter to care for you if you become frail, disabled, or mentally diminished? According to Melissa Shaw, a TIAA Wealth Management Advisor in Palo Alto, Calif., this is real concern for singles, especially those who don’t have adult children. “There’s no backup plan for them should they find themselves in this position,” said Shaw. “It’s why long-term care insurance is something singles may want to look into.”
There are two different types of long-term care insurance, traditional and hybrid. Both can be used to pay for in-home care or for care at nursing homes, assisted-living facilities or memory-care units. The knock against traditional policies has always been the use-it-or-lose-it element. “If you never end up needing long-term care, it can feel like you wasted money on all those premiums,” said Shaw.
Hybrid policies solve this problem by combining long-term care insurance with life insurance; the death benefit on the life insurance is reduced by the amount of long-term care benefits already paid. “It’s an attractive product,” Shaw added, “because it allows you to pass along those premiums not used for long-term care as a tax-free inheritance to your beneficiaries.”
Shaw points out that many long-term care insurance policies, including those sold through TIAA, include a perk valuable to singles: concierge services. If there’s no family member around to arrange care, trained professionals can help locate providers and arrange care on your behalf. Talk to your TIAA wealth advisor to learn more.
