Retirement as a Single Woman
Ann D. Blakey, CFP®
If you are among the 29 percent of women between ages 50 and 64 who are single, you may be wondering what retirement will look like. Saving and planning for retirement is already a difficult journey for many, and those who rely on a single income can face some unique challenges.
The Gender Pay Gap
Even in 2020, women earned 82 cents for every dollar that a man made, which naturally translates to less income that can be saved after meeting expenses.
Traditionally, preparing for retirement means investing your savings into a 401(k), IRA and other accounts. But for single women, it’s especially important to first negotiate your best salary and benefits. Retirement contributions are often based on salary. Moreover, you will need to plan for a potential health event, disability, or premature death by securing your best possible employer-provided insurance package.
Women often take time off to care for family members, which can have a permanent negative effect on your own employment and savings goals. Be realistic when offering care for loved ones—will it affect your ability to save for the future? It might be a smarter financial decision to arrange long-term care for elderly relatives or ask other family members to chip in with caring for those who need it.
Prepare for a Long Life
According to the Centers for Disease Control and Prevention (CDC), women live five years longer than men, on average. As a single woman, it’s important to keep in mind that you are more likely to live longer in retirement than your male counterparts. This means enjoying more years of retirement, but also living off of a fixed income for those extra years.
Be prepared to live a long life by setting realistic expectations for your savings goals and budget in retirement. Plan out your estimated expenses including housing, healthcare, groceries, utilities, and other bills, and use these to set savings goals. When setting your goals, keep in mind that you’ll only have one Social Security payment, so you may have to supplement your income with more savings than the average retiree.
Set Yourself Up for Success
Once you have a savings plan and goals in place for your retirement, make sure you also have a plan for who will handle your financial and health-related decisions in the future. This could include a relative, close friend, or someone else you trust.
Remember, it’s never too late to start planning for your retirement. Talking to a financial professional can help you figure out the best path forward to be happy and comfortable later in life. We invite you to schedule an initial consultation today or call 703.584.2700.
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