Single and Worried About Retiring? You’re Not Alone
Written by
Cindy Lamothe
Edited by
Levi Leidy
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If you’re single and stressing about retirement, you’re definitely not the only one lying awake at night doing mental math. In fact, a new survey from Allianz found that Americans are literally more worried about running out of money than death. That’s kind of a big deal to be losing sleep over.
Whether you’re flying solo by choice, circumstance or somewhere in between, figuring out how to retire comfortably on one income can feel daunting. According to Chris Heerlein, CEO of REAP Financial, saving for retirement is more challenging for single individuals because they lack the dual-income advantage that married couples or partners typically have.
“Without this financial support, single individuals need to shoulder all saving and investing responsibilities on their own, which can feel overwhelming, especially when faced with higher living costs.”
The good news? Plenty of people are in the same boat — and there are smart, doable ways to navigate it. Here’s what you need to do to prepare.
Aim To Save at Least 15% of Your Annual Income
Contributing to retirement accounts like 401(k)s and IRAs is crucial, said Heerlein, and if an employer offers a match, taking full advantage of it should be a priority.
Building an emergency fund of three to six months’ worth of living expenses is also essential to avoid dipping into retirement savings during unexpected financial setbacks.
Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at Growth Limit, agreed that single people should make an effort to maximize their personal savings vehicles, like a 401(k) or an IRA.
“The beauty of compounding means even if the amounts are small and consistent, it can grow big over time,” he said.
This is because automating how funds are invested in retirement accounts via payroll deductions can help guarantee a more constant stream of contributions to your future retirement.
Think About Long-Term Healthcare Costs
According to experts, you need to come up with a plan for long-term healthcare costs and consider investing in long-term care insurance.
By staying disciplined with savings and working with a financial planner to develop a strategy, it’s possible for you to overcome challenges and secure a financially stable retirement.
Shirshikov noted that another thing to keep in mind is establishing achievable goals according to your own specific situation. For example, figuring out a reasonable retirement goal should account for your lifestyle aspirations, potential medical expenses and other factors.
Financial planners often recommend that singles should be saving a bare minimum of 15% of their pay or more, depending on their income and goals for retirement.
The Bottom Line
As a single person, you will have to come up with a customized plan for saving for retirement that takes into account your current financial situation and long-term plans.
As Shirshikov wisely noted: “Through discipline, consistency and being strategic, any person, whether they are married or not, can lay a solid financial groundwork for the retirement golden years.”
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