How to Save for Retirement on a Single Income

Whether by choice or circumstance, many American households today are making ends meet on a single income. Once-married parents separate, breaking up a finances that were previously. A single parents might have never had a dual income and find themselves handing all the costs of a household, single-handed. Some individuals may find themselves widowed or living with a disabled partner. In other cases, couples make a conscious choice to have one working member of the household, perhaps to rear children or because of lifestyle preferences.

While every circumstance is different, the need to save (and save enough) for retirement does not change. In fact, a third of middle-class Americans today believe they will need to continue working into their 80s in order to achieve their level of comfort in retirement, found a survey conducted by Wells Fargo.

Today most Americans depend on a combination of government programs, employer programs and their own intuition to save the necessary funds to retire comfortably, and those looking to save on a single income might need to get even more creative. Here’s a look at five ways how you can best save for retirement on a single income.

Read: 10 Ways to Take Charge of Your Financial Future in Your 30s and 40s

1. Calculate Your Retirement Income Needs

The first step to determining how to save for retirement is to figure out how much money you need for retirement. Figuring out this number can be intimidating, but online calculators can help. These tools, such as those offered by AARP, CNN Money and Bloomberg Business, can take many variables into consideration including your age, current and potential income level, desired lifestyle at retirement, as well as the rate of inflation in the years to come. Using these tools will allow you to better gauge how much you need to save for retirement.

You can then take that figure and break down it down into what you will need to save year-by-year to make achieving your goals easier (some calculators can help with this step as well). This will give you a starting point to figure out how to fit retirement savings into your everyday budget. Don’t be surprised if that amount is a large portion of your earnings — retirement saving on a single income will require a higher savings rate, especially if the one income has to cover retirement costs for a couple.

2. Live Below Your Means

Once you have a rough figure of how much money you will need to retire, consider ways to cut your cost of living now. Every little bit can help. Try to live off less than you earn, instead of spending every dollar. While the expense that can be cut might vary from person to person, options include using coupons to shop for groceries, eliminating cable TV bills, changing utility providers to incur lower monthly fees and buying secondhand clothing. Any action you take to reduce today’s costs of living will free up additional capital to put toward your retirement savings. When it comes to retirement saving (as you probably noticed with the calculators), time is your best friend. The more years you live below your means and save, the more time your retirement nest egg will have to grow.

3. Open and Fund Retirement Accounts for Each Partner

While some retirement plans are only available through an employer, such as a 401(k) or pension, there are many other options available to working and non-working individuals alike. Single individuals should contribute to a retirement plan through their employer, such as a 401(k), and also open and contribute to an IRA on their own if they want to put away savings past the 401(k) contribution limits

For couples that have only one earner, this can be tricky as many retirement savings products like IRAs require that the account holder have an earned income. For couples that file jointly, however, the non-earning partner can open a personal, spousal IRA that can be funded with whatever money is available within a household. Talk to a qualified financial advisor about additional options that may be available to you and your spouse.

4. Delay or Stagger Social Security Distributions

Many individuals might have once had a full-time income and contributed to Social Security, even if they are currently not earning incomes. If you’re in that boat, you might be eligible to receive benefits upon reaching retirement age even if you were not working every year of your adult life. It requires at least 10 years of earning an income to earn the minimum 40 credits required to qualify for Social Security benefits, but the good news is any annual income of $1,220 or more will earn you credits towards Social Security requirements.

Social Security benefits can be claimed as early as age 62, but waiting to retire will help them avoid a penalty against Social Security earnings up to full retirement age at 66, and earn them a bonus to Social Security income up to age 70. Single earners can consult with a financial planner to determine the best time to begin accepting Social Security retirement benefits, since delaying could give them a big advantage. Likewise, couples might be able to delay claims, stagger their claims or otherwise arrange their Social Security benefits to maximize their incomes with the help of a financial planner.

5. “Insure” a Stable Retirement

When it comes to retirement planning, the idea of stowing away money is often foremost. However, there are also some insurance considerations to keep in mind that can help make sure your retirement happens and that both partners in a household are financially secure.

For instance, income earners can apply for disability insurance. This will provide an income to the household should the sole working adult become injured or incapacitated.

Similarly, life insurance can be purchased for both earning and non-earning adults. Life insurance will provide financial security upon the death of either adult in the household.

Lastly, long-term care insurance is another consideration for older adults as they near retirement. This insurance can help cover a stay in a nursing home, and will allow you to avoid tapping into your precious retirement savings to pay for special care.