Single at 65: Making Independent Plans for Retirement


An old woman having a laugh As a single woman in your mid-60s—whether you are a lifelong single, a widow, or a divorcee—you’ve got exciting opportunities ahead as well as important decisions to make. Sixty-five is often considered the de facto retirement age, but that’s largely a misconception. According to the Social Security Administration, the average retired benefits recipient was 73.7 in 2010.1 And that may increase: A 2011 survey found that 46% of people age 50+ are delaying retirement because of concerns over finances and health care costs.2

Article Highlights

  • Financial and other burdens may fall especially hard on women living alone as they approach retirement.
  • Having a good sense of your goals will help you develop a plan to help meet them.
  • To get on the right track, have a good overview of your assets and how they’re allocated, what you want to leave as a legacy, and how you will generate income in retirement.

Financial and other burdens may fall especially hard on women living alone. It may feel like everything falls on your shoulders: all the little things, from getting on a ladder to changing a light bulb to being at home to meet the cable repairman, and all the big things, like buying a new car or paying the mortgage. You also need to think differently about your long-term plans than someone in a relationship would. Besides saving for retirement to guarantee an acceptable standard of living, you must also plan for retirement expenses that someone in a multi-person household may not face since other members of the household can pitch in and help (such as hiring a handyman for chores or a home health aide in the event of an illness).

In other words, living alone as you approach retirement is hard work. Solid planning and good financial advice are important factors in transitioning smoothly into this next phase of life. There is no one-size-fits-all approach to retirement, so it’s important to make smart moves now to help make your next act be all it can be.

Figure out what’s next. Before you can make savvy financial decisions, you have to have a clear vision of your goals for the coming years. Perhaps you love your career and want to stay in your job as long as possible. Kudos to you! However, you may also be ready to take the leap and start a new business. If you are recently divorced or widowed, you might be starting a new career out of financial necessity. If your priorities include leaving assets to people or causes, it’s time to start making a plan to do so. Think about what you want to accomplish in your retirement years as specifically as possible. It’s a good idea to write down these goals so you can refer to or adapt them as necessary. Additionally, studies have shown that you are more likely to accomplish your goals if you write them down.

Conduct an asset inventory. Over the years, you may have invested in a variety of assets including real estate, retirement accounts, mutual funds, whole life insurance policies, equities, bonds, or other vehicles. Do you know what they’re worth and the impact they will have on your retirement income? If not, it’s time to conduct an asset inventory. Gather statements for each investment. Since real estate values may have changed greatly over the past few years, a real estate agent can help you determine current market value. For a more formal and accurate valuation, hire a real estate appraiser, who will do a thorough analysis for a few hundred dollars.

Review asset allocation. Once you have a good idea of the value of your assets, it’s time to determine whether they need to be reallocated based on your risk tolerance. Generally, the closer you are to retirement, the less risk you should be taking with the money you’ll need to support yourself. Depending on your situation, you may want to move some assets from growth-focused vehicles, which may have higher returns but leave you open to greater volatility, to more conservative vehicles.

Learn about your investments. Only 37% of women felt comfortable making their own investment choices, while 62% of men were confident taking the lead on their own investments.3 Take advantage of the many free resources available to begin teaching yourself what you need to know about making your money work for you. Websites like TIAA-CREF’s Advice & Guidance Center, Morningstar and The Motley Fool are good places to start.

Consider lifetime income options. An annuity can be an effective option to guarantee lifetime income. Annuities are typically structured as a contract with a single premium paid upfront which then disperses payments at specified intervals for the rest of your life. Annuities diversify your assets and ensure that you always have income.4

Create an income plan. How much money will you need to meet your expenses in retirement? When should you apply to receive Social Security benefits? If you work part-time or start a new business in retirement, how will those earnings affect your Social Security eligibility? As you get closer to retirement, the questions and answers are more complex. You may wish to draw only the interest you’re earning on your investment, but leave the principal balance in the account. However, in many cases, the minimum distribution requirement of retirement funds doesn’t allow you to do so. Creating an income plan that maximizes your benefits and tax advantages is an important step on the road to retirement. Learn more about making the most of your income sources in retirement here (PDF).

Get professional advice. It can be tempting to simply follow the lead of a friend or colleague who seems to have a handle on her retirement planning. However, there is no substitute for advice from a reputable financial advisor. These professionals can help you understand and navigate the many decisions you’ll need to make in retirement. The biggest challenge is just setting the first appointment. Fear, uncertainty, embarrassment and other complicated emotions can make it difficult to reach out for help. Remember that financial advisors are there to help you, whatever your situation may be.

Plan your legacy. The assets you’ve accumulated over a lifetime can leave a lasting impact if you plan for them to do so. It’s time to think about your legacy and create an estate plan. Ensure that your will is complete and states how you wish your assets to be distributed. For lifetime asset transfers to loved ones or charitable organizations, planning well leaves you options that can provide tax advantages, such as establishing a trust or making incremental transfers over a number of years to take advantage of gift tax exemptions. If you plan to support a cause or charity—women tend to do so at higher rates than men at this stage of life5—meet with the leader or the appropriate development staff members to plan your gift.

Expect the unexpected. One of the biggest challenges a single woman faces is incapacitation. In addition to ensuring that your personal legal documents, including a will, power of attorney, health care directive, and asset protection vehicles such as trusts, are in place, work with your financial advisor to plan for setbacks such as a short-term illness or disability or the need for long-term care. Disability and long-term care insurance can be useful tools to help you remain independent, even in the face of obstacles. Learn more about incapacity planning here.

These are not your grandmother’s 60-something years. At 65, you’re vibrant, energetic, and facing more opportunities than ever before—so much so that the Massachusetts Institute of Technology calls this stage of life your “longevity bonus.”6 It’s never too late to learn about investing and asset protection. Work with an experienced financial advisor to figure out your current financial situation, assess your needs, and plan your next steps.

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