Retirement planning for singles can be extra tough

The number of married Americans has been declining steadily in recent decades — a trend that’s been described as one of the largest unnamed societal shifts of the last 60 years. While the driving forces behind this trend are complex, one thing’s for sure: It matters for your retirement.

"The United States is in the midst of a retirement crisis," says Helaine Olen, personal finance expert and co-author of The Index Card. And that crisis is more dire for single people  — especially single women — in part because married people often have two incomes and in part because men generally earn more money than women.

The most common advice for consumers with a less secure financial safety net is that they should work on building a sturdier one. Steve Cordasco, founder and CEO of Cordasco Financial Network and host of the podcast Your Life, Your Wealth, suggests the age-old mantra of “paying yourself first,” especially if single. “When getting your paycheck, put money away for yourself before it even hits your bank account,” he said.

Olen agrees that saving more and maxing out retirement accounts is smart, but she believes it oversimplifies the issue. She believes consumers should also lobby the government for more support in retirement and for equal pay. The fact that women tend to outlive men makes equal pay that much more important. It also serves as a sobering reminder that, as Cordasco puts it, just about everyone will be single in retirement at some point. As a result, he suggests regular financial stress tests so consumers can get a sense of worst-case scenarios and plan accordingly.

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Such planning should encompass more than just savings, too. Michael Brady, president of Generosity Wealth Management, stresses the importance of long-term care insurance (particularly for single women due to their longer life spans) and of having a reliable financial team (typically an attorney, accountant and financial adviser). “Since singles don’t have a spouse to hold them accountable or help them create and stick to a plan, this financial team can assume those roles and keep them on track,” he said.

Meanwhile, Cordasco emphasizes the importance of a different kind of team: one for emotional support. He says everyone has blind spots when it comes to planning for retirement. When single, sometimes the biggest issue is simply dealing with loneliness. As a result, having family or a community of people in similar situations nearby is an important complement to dollars-and-cents stability.

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Single retirement planning basics

Single retirees have less room for error, but Helaine Olen says staying on track requires following the same financial fundamentals. A few rules to live by:

1. Shoot for saving 10% to 20% of your income.
2. Avoid individual stocks.
3. Invest in low-cost index funds. 
4. If you seek financial advice, make sure they’re following the fiduciary standard.
5. Don’t roll over your 401(k) if you change jobs; just let it be. This will keep the cost basis of your investment lower.