The Single Woman’s Path to a Happy Retirement

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Money matters are slightly different for women when they’re flying solo. Find out why saving while living the single life is a challenge, plus five suggestions you can put into practice today.

A recent report from the Rand Corp. brought good news. At least, it was good news if you’re married.

According to their research, 71 percent of Americans between the ages of 66 and 69 are adequately prepared for retirement, including 80 percent of married couples. However, if you’re single, that number drops significantly, with only 55 percent of Americans in that category ready to leave the workforce.

While single individuals of both genders can face an uphill battle when it comes to preparing for their golden years, single women seem to face a distinct set of challenges.

Why single women have it harder

According to Russ Thornton, “Single women have a unique combination of considerations and goals when it comes to retirement.”

Thornton, who specializes in helping women manage their money, is a financial adviser and vice president at Wealthcare Capital Management in Atlanta. He spoke with me by phone regarding how single women should be preparing financially for their life as a retiree.

He says these are among the major issues that could make it difficult for single women to have enough money to sustain them in their final years:

  • Increased longevity.
  • Caregiver responsibilities.
  • Lower incomes.
  • Lack of confidence in financial matters.

Keith Klein agrees. He’s the owner of Turning Pointe Wealth Management in Phoenix and a certified financial planner who works with a large number of female clients. I interviewed him on the subject of finances for single women and, like Thornton, he sees a need for women to be more aggressive in their investments, particularly given their longer expected lifespan.

“Inflation will affect a woman’s life more than a man’s life,” he says, adding that a woman’s longevity means she’ll not only need to cover more years in retirement, but that her money’s purchasing power will erode as she lives longer.

Caregiving can cause significant financial strain

Both Thornton and Klein zeroed in on caregiving as a significant concern for single women, and we’re not necessarily talking about young children here.

“The eldest daughter is usually first to go care for Mom and Dad,” says Klein. “She gives up time, and she gives up income that goes along with it.”

In fact, a 2014 report from the Transamerica Center for Retirement Services found that 74 percent of women taking time out of the workforce to be a caregiver believe it will negatively impact their retirement savings.

Beyond aging parents, boomerang children can also cause financial stress. “Many adult children are coming back home,” says Thornton.

While women may feel an obligation to take care of others, such as older children experiencing financial troubles, Thornton likens the situation to being in a plane where the oxygen masks are deployed. If you fail to put yours on first, you won’t be of much help to those around you.

“Women are always worried about others and neglect to put their own oxygen mask on,” he says, with money for retirement and other savings being the financial oxygen single women need to sustain themselves.

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