Retiring as a Single Woman: A Simple Guide

Retirement planning helps you build a bridge. It’s the strategy that brings you from your current financial position to where you need to be once you exit the workforce.

Exactly how that bridge is built is different for every person and couple. From overall lifestyle to addressing potential long-term care costs, everyone has different wants and needs.

However, certain aspects of retirement planning can become relevant or especially important depending on personal factors. For example, divorcees who meet certain conditions can claim Social Security benefits based on an ex-spouse’s record.

This is a crucial consideration in retirement planning because it can mean a larger Social Security payment each month. That option applies to everyone, regardless of gender, who qualifies for divorced spouse benefits.

In this article, we’ll focus on retiring as a single woman. Some points will apply to all single, widowed, and divorced people as well. However, everything is related to retirement planning for single women.

Keep reading to learn more about retirement for single women, including important needs as well as valuable potential opportunities.

Single Women: Retirement Planning and Key Needs to Address 

Having only one income isn’t an impossible challenge in retirement. However, it can make effective retirement planning even more valuable. Building a realistic budget for retirement and addressing potentially large costs, like long-term care, is crucial for single women.

Divorcees and widows may have certain assets, like a 401k account or IRA or partial payment from them, that come from a spouse. In other cases, a divorced woman may need to share payments or split an account with their former spouse. A complete strategy for retiring as a single woman needs to address those assets and obligations.

Life expectancy is another area that has special relevance to single women. Overall, women in the US live significantly longer than men. That additional time comes after many single women exit the workforce. To create financial security throughout retirement, that longer timeline needs to be carefully considered.

That’s especially important considering the potentially high cost of long-term care. The absence of a spouse who could help provide basic care and offset some of those costs must also be addressed.

Remember, being single doesn’t represent an impossible challenge in retirement in terms of income, saving, and investing. However, being single does mean that careful, personalized, and complete retirement planning can become even more valuable.

Potential Benefits to Consider When Retiring as a Single Woman 

Depending on your personal circumstances, you may have some advantages retiring as a single woman.

Consider long-term care. While this need is also a potentially significant and long-term expense, it may be easier to manage as a single person.

There’s no scenario, outside of marriage or remarriage, where you will also need to pay for a spouse’s long-term care. As a single woman, there’s likely a lower overall cost for care and certainly less uncertainty to deal with.

Your Social Security filing strategy also can offer certain advantages as a single woman, retiree, or widow. Keep in mind that Social Security payments are based on work credits, age, and other factors. The following advantages won’t apply to every single woman, but are especially valuable when they are available.

For single women, planning when to start taking benefits can have a major impact on finances in retirement. The Social Security Administration allows qualifying individuals to defer receiving benefits and receive a higher monthly payment in exchange.

People who delay their benefits after reaching full retirement age receive a monthly credit up to age 70. You should for benefits at age 70 at the latest. If your other retirement assets and investments can provide secure financial footing early in retirement, this decision can offer more guaranteed money each month later on.

Qualifying widows can elect to take their deceased spouse’s benefit instead of their own. Additionally, they can switch between those two benefits. That means an opportunity to receive payments from one benefit while the other grows due to deferment.

Qualifying divorcees can also claim their ex-spouse’s benefits instead of their own. This presents a similar opportunity to receive a higher monthly payment than would otherwise be possible.

How Much Money Does a Single Woman Need to Retire? 

It’s only natural to think about retirement in the context of the total amount of money needed. However, this approach may not provide the best perspective for retirement planning.

Instead of asking “How much does a single woman need in retirement?”, our team of fiduciary retirement advisors plan based on an income perspective. They develop a deep understanding of expenses. Then, they consider them in the context of your assets, savings, investments, and potential returns. That will form the basis of your retirement income strategy.

Our suggestion is to view your financial position in retirement in terms of a prudent withdrawal rate of 4%.

In other words, our big-picture goal is to help you structure your retirement investments in a certain fashion. Specifically, so that you can withdraw about 4% of your portfolio’s value each year while maintaining your investment accounts throughout retirement.

Start Planning Your Retirement as a Single Woman

Retirement is a complex process for everyone. There are so many variables to consider, from delaying Social Security to investment allocations, that it’s difficult to paint a complete picture of the process without in-depth knowledge and experience.

Working with retirement planning professionals can help you not only understand your current financial situation, but how to build a comfortable and financially independent retirement from that position.

Dechtman Wealth Management takes a personalized, goal-oriented approach to retirement planning. We assess your current position and learn about your unique goals and needs first. Then, we develop a retirement strategy that focuses on getting you to where you want to be in retirement.

Schedule a complimentary assessment today!