Rose, Blanche, Dorothy, and Sophia had the right idea; four single, independent, retired women living out their best years together. The naïve Midwesterner, the southern vixen, the sharp-witted New Yorker, and of course Sophia, the matriarch of the family of four. They all were in good health, good spirits, and financially sound. According to the Pew Research Center, three in ten adults in the U.S. are single (31%), and of that number, 36% are 65 and older. The graying of America includes a significant population (49%) of single women. So how do you prepare for retirement as a single woman?
FINANCIALLY SOUND Single women have less savings in retirement than men and are more likely to live in poverty after age 65. The rate of poverty for single women is 26.1%. That statistic alone should get you to invest more. A more startling statistic is that only 26% of American women have money in the stock market. Those statistics have to change for more women to have independent and vibrant lives in retirement. Developing a dedicated retirement plan is the first step. As a financial advisor, I can help you make a plan and be your accountability partner. As a single woman, you should be maxing out your IRA every year and be taking advantage of your employer's retirement matching benefits.
LIVING ARRANGEMENTS While the Golden Girls did not live in a senior community, it's a good idea to explore housing with other seniors. There are almost one million seniors in Maryland, and there are 189 independent living communities in the state with an average cost of $3,238 per month. According to the CDC, poor social relationships or isolation can lead to an increased risk of heart failure, stroke, and dementia. It's important to stay active, and an independent living community can provide social and emotional connections.
SAVING FOR MEDICAL COSTS Medical costs can derail any retirement, and it's essential to have a plan. Medicare doesn't pay for everything, including eye care, dental and don't forget about those deductibles for hospital stays. It's good to have an emergency fund of at least 3-6 months to help pay for unexpected medical costs. You can also purchase Medigap coverage for expenses Medicare doesn't cover. Long-term care should also be on your radar while you are still healthy since insurance companies will not cover you once you are impaired. As a single woman, you are independent and ready to take on the world, but it's important to be prepared for everything, and anything retirement can bring.
The size of your savings account matters, but equally important is your spirit and joy for life. Start planning for retirement now, or if you are already retired and planning for the next phase, be ready for the best years of your life.
THE VALUE OF WORKING WITH A FINANCIAL PLANNER Financial Planning is not just about managing investment portfolios. More importantly, it is about having someone you trust to guide you when the unexpected occurs and to make sure your family has a trusted resource to rely on. At Abel Financial Management, we are local, family-oriented, and truly independent financial planners with a mission to help you make smart decisions with your money. If you or someone you know faces decisions like these, we invite you to have a conversation with us.
1. https://www.pewresearch.org/social-trends/2020/08/20/a-profile-of-single-americans/ 2. https://www.fa-mag.com/news/the-facts-of-life-for-women-retirees-54755.html 3. https://www.fool.com/research/women-in-investing-research/ 4. https://www.seniorhomes.com/maryland/independent-living/ 5. https://www.cdc.gov/aging/publications/features/lonely-older-adults.html