6 Retirement Planning Tips for Single Women

Enjoy a Comfortable Retirement with These Steps
Jay Pluimer, AIF® CIMA® Monday, 20 March 2023

6 Retirement Planning Tips for Single Women

Retirement planning is an essential aspect of your financial journey. While it can be a daunting task for anyone, it can be especially challenging for single women. Women tend to live longer than men and may face unique financial challenges such as the gender pay gap and career interruptions due to caregiving responsibilities. However, with careful planning, single women can take control of their financial future and achieve a comfortable retirement. Below are six retirement planning tips for single women.

Start saving early and maximize your retirement contributions.

One of the most important retirement planning tips for anyone is to start saving as early as possible. The earlier you start saving, the more time your money has to grow through compound interest. As a single woman, you should aim to save 15% of your income for retirement. If your employer offers a 401(k) or similar retirement plan, make sure to contribute enough to take full advantage of any matching contributions. You should also consider opening an individual retirement account (IRA) to supplement your employer-sponsored plan.

Consider your risk tolerance and diversify your investments.

When investing for retirement, it’s important to consider your risk tolerance. Single women may have a lower risk tolerance than single men because women typically have longer lifespans and may need their retirement savings to last longer. However, being too conservative with your investments can also be detrimental to your long-term financial goals. A good strategy is to diversify your investments across different asset classes, such as stocks, bonds, and real estate, to reduce your overall risk while still giving yourself a chance to benefit from being in the market – rather than sitting on the sidelines.

SEE ALSO: 5 Unique Financial Planning Considerations for Women

Plan for healthcare costs.

Healthcare costs can be a significant expense in retirement, especially for single women who may not have a spouse’s healthcare benefits. You should plan for healthcare costs by estimating how much you’ll need to pay for healthcare expenses in retirement and incorporating those costs into your retirement plan. You may also want to consider purchasing long-term care insurance to protect your assets from the high cost of long-term care. A woman who is 65 years old today has an almost 70% chance of needing such care, and the average long-term care duration for a woman is 3.7 years.

Keep an emergency fund.

Unexpected expenses can occur at any time and having an emergency fund can help you avoid dipping into your retirement savings. You should aim to keep at least six months’ worth of living expenses in an emergency fund that’s easily accessible. This can provide a financial safety net and help you avoid taking on debt or dipping into your retirement savings during an emergency, such as an accident or illness that leaves you unable to work for a time. Consider building your emergency fund in a high-yield savings account so that it’s liquid and easily accessible, while still earning as much interest as possible.

Consider Delaying Your Social Security.

Here’s something that many people don’t realize – claiming Social Security benefits early can result in a lower monthly benefit. You can start claiming Social Security as early as age 62, but your benefit will be reduced by up to 30% compared to what you would receive if you waited until your full retirement age.

Consider delaying Social Security, if possible, especially if you're in good health and have other sources of retirement income. You can delay claiming Social Security up until age 70, and for each year you delay your benefit increases by 8%. Over time, this increase in benefits can add up to quite a significant amount of money. Since women tend to live longer, the benefits of what that 8% increase can do for women becomes even more drastic over time. Considering women receive roughly 20% less than men in benefits, this increase can become even more beneficial.

SEE ALSO:  Financial Tips for Women Who Want to Age in Place

Seek professional advice.

Retirement planning can be complex, and it’s important to seek professional advice from a financial advisor who understands your unique situation. An experienced financial advisor can help you develop a comp­­­­­­­­­­­rehensive retirement plan, assess your risk tolerance, and make investment decisions that align with your long-term goals.

At Flourish, we’re experienced in retirement planning for single women.

The financial advice industry is still overwhelmingly made up of men, but don’t let that hold you back. Many financial advisors, including those on my team at Flourish Wealth Management, are experienced in helping single women develop personalized retirement plans. In fact, we work with women at all stages of their lives and we would be happy to answer any questions you may have about what retirement planning looks like for single women. Contact us today to learn more about how we can help you plan for your financial future!

About the Author

Jay Pluimer, AIF® CIMA®

Jay Pluimer, AIF® CIMA®

Jay Pluimer brings over 25 years of experience working with Investment Committees and individual investors to Flourish Wealth Management. He has built a career focused on investment research, client conversations about investments, and building diversified portfolios to help clients accomplish their goals. As Director of Investments, Jay is passionate about the opportunity to deliver individualized investment solutions for our clients that help align their resources and goals.

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