On your own in retirement? Things to think about
Dr. Sandra Timmermann
Being on your own in retirement isn’t unusual these days. Twenty-seven percent of people age 60 and over live alone.1 Like everything in life, aging solo has its advantages and disadvantages. The decisions about your destiny are yours to make. You can control how you spend your time, who you want to spend it with, where you want to live and what you do with your money.
On the other hand, in times like these as the country is in the midst of a global pandemic, there is no one living with you to assess your symptoms, get you to the hospital if you need treatment and take care of you if you are sick. Even in the best of times, you ask yourself questions like “who do I put down as my local contact in case of an emergency” and “who will feed my pet if I can’t get home.” With no partner, spouse or child in residence with you, you have to be resourceful in taking care of life’s problems.
Aging alone presents some opportunities, but also some special challenges as you think through what you want to do in retirement and make your plans. It’s almost more important for solo agers to get a head start on the planning process since you may not have backup support to count on as you get older. By planning ahead, you can stay in control of your finances and your future.
Who are the solo agers?
Solo agers are those who live alone and are on their own. They might be divorced, widowed or never married. Some solo agers do not have children. Others do, but they may live geographically far away from them or may not have close family ties. Those in the LGBTQ community also may be aging solo. Thanks to increased longevity and the fact that women after age 50 are less likely to marry or remarry, it’s not surprising that women make up a large proportion of those who are solo agers.2 Seventy percent of older women live alone and according to Sara Zeff Geber, who is credited with coming up with the term “solo aging,” about 20% of Boomers do not have children.3 Ten years from now, women in the Boomer cohort will be in their 70s and 80s, a time when they are more likely to need care and won’t have children to be there for them.
Preparing for retirement: What’s different?
For those living and aging alone, especially those without children or with no children to depend on, starting early on retirement planning becomes very important. A holistic plan is the key. First, finances need to be in order. Healthcare and long-term care protection is critical, too. Developing a care plan and figuring out who will be there for you is also an important step, particularly since AARP predicts a caregiver shortage in the years ahead.4 And then there are life stage and lifestyle choices — where to live and how to live — to be made as well.
Here are seven tips for solo agers as they look ahead to retirement:
1. Start with finances
Like everyone in their 50s, solo agers need to focus on their investment strategy and have an income plan so they can replace their paycheck once they retire. Since there will be no one to bail you out later in life, it’s particularly important you make monetary decisions that are not too risky, but still have potential for growth so you don’t outlive your assets. If you liked being employed, may want to consider working longer so you can accumulate more assets and defer Social Security to take advantage of higher monthly lifetime payments.
2. Prepare for long-term care needs
Without children to fall back on as caregivers or decision makers, plans should be in place in case you need care. Care, either at home (where most of us want to be) or in a retirement residence, is expensive, so a long-term care protection product can be a good solution. Care managers, usually nurses or social workers, can help make arrangements when the time comes.
3. Develop a network of caring friends
Solo agers without a traditional family are in an enviable position in some people’s minds. They have the opportunity to create their own “family of choice.” Having close friends is important, not only for the joy and psychological support they provide, but also because they are able to help out when needed. You can be there when they need you, and they will be there for you if a crisis occurs or if you require some help with day-to-day chores.
4. Protect against cognitive impairment
Whether a solo ager or not, if you develop a cognitive impairment and can no longer make decisions for yourself, you will want to set up a plan and execute documents so someone can act on your behalf. Since it’s likely that a family member will not automatically step in, start the conversation early with those you trust, whether it be a close friend, a relative or a third party, such as an attorney or financial professional. That person will be able to advocate for you and carry out your wishes.
5. Explore different living arrangements
Most people want to remain in their own home as long as possible. When you are on your own in retirement, you may need to rethink that premise. What may be most important as you get older is a sense of community and the people who surround you. A 55+ development or a continuing care retirement community (CCRC) that guarantees care for life might be a good choice. On the other hand, if you like living where you are, there are new models, such as shared housing (think Golden Girls) and the Village to Village Network, local membership organizations that keep you connected and link you to services.
6. Ensure your estate matches your values
People with children generally do estate planning with their offspring in mind. For those who are solo agers, other considerations rise to the top. Choosing relatives as your heirs if you have little contact with them may not be where your heart is. You may want to leave your money to a cause you care about, a nonprofit organization where you volunteer that needs funds to operate or friends who have been especially important to you over the years. Why not align your estate with your values and direct your money to what matters most to you?
7. Develop a “purpose plan”
Once you retire, you will want to figure out what’s most important, what gives you joy and what will provide meaning and happiness as you age. You may want to give back by volunteering, starting a business or pursuing a long-lost dream like going back to school or learning a new sport. Whatever it may be, giving some thought to a “purpose plan” before you retire will make your later years more meaningful and fulfilling.
1 Pew Research Center. FactTank, March 10, 2020. https://www.pewresearch.org/fact-tank/2020/03/10/older-people-are-more-likely-to-live-alone-in-the-u-s-than-elsewhere-in-the-world/.
2 Merck Manual. Professional Version. Geriatrics. May, 2019. https://www.merckmanuals.com/professional/geriatrics/social-issues-in-older-adults/older-adults-living-alone.
3 Geber, Sara Zeff. Next Avenue, September 27, 2018. https://www.nextavenue.org/sara-zeff-geber/.
4 AARP Public Policy Institute, The Aging of the Baby Boomers and the Growing Caregiver Gap,” https://www.aarp.org/content/dam/aarp/research/public_policy_institute/ltc/2013/baby-boom-and-the-growing-care-gap-insight-AARP-ppi-ltc.pdf.
Equitable is the brand name of Equitable Holdings, Inc. and its family of companies, including Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY), Equitable Financial Life Insurance Company of America (MLOA), an AZ stock company with main administrative headquarters in Jersey City, NJ; Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN); and Equitable Distributors, LLC.