5 Tips for Single Women Planning Retirement

5 Tips for Single Women Planning Retirement

October 15, 2021

Women in the United States are living longer than ever before. Modern women have more time to work, save for retirement and they generally retire around the age of 66. However, the average life expectancy of females is now 81 years (and 30% live well into their 90s). This means women can likely be retired for up to three decades! They must prepare their finances now to ensure their best future. Don't leave this to chance.


While most people plan to retire as couples, there's no guarantee and life can throw unexpected challenges at us. Retirees often are left to face financial responsibilities without a partner or spouse (through death, divorce, or choice). In addition, lingering inequalities in the labor market mean women still make less over their wage-earning years than men. As a result of reduced earnings, it can be difficult for women to save for retirement. This is compounded at retirement as women draw 29% less from social security

For a woman wanting a successful single retirement of financial freedom, independence, and stability, there are five key things to consider:

  • Start thinking about retirement preparedness, now.
  • Consider health insurance that includes long-term care.
  • Don't draw Social Security until full retirement age (FRA).
  • Don't underestimate single women's investment needs.
  • Plan to live well and enjoy your retirement!

 1) Start thinking about retirement preparedness.

There's an old Chinese proverb, "The best time to plant a shade tree is twenty years ago. The second-best time is now". Planning for your future single retirement financial needs is like this proverb. It's better to take that first step now when you're in good health and have sufficient capital than when you are older or in worse financial shape. But too many people put off developing a retirement plan until it's too late.

Single people (both women and men) are more likely to have not saved for retirement (roughly 50%, versus 81% of married people). Only 43% of singles put money in individual retirement accounts, and only 16% have money in a defined contribution (DC) plan. These numbers become even starker when divided by gender. The OECD notes that women were much more likely to experience elder poverty than men before COVID-19. This gap is predicted to widen in the future.

The first hurdle is just to start thinking about saving for your future finances. Three big questions to ask yourself in this planning process include:

  • How will I occupy my time in retirement?
  • How much income will I need each month?
  • How much will I likely need to cover health expenses?

If you don't know the answer to these questions today, start researching your options and begin to build a financial plan. You’re in the right place because we’re here to help. Check out our free eBooks and other resources here

2) Consider health insurance for long-term care.

Everyone deserves dignity and security in their old age. According to the Department of Labor, to keep up their standard of living, retirees should prepare to live on 70-90% of their pre-retirement income. However, there are expenditures other than the day-to-day cost of living for the elderly to consider, namely, additional health care costs (especially long-term care).

The need for long-term care is an issue faced by many seniors today. There are more older adults alive than ever before and two-thirds of all humans who have ever lived past the age of 65 are alive today.   Long-term care services and support will become increasingly expensive for this group as they age. According to the US Administration on Aging:

  • The probability of someone turning 65 requiring long-term care services at some point over the rest of their life is nearly 70%
  • On average, women need care longer than men (3.7 vs. 2.2 years)
  • 20% of over those 65+ will require care for more than 5 years

A long-term care insurance policy can be an essential investment. It will cover the costs of assisted living if your loved ones can't take on caring responsibilities anymore. Even if you are lucky enough to get help from family or friends, you may require assistance beyond what your family can provide physically and financially.  It pays for singles - particularly women, who are more likely to survive long enough to require and benefit from assisted living services - to consider Long-Term Care Insurance policies to maintain their independence!

3) Don't draw Social Security until you reach full retirement age (or even later!)

COVID is forcing many Americans into early retirement. Older workers across the country – especially women – are retiring early after battling the pandemic. But this might not be in your best financial interests.  Women considering early retirement may not have factored in the sizable advantages of delaying Social Security benefits.

Firstly, it may put extra stress on an investment portfolio if you leave your employment prematurely. You'll have to stretch your savings to make them last longer if you retire early. 

But more importantly, if you draw your Social Security before reaching full retirement age (FRA), it will lower the amount you are eligible to receive. This drop is permanent and affects all future payments - some people mistakenly think it resets when you reach your FRA, but this is not the case.  If you can, wait even longer to maximize Social Security Benefits!

There are also incentives to delay Social Security payments by working past the normal retirement age. These financial bonuses work out at 8% per year. If you wait until you are 70 you qualify for the maximum bonus of 4x8% (32%) and receive 132% more than at the normal retirement age. 

The difference is staggering, particularly when you factor in longevity. Those who expect to live well into their 80s or 90s (as women are more likely to do) stand to benefit the most from waiting to access their Social Security. But the break-even age is approximately 81, so if for any reason your life expectancy is not going to be that long, it could make sense to tap into your benefits earlier.


Some suggest there are financial advantages to drawing on social security as soon as you reach retirement age. And there are reasons why couples might consider one partner collecting social security before reaching FRA.  

However, only 6.5% of those claiming Social Security early actually build their wealth from this choice. Over 70% of retirees collect their benefits prematurely, losing an average of $111,000 across their retirement. 

A collective $3.4 trillion is lost in reductions by early claimants. This loss can be more impactful for women, who receive roughly 20% less than males, and make up almost 55% of those receiving benefits.


If you are single, or your life expectancy is greater than your spouse's, delaying benefits provides the single-highest returns on your Social Security contributions. But don't just rely on the federal program for financial protection. Consider also contributing regularly to employer-sponsored investment retirement plans (like a 401k) if you can.

4) Don't underestimate single women's investment needs.

When it comes to retirement, women are systemically disadvantaged. Studies show women are two-thirds less likely to receive annuity and pension income. Partly this is due to lingering wage differences. But there are other issues, such as how traditional employer-sponsored retirement plans are geared towards male career pathways and employment patterns.  


Employer-sponsored retirement plans come in two forms—defined benefit (like a pension, DB) and defined contribution (like a 401(k), DC). Because DB plans are usually ‘back-loaded’, they are best for those with long, uninterrupted careers. This usually means that men - who on average still have longer durations of employment - are disproportionately rewarded with larger benefits. 

Here are three factors to consider if you get a choice between DB or DC retirement plans:

When do the benefits vest? 

DB requires several years of job tenure before you can take ownership of the benefits you've earned. However, with DC plans, most of the time you are immediately vested in contributions, and workers take their accounts with them at job separation. This can fit some women's career patterns and lifestyles better. 

Which plan gets you the most income in retirement?

DC plans don’t automatically provide a consistent monthly income. This may be a consideration in favor of DB plans. Another advantage of DB plans is that women with identical earnings and tenure to male employees receive equal payments. As women live longer, they can benefit in the long run, all other factors being equal.

Do you prefer stability or flexibility?

DC plans can involve challenges, including making decisions about contributions, distributions, and withdrawals. Studies show that many women feel less confident making financial decisions and, on average, have less risk tolerance and invest more conservatively. This can hamper the rate of returns they can earn on their portfolios. With the proper planning, however, you can create a stronger future.

As always, consulting with a professional, fee-only financial advisor will ensure you receive the best information for your own financial security.

5) Plan to live well and enjoy your retirement!

Studies show that 55% of workers aged 65 plus view retirement as a "new chapter" when they expect to have the freedom to enjoy new interests, friendships, and experiences. This chapter can be enriched by careful preparation to create financial security and stability - but don't forget to prepare for your best social future as well!   Close relationships can help you live longer and improve your quality of life. Finding new hobbies and activities is a great way to discover new friendships and makes acquaintances. 


Some people can't wait to retire. But there's also a risk of boredom or regret after leaving the workforce. Researchers at Oregon State have found that you're likely to live longer if you retire after 65. According to the RAND Corporation, 39% of those aged 65 or older return to work after an initial retirement. Careers can give our life meaning – and keeping mentally active can help stave off age-related conditions like dementia

Before taking the plunge and leaving paid employment forever, why not consider taking a leave of absence and scheduling a "test retirement"? Try living on your retirement budget for a month. If you are considering retiring early, this allows you to determine how the reductions may affect your day-to-day expenses. And it's an excellent opportunity to find if you really want to retire or just need a break.


Do single women face different challenges than men? The answer is yes, not only for financial reasons but also for health and social ones. Women are more likely to live longer, leaving them more financially vulnerable and lonely. Financial stability is a key factor, especially when living on your own. 

But you don't have to face retirement planning alone. A trusted Fee-Only Financial Advisor can help you make the best decisions. For many women, retirement is not top of the list. But the reality is that if you want financial freedom and independence, it's never too early to save for your future.

5 Take-Home Messages from this article:

  1. Know that your single status can be a plus in retirement planning
  2. Make financial decisions on long-term, not immediate, needs.
  3. Take proactive steps with DC plans and consider taking a trial retirement before stopping work for good.
  4. Plan your single retirement to include social preparedness as well as financial goals.
  5. Get guidance with your single retirement planning and contact a Fee-Only Financial Advisor today.