Retirement planning for singles: how much do you need? 

6 mins readLast updated February 7, 2024by Kate Morgan

You may feel more financially vulnerable retiring as a single person. We’ve put together an in-depth guide covering the basics of retiring when you don’t have a partner or children to support you.

If you’re planning for retirement as a single person, you may be feeling vulnerable about your financial future. You certainly aren’t alone if that’s true.  

Another survey by Northwestern Mutual found that 38 per cent of singles said they felt “not at all financially secure,” compared with 23 per cent of married men and women.  

Even though single people are less confident about their prospects, careful planning will help you live a financially secure and happy retirement.

Here are some of the main things to consider when retiring as a single person.  

Key retirement considerations for singles

Don’t make the mistake of thinking that as a single person you’ll need significantly less money to retire.

The median income for a single retiree in the US is $27,000 and just under $54,000 for couples.

But life alone can be surprisingly expensive; you’ll still need to pay housing costs, transport, taxes and insurance, with only one source of income to cover everything.  

One of the ways costs creep up on single retirees is their lack of a network.

If your main associates are fellow older people, it’s likely you’ll need to pay for everyone from a caregiver to a cleaner to a gardener to help with jobs around the house.  

You will also need to think about where you’re going to retire.

Some states are preferred by retirees due to factors like low tax rates, affordable housing, good healthcare and pleasant weather.

careful planning will help you live a financially secure and happy retirement

Using your 401(k)

To increase the funds for your retirement, it’s wise to max out your 401(k) contributions and make the most of employer contributions while you can.

Many financial experts believe putting 15 per cent of your paycheck each month into your 401(k) will set you up for a financially stable retirement.

The right amount will depend on a number of factors, however, including: 

  • Your age when you begin saving for retirement (generally, the younger you are, the less you’ll need to save per month) 

  • Your goal retirement salary 

  • Your essential expenses, such as housing, groceries and health insurance 

  • How much social security you’re likely to get 

  • Other reliable sources of income, such as part time work or purchased annuities 

If you’re a high earner, you may need to look into other savings or investment vehicles for your pension funds.

Let’s imagine a 45-year-old employee, who earns a salary of $125,000, wants to put aside 20 per cent of their earnings for their retirement – or $25,000 before tax.  

IRS (the Internal Revenue Service) reviews the annual contribution limit every year and it currently stands at $20,500 for 2022.

If you’re over 50, you can pay in an additional $6,500 as a “catch-up contribution” per year.

For the employee above, they’d need to find another vehicle to reach their retirement savings goals. 

Planning for emergencies

A key part of retirement planning is ensuring you have a fund that can cover those out of the blue emergencies.

Your car could break down, leaving you stranded without transport, or you may need to take an unexpected cross-state trip or extended stay for a family emergency.   

You may have heard the popular rule that you should have six months of living expenses to cover you.

For singles, advisors suggest building a larger safety net of around 12 months of expenses while you’re working.

And as you get closer to retirement, it’s advisable to build a pot of savings that could cover a minimum of two years’ expenses.  

Another key concern is the accessibility of your emergency funds.

It’s pointless having all your money trapped in illiquid investments, which could be costly and difficult to release.

Keep your safety mat money in a savings account or other vehicle that can be accessed almost immediately.  

Covering healthcare costs

Around 70 per cent of older people will end up needing some sort of home help or health care.

Worryingly, less than half of aging adults believe they’ll need assistance in the future — and probably aren’t factoring it into their retirement planning either.

Even with federal and state assistance, medical care is likely to be one of the most expensive parts of retirement for singles. 

Some employers extend healthcare insurance to employees in the first few years of retirement — but, increasingly, this is being rolled back as companies tighten their budgets.

If you choose to pay for your own health insurance in retirement, you’ll need to consider that premiums can greatly increase as you age.  

Federal healthcare such as Medicare will also need to budgeted for, as around 20 per cent of your healthcare costs still need to be covered out of pocket.

Fidelity found that, on average, men spend around $135,000 and women $150,000 on healthcare costs over the course of their retirement.

Preparing for an earlier retirement

Developing a long-term health condition or disability can do a number on your retirement plans as a single person.

For couples, one person being out of work may simply mean spending the working partner’s paycheck more frugally until you both reach the age you’d planned to retire at.  

But for a single person, losing your job years before you’d planned to start drawing on your pension income can be devastating.

With no money coming in, you could be forced to use your retirement savings — ultimately compromising the financial security of your whole retirement.

You may also incur tax penalties for drawing on your pension before age 59.5, adding to the unforeseen and unwanted expenses. 

Taking out a disability or long-term illness insurance policy will give you a safety net pre-retirement that replaces up to 60 per cent of your income.

You’ll be protected financially in case of the worst and won’t have to worry about how to fund your longer retirement. 

Handing over your affairs

Though it’s not necessarily a financial matter, as a single people you should also consider who you’d like to handle their affairs in your elder years.

For couples, or single people with children, your spouse or kids are a natural choice to nominate for power of attorney.

Those without a partner or close family should consider if there is a local friend, neighbor or other trusted associate they’d like to help with financial and health matters. 

Content writer

Kate Morgan

Kate has written for leading publications and blue chip companies over the last 20 years.