In fact, a 55-year-old couple today might pay as much as $466,000 for healthcare in retirement, while a 45-year-old couple might spend a whopping $592,000. When should I start taking Social Security? If you're confident you'll have enough savings to get by without Social Security, you might take a different approach to filing than someone who's desperate for cash. But before you can even begin to think about developing a Social Security strategy, you'll need to understand the implications of filing at various ages. While there's no single right age to start taking Social Security, playing around with different scenarios can help you arrive at a decision. Keep in mind that your health can, and should, play a role in your strategy -- the reason being that if you don't expect to live a very long life, you may be better off claiming Social Security as soon as possible to get the highest possible lifetime payout. On the other hand, if you expect to live well into your 90s, waiting can certainly pay off. How many years of retirement should I plan for? What's the best way to save for retirement? Either way, be sure to get some money into a retirement account sooner rather than later.
It can sometimes feel like everything is created with couples in mind — including retirement planning. When every article, tip, and suggestion for retirement starts with the assumption that you are married, you might be forgiven for assuming that retiring solo is just a matter of cutting retirement planning advice in half.
But there are specific challenges and concerns (not to mention benefits!) that single retirees need to prepare for before they hang up their careers. Here are seven ways that preparing for retirement is different for singles.
1. You need to have adequate disability insurance
Relying on no one but yourself can feel pretty liberating. Not only do you answer to no one but yourself, but you also get to enjoy the fruits of your own labor without having to compromise.
The downside to this, however, is figuring how you will protect yourself in case your income runs dry. While anyone who relies on income from their job should carry adequate disability insurance, this is even more important for single workers who may not have another safety net to catch them if a disability makes it impossible to work. You need to protect yourself, your income, and your assets from the possibility you may be unable to work, even before you start the nitty-gritty of retirement planning.
Even if you have disability insurance through work, that may not be adequate to protect you from a loss of income. Make sure you know exactly how much your work insurance covers and for how long, so that you are not left without an income if it’s not enough. Also, don’t assume that you are immune to potential disabilities just because the most strenuous thing you do at work is operate the copy machine. Illness is behind the majority of long-term absences from work — and anyone can get sick at any time.
2. Prepare for your health care needs
Health care costs are a major concern for all retirees, since this is one aspect of your retirement budget that you may not have control over. According to a 2016 Fidelity study, a 65-year-old couple retiring in 2016 would need $260,000 for health care to cover their medical and health care needs for the rest of their lives.
That dollar figure is frightening no matter your marital status, and it’s important that single people recognize that their costs may be higher than just half of a couple’s health care costs. That’s because many married couples can help each other to remain independent in ways that single retirees would need to pay for. For instance, you may need to pay for someone to help you at home or for entry into a retirement community sooner than a married couple would need those things.
While long-term care insurance has often been touted as a method of mitigating these expenses for both married and single retirees, the cost of this kind of insurance has become prohibitive. To prepare for the possibility of bad health in retirement, singles should also explore creative solutions to long-term health issues. For instance, taking in a rent-free roommate who helps with daily tasks is not only money-saving, but also offers social support. Planning ahead for potential solutions to health and mobility issues can provide you with some imaginative solutions that money can’t buy.