Flying Solo in the Golden Years
April 3rd, 2008 | by admin |Whether it’s intentional or not, 19% of men and 40% of women over 65 live alone. This includes people who may be divorced, widowed, or just temporarily without a partner.
Because of the inevitable changes that arise with aging, including some physical limitations and, for most people, a reduction in income, living alone in retirement poses special issues that should be addressed up front. Among the top issues are getting and paying for necessary care if you become ill or disabled, choosing someone to make key health and financial decisions for you in these cases, and structuring a rewarding lifestyle that guards against loneliness and isolation.
The majority of older single women may face especially difficult choices because on average they live longer, but have less retirement savings and other resources to rely on than men. The Web site of the Women’s Institute for a Secure Retirement has extensive information on women’s retirement issues.
Individual Planning
But for solo retirees, regardless of age and sex, as well as for paired retirees, the basic challenge is the same: to plan and save ahead of time, choose a retirement date and lifestyle, and know you’ll be able to afford it.
John LeBlanc, a financial planner in Boston, says that many single people "tend to procrastinate [in planning]. They don’t have the partner to push them along." This is a mistake because single retirees don’t have the advantage of two Social Security checks, 401(k)s, or investment accounts to pay their bills." LeBlanc says that in his experience, the cost of one person living alone is more than half the cost of two people who live together.
Joan Gutknecht, a planner in St. Petersburg, Fla., also finds that many single people lack "a person with whom they can discuss confidently and confidentially" their financial issues. If you feel that way or need technical help, you can work with a planner to develop your retirement strategy. Otherwise you can try to do it yourself, using tips such as those in one of my previous columns (see BusinessWeek.com, 5/10/01, "Retirement Planning for Do-It-Yourselfers").
Health-Care Concerns
In case of illness, even short-term or non-serious, single retirees may not have a family member or friend who’s available to help out, so a key part of any plan should be preparing for two aspects of potential health-care needs: who will provide the care, and how to pay for it. "Think through what your support system would be should you face incapacity," says Susan Elser, a financial planner in Indianapolis. "If you needed the typical hip replacement, who would take care of your home? Who would care for your pets? Will it be your children? Your friends?"
Often, the answer will be one that costs money—visits by a home health aide or an in-home companion, or moving to an assisted living situation or a nursing home. In 2006, the average cost of a private room and bath in assisted living was more than $35,000 per year; the average nursing home cost for a private room was $206 per day, or $183 per day for a semiprivate room; and the rate for a home health aide was $19 an hour, or $17 an hour for a homemaker or companion. These costs vary widely depending on where you live. The MetLife Mature Market Institute, a research organization, lists the costs by state for assisted living and for nursing homes and home health care.
