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Retirement Planning Strategies for Single Women


General financial advice can apply to many people. But as an individual, there are unique financial challenges that will be specific to you. According to a 2021 Fidelity study about women and investing, almost seven in 10 women feel confident about managing their household budget, but only 31% are confident about planning for their financial needs in retirement. Here’s a breakdown of what to consider when planning for retirement.   

A financial advisor can help you create a financial plan that is tailored specifically for your needs.

Creating a Retirement Budget and Investment Plan

The first step towards creating a retirement plan involves understanding your retirement goals. 

These goals can vary from maintaining a specific lifestyle to estate planning and charitable giving. At the top of this list, you may also include maintaining financial autonomy and housing security. 

Creating a financial plan can help you get a fuller understanding of your budgeting and investing needs for retirement. Just over seven in 10 women told Fidelity in 2021 that setting up a financial plan made them feel more confident about their finances. 

When you put your retirement budget together, you will have to take stock of your financial situation. This will include a breakdown of income sources like savings, pensions and social security to estimate how much money you will have in retirement. You will need to adjust your budget to account for inflation and potential healthcare costs.

Part of your retirement plan must also focus on investments. The Fidelity study showed that women who invest outperform their male counterparts by 0.4% on average. 

An investment portfolio can range from low-risk bonds to high-risk stocks, or diversified mutual funds depending on your preference. For example, if you have a lower tolerance for risk, you might prefer to invest in a balanced portfolio of bonds and index funds.

When assembling your portfolio, you should aim to diversify your investments. This will help you minimize risk and get bigger returns when compared with the interest you could receive from savings alone. An asset allocation calculator can help you balance your portfolio based on risk tolerance and time horizon.

3 Key Things to Consider for Your Retirement Needs

A single woman deals with problems with her retirement plan.

In order for you to maximize and protect your retirement funds, you will also have to get a fuller understanding of your Social Security benefits, plan for long-term care needs and create an estate plan. Here are some takeaways for each:

Strategies to maximize your Social Security benefits. While Social Security will only cover part of your retirement expenses, when it is strategically combined with your 401(k) or an individual retirement account (IRA), it can help boost your nest egg for retirement. 

Your benefits are based on your earnings from the 35 highest income years and your full retirement age, which can fall between 65 and 67. You can start collecting Social Security at 62, but this will cut down your benefit to 75% of your eligibility. However, if you can wait until 70 to take your Social Security, you will receive 132% of your regular benefit amount

Planning for your long-term care needs. Long-term care refers to a specific range of services that are necessary for people with debilitating health conditions or disabilities. These can include custodial care, which provides bathing, bathroom and eating services, among others. And women tend to pay more than men.

According to a 2022 study, the cost of long-term care insurance premium for a single 55-year old woman is $3,700 per year – which is $1,480 more that what her male counterpart pays.  

The Urban Institute and the U.S. Department of Health and Human Services says that the average 65-year-old today has a 70% chance of needing long-term care in retirement. And of those who need it, most will use it for roughly two years, but 20% will require services for more than five years. 

Planning your estate as a single woman. You may think that estate plans are designed for couples or parents. But, if you want to secure your assets for a loved one, a friend or a charity, this legal document will ensure that your assets are distributed to the beneficiaries that you assign. And, it can also help minimize how much taxes they will have to pay after you are gone. 

Additionally, as an individual, you will want to find someone you can trust with a financial or medical power of attorney and execute your will

Estate planning also includes creating trusts, establishing guardians for living dependents, appointing beneficiaries for your life insurance and retirement accounts, making funeral arrangements for yourself and scheduling charitable gifts, among other preparations.

Bottom Line

A single woman begins to make a retirement plan.

While general financial advice is a good starting point to guide your retirement planning, individuals can face unique financial challenges. And as a single woman, you will have to prepare for your specific needs.

Financial Planning Tips for Women

  • Almost eight in 10 women told Fidelity that they would be more confident about their financial future if they had a financial advisor to help them invest. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you have saved up money and are on the fence between paying off debt or investing, this guide can help you prioritize these competing financial goals.

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