Friday, June 24, 2011

What if you were only One?

Boomers take heed. And late Boomers and children of Boomers should do so as well. Is "one" the reality that most of us face in retirement?

In truth, one is a reality for far too many older adults. Unlike the often advertised retirement of living out the golden years as a couple, the chances of doing so solo is far more common than we actually want to entertain. We plan that way though and if we do, it is often the woman who is the half of the couple that survives.

No one wants to think about a life in retirement as we youthfully walk down the aisle. And even fewer think about life alone as we say our vows. But the truth is, you can do much better thinking that way right from the beginning of your journey than making adjustments later in life.

Recently, I was confronted with two statistics: there are now fewer traditionally married couples in the US for the first time and that women can expect to be, on average, widowed by the time they are 56 years old. Both of these stats point to a greater chance that at some point in a woman's life, when they least expect it, they will be a party of one.

Even if you do not want to entertain the thought, you should keep in it in the back of your mind, plan for it as if it might happen and do so subtly. Here are five suggestions that apply to both sexes but because the odds are in the favor of the woman as the survivor or better, the soloist in this journey, it focuses more on that possibility.

1) Never let a career interruption stop your retirement plan from happening. Far too often, it is the years of child-rearing, the time spent taking care of an aging parent or even "working under the table" that has the greatest impact in the security women might have twenty or thirty years later.

2) As a couple, employing every option you have as early as possible is key to getting to retirement as close to worry free as you can. This means using your 401(k) as one half of a total plan and your spouse's as the other. Often, 401(k) plans are not even close to perfect. But you can create a hybrid plan that acts as a tandem plan. Suppose one has higher fees or one has index funds that the other doesn't offer. If a women has access to annuity in hers, she should use it. (Even as I am not much of a fan of annuities, inside a 401(k), they can be just the thing a plan like this needs in part, because they can't make a determination by sex.)

3) Plan as if you may not always be a couple. More than just death takes away the best laid plans of a couple. Divorce still impacts the woman more because it often happens later in life. And because it happens later, the woman, who has a half-baked notion of a plan because of what I mentioned in the first suggestion, it is a devastating event from a financial perspective. Even a good lawyer will be able to squeeze just so much out of the marriage, which may not be on solid financial footing in the first place.

4) You may not marry. And of you don't, you need to recognize that you are the only one that can save you. If you are a woman, the chances of outliving your retirement income is much greater in part because you don't have the accumulation of two incomes to fall back on at some point.

5) Consider your living arrangement as soon as possible. A house is great if you are able to maintain it (and this includes such mundane tasks as mowing the lawn or shoveling the walks). Baby Boomers will be the first generation to join their parents in retirement and this is a very serious consideration, particularly if you are the only single sibling. While how you live is important, where you live can have biggest impact on any retirement income, whether single or as a couple.

I realize that no one wants to think about the chance that life in retirement will be a solo event, but it will be at some point for one of you. Men and husbands should make every effort to plan for this possibility. Women should never let their men forget and keep funding their retirement even when it seems impossible to do.

Paul Petillo is the managing editor and founder of and and is a fellow Boomer.


Roberta Warshaw said...

I never thought of that. That we boomers are the first generation to be retired along with our parents. Is that really so? Wow.

Angus Dockrill said...

Great food for thought. The more I read about retirement, the more you understand that it is rarely 'just about the money'!