Retirement Life
5 September 2022

Being single in retirement

Single retirees fall into a number of categories. There are those who have never been in a long-term relationship, those who have had a long-term relationship end due to divorce or death of a partner before retirement, and those who become single after retirement. Gender also creates differences, as we know from statistics that single women face additional hurdles.


Let’s look at some of the issues and how they might be dealt with.


People who have been single for a long time are likely to have less money saved up to fund their retirement, especially if they have been single parents along the way. Getting to retirement with a debt-free home is enough of a challenge, let alone building a retirement nest egg. Yet on a per person basis, single retirees need more retirement savings than couples. That is because many living costs in retirement are fixed costs. Certain costs are incurred regardless of how many people live in a home. This category includes rates, insurance and internet charges, for example, as well as home maintenance and vehicle replacement.


Women who have been single for some time face an additional disadvantage when it comes to saving for retirement. Statistics show that women earn, on average, 9.2 percent less than men. Mothers also take time out of the workforce to care for their children, or work part-time. This greatly impacts how much they save into KiwiSaver and their ability to save in general.

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Another issue is that of financial management. As they say, two heads are better than one, and for single people, not having someone in their life with whom they can have close discussions around the management of personal finances and investment can be a problem. Money is one of the most intimate subjects for discussion. People are not only reluctant to share their personal financial details with others, but they don’t know who to trust.


Surveys show that women rate themselves lower on financial capability than men. This is probably a combination of reality and perception – that is, they may indeed have lower financial capability than men, but they may also be equally capable but don’t perceive themselves as so.


There are an increasing number of people divorcing in retirement – the so-called ‘silver-splitters.’ Dividing assets late in life dramatically impacts retirement as it is extremely difficult to rebuild wealth without a good income.


To overcome these difficulties, single retirees must learn to become very good managers of their personal finances. That means careful budgeting to keep weekly living costs to a minimum. Any retirement savings must be wisely invested so as to keep up with inflation. Leaving funds invested in bank deposits will only erode the purchasing power of money saved.


While it is important to have some funds in the bank to cover emergency needs and short-term spending, a diversified portfolio is a more appropriate investment for funds to be spent in the medium to long term. Home equity release is an increasingly popular choice for people with inadequate retirement savings. Alternatively, single retirees can look at alternative ways of living to help free up funds – for example, downsizing from the family home, living with children, or finding social housing solutions. The aim should be to have a secure, comfortable place to live and money to supplement pension income.


Single people with a small amount of savings are the people most in need of personalised advice to help them run down their investments over time at the right rate to lessen the risk of running out of money too early. Rules of thumb for working out how much to withdraw, or simply withdrawing when the need arises are not good strategies for singles. Careful management is required.


The challenge for retired singles is to make the most of what they have and to build connections with people and organisations who can provide professional advice.

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Written by:

Liz Koh

Liz Koh is a money expert who specialises in retirement planning. The advice given here is general and does not constitute specific advice to any person.

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