5 September 2022
Being single in retirement
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.