Approximately 23 million Americans ages 65 and older are single, divorced or widowed, according to the most recent data available from the U.S. Census Bureau (1). That means there are many people in this country who are planning their retirement on their own, without the help of a spouse or partner.
If you are a part of this group, there are unique considerations you may need to keep in mind as you navigate your path to retirement on your own.
■ Align your lifestyle with your savings: Whether it’s traveling, volunteering, visiting family, or working part-time, think about how you want to fill your days — then consider how you’ll fund your new lifestyle.
■ Plan for healthcare expenses: Decide how expenses are handled, including possibly needing long-term care. Depending on your situation, insurance coverage (including Medicare, Medicaid and long-term care insurance), health savings accounts and investment savings may be part of the solution.
■ Update your estate plan: Review and make any necessary adjustments to your estate plan and beneficiaries on key accounts to ensure they align with your wishes. Pick a trusted family member or friend to serve as your financial and healthcare proxy. An attorney can help you assign someone to make decisions for you in the event you can no longer act on your own.
■ Consider your mortgage: Think about whether you’d like to pay it off before or during retirement. Consider your tax strategy, cash flow needs today and down the road, and whether you intend to downsize or move.
■ For those who are divorced: If you were previously married, additional considerations apply as you think about your retirement plans:
• If you receive alimony payments, be aware that the amount you receive may be modified — or even end — once your ex-spouse reaches retirement age. On the other hand, if you are the one who makes alimony payments, make sure you understand how much you’re obligated to continue paying in retirement.
• You may also consider claiming Social Security benefits based on the earnings of your ex-spouse; as early as age 62. However, the longer you delay claiming benefits (up to your full retirement age), the larger your monthly benefit will be. Your claim has no impact on the amount of your ex-spouse’s benefits.
■ For widows and widowers: The following tips can help you as you reframe your retirement years:
• If you were not closely involved in managing household finances, enlist a trusted family member or financial professional to review your current situation. Track down passwords to all your accounts and make an updated plan to address your current needs and retirement goals.
• If you collected an insurance settlement following the passing of your spouse, focus on investing that money effectively to help generate income during your retirement.
You can also claim Social Security survivor benefits if you are at least age 60. How you decide to spend your retirement days is personal — so your retirement plan should be too. Turn to a tax professional and financial advisor for guidance on what steps to take next.
MICHAEL W. K. YEE, CFP,® CFS,® CLTC, CRPC®
1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
808-952-1240 | michael.w.yee@ampf.com
ameripriseadvisors.com/michael.w.yee
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC ®, is a Private Wealth Advisor, Certified Financial Planner ™ practitioner, with Ameriprise Financial Services, LLC in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 39 years.
(1) “America’s Families and Living Arrangements: 2022 – Table A1,” United States Census Bureau. Last Revised – November 21, 2022. census.gov/data/tables/2022/demo/families/cps-2022.html.
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