9 Retirement Planning Tips for Single Retirees: How To Secure Your Finances in Retirement (2024)

Thinking about retirement can feel overwhelming, especially if you’re doing it solo. A surprising number of people find themselves a bit behind when it comes to saving for those golden years. According to a 2023 survey by GOBankingRates, most Americans have stashed away less than $50,000 for retirement. Even more eye-opening, about 36%, including 31% of those 65 and older, have less than $10,000 saved. Another 27% have saved a bit more, between $10,000 and $50,000.

Read More: 3 Ways To Recession-Proof Your Retirement

But here’s some good news: Even if you’re flying solo without the extra boost of a partner’s income, you can still work towards a comfortable and happy retirement. With some smart planning and helpful tips, creating a future that’s both financially secure and enjoyable is completely within reach.

The Benefits of Being Single in Retirement

Single retirees have some unique advantages. You can make choices about your money and lifestyle without needing to agree with anyone else. This freedom means you can quickly change how you save, spend and live to suit your needs best. It’s all about making decisions that are right for you.

These include:

• Complete control over financial decisions
• Being able to quickly adapt your spending and saving
• Lower expenses and reduced living costs, compared to couples
• Tax benefits–if you fall into a lower tax bracket, it may result in lower income tax rates

Before diving into the tips below, remember: being single in retirement gives you a powerful opportunity. You have the flexibility to shape your retirement into exactly what you want it to be, making sure it’s secure and enjoyable just for you. Here’s what you can do now to prepare for the future.

1. Understand Your Retirement Needs

The first step in effective retirement planning is to understand how much you will need. A common rule of thumb is that you will require 70-80% of your pre-retirement income to maintain your standard of living in retirement. However, as a single retiree, your needs might be different. Ask yourself, “how much do I need?” Consider your lifestyle preferences, expected health care costs and any other personal circ*mstances that could affect your retirement expenses.

2. Maximize Your Retirement Income Sources

Putting your eggs in different baskets can make your financial situation more stable when you retire. Besides what you’ll get from Social Security, think about other ways to bring in money. This could be through a pension, saving plans like an IRA or a 401(k), annuities or other investments. Having money come from different places can help make sure you have enough to cover your bills and maybe even treat yourself to something nice in retirement.

3. Take Advantage of Retirement Accounts

Putting more money into your retirement accounts is great for growing your savings and can also help you pay less in taxes. If you’re filing taxes by yourself, it’s important to know how putting money into these accounts can lower the amount of income you’re taxed on. Also, if your job offers to match your 401(k) contributions, make sure you’re putting in enough to get the full match. It’s like getting extra money for free.

4. Delay Social Security Benefits

While you can start receiving Social Security benefits at age 62, delaying benefits until your full retirement age (or even age 70) could make your monthly payments go up. This strategy is especially beneficial for single retirees, as that extra bit can help make up for not having a partner’s income.

5. Plan for Healthcare Costs

Healthcare can be one of the largest expenses in retirement. Make sure you have solid health insurance that suits your needs. Think about saving money in a Health Savings Account if you can. HSAs are great because they offer triple tax benefits and can help pay for healthcare costs in retirement.

6. Manage Living Expenses Wisely

As a single retiree, you have flexibility in managing your living expenses. Downsizing to a smaller home or relocating to a more affordable area can reduce your monthly expenses. Consider the cost of living, taxes and access to healthcare services when choosing where to live in retirement.

7. Create a Withdrawal Strategy

Plan carefully when you take money from your retirement accounts to make sure your savings last as long as you need them. Think about taxes and use different types of accounts–some that tax you now, some later, and some not at all–to keep your taxes low over time.

8. Seek Professional Advice

Lastly, it might be a good idea to talk to a financial advisor. They may provide you with more perspective on planning for retirement and can give you advice that fits just right with your situation. This can help you make smart choices that match up with what you want for your retirement and what you need money-wise.

9. Know How Taxes Affect Your Retirement Savings

Planning for taxes is a big part of getting ready for retirement, especially if you’re retiring by yourself. Knowing how your retirement money will be taxed helps you make smarter choices and could even save you money over time. If you’re single, the taxes you pay might be different from what married couples pay. This can affect how much tax you owe on Social Security, the money you make from investments and when you take money out of retirement accounts.

You might think about certain plans, like Roth conversions, which let you pay taxes now so you can take out money tax-free when you retire. Or you might plan when to take money out to make sure you’re not moving into a higher tax bracket. Also, remember that starting at age 72, you have to start taking money out of some retirement accounts, which could change your taxes too. Being smart about how and when you take out your retirement money, considering the taxes, can really help your retirement income go further.

Final Take

Retirement planning as a single retiree presents unique challenges, but with careful planning and strategic decision-making, you can build a secure and enjoyable retirement. Remember, it’s never too early or too late to start planning. By understanding your retirement needs, maximizing your income sources and managing your expenses wisely, you can look forward to a retirement filled with peace of mind and financial stability.

Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.