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11 Ways Being Single in Retirement Can Save You Money
Retiring as part of a couple or a family is often treated as a certainty, but plenty of people retire solo, without a romantic partner.
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While media likes to make this sound sad, and expensive, there are ways that being single in retirement can actually save you money.
Retirement experts offered a positive reframe if you find yourself enjoying your own company in your golden years.
Being single in retirement means you're the CEO of your own plan, according to Gregg Cummings, a financial planner and retirement plan consultant and founder and CEO at Gregg Cummings Financial.
'Fewer decision-makers. More agility. The key is building a strategy around your lifestyle and values, not someone else's. It's cost effective and empowering,' he said.
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Most people would say one of their biggest expenses right now is groceries, and quite simply, if you're single, you're spending less on groceries than if you were buying for two, according to Brett Daniel, founder at Daniel Safe Money Retirement Solutions.
Single retirees are probably also saving on energy bills by using less electricity and saving on the water bill as well, Cummings pointed out.
Single retirees might also be saving on car costs.
'If you have a vehicle, you are more than likely only traveling for one, which means less money is going out for gas, less on vehicle maintenance and insurance than if you were paying these bills for two people.'
In general, being single tends to mean not only a lower spend on almost all basic essentials but 'leaner living,' according to Cummings.
'You are not planning around someone else's schedule, preferences or spending habits. That freedom lets you live smaller, travel lighter and spend more intentionally.'
Without a partner to have to negotiate living arrangements with, you're free to find roommates or co-housing communities that can dramatically reduce housing costs, Cummings said.
'You could cut housing expenses by as much as half just by sharing space in a retirement-friendly town with walkability.'
Budgeting can also be simpler if you're single, with only one set of expenses and one income to plan around.
'That clarity can make it easier to track spending, avoid lifestyle creep and make adjustments on the fly,' Cummings said.
Daniel added, 'There is no need to compromise on spending priorities and setting plans to travel as desired destinations can be possible without trying to meet the needs of two people.'
Though there are certain tax benefits that favor married people, single retirees over 65 get a higher standard deduction than younger single people, Daniel said.
'Singles may fall into lower tax brackets post-retirement making it advantageous to convert traditional IRA to a Roth IRA at reduced tax rates,' he said.
Best yet, older single adults may be able to avoid 'the marriage penalty' depending on tax brackets. Singles may pay less tax than married couples who file jointly (and thus are taxed on joint income).
Don't forget the saver's credit for singles, Cummings pointed out. Not to mention, 'filing as single [person] gives you a more predictable tax structure year over year,' he said.
When it comes to healthcare as a single person, the healthcare premiums for anyone ages 65 and older, Medicare, is determined by your income, according to Richard E. Craft, a financial advisor and CEO of Wealth Advisory Group.
'Remember, the full retirement age for Social Security is age 67, not 65 like for Medicare,' Craft said. A single person only needs to elect Medicare Part A for hospitalization, Part B for doctors and therapy services, and a Part D for prescription drugs.
'The cost for one is half of the cost for two so this saves money. You also have only one person to incur expenses so this should save over the long run.'
'Without a partner's income boosting your MAGI (Medicare Adjusted Gross Income) you could fall into a lower bracket,' Cummings said. That can reduce what you pay for Parts B and D.
'You also won't have a spouse's long-term care risks, which simplifies planning,' he said.
If you want to keep working for the social and financial benefits, Craft pointed out that a single retiree could take a part-time job and continue to contribute to a tax-deductible IRA.
'Even better, work for an employer who offers an attractive match for the 401(k) and contribute up to $31,000 and get the match on top of that. Remember, you don't have to work full time to be eligible for a 401(k).'
In a nutshell, the freedom to plan for one's own lifestyle needs is much simpler than when balancing the wants for two people, Craft said.
'[A single person] might be more flexible, can live on a smaller budget, can pick a low-cost area to live and cut expenses easier than two people … You can do with less if you want to.'
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This article originally appeared on 11 Ways Being Single in Retirement Can Save You Money
