Retirement Planning: Single Retirees Save Much Less Than Married Ones

No doubt most couples have a hard time saving for retirement. But apparently single retirees fare even worse.

According to a 2012 study, the amount of money singles in their late 60s have saved for retirement is overwhelmingly less than that of married couples. The study found that the median married household had saved up nearly 10 times more for retirement in 2008 than the median single-person household, or $111,600 compared with $12,500.

So why the vast difference? There are many reasons, experts say, including the fact that singles don't enjoy the cost savings incurred when two or more people share household expenses.

To find out how single retirees can bridge the divide, we asked retirement expert Jerry Golden, president of Golden Retirement Advisors and developer of retirement planning tool Savings2Income, for five tips that might help.

1. The focus of any retiree or near-retiree, whether single or a couple, should be on the amount of retirement income needed each month -- in other words, what to anticipate having to spend, and for how long. Rather than focus on the savings "number" an investor should achieve by retirement, a retirement plan should be built around income, taking into account Social Security, any pensions or wages from any part-time work, and finally on the income an investor can safely generate from savings.

2. In any budget include having to pay for long-term care (and/or long-term care insurance) and unreimbursed medical expenses in retirement. Single individuals will not have the benefit of caregiving from a spouse.

3. The income objective should look at all retirement income sources including Social Security, any pension income and all sources of savings inclusive of amounts held outside a 401(k) or Rollover IRA. In particular, single individuals need to make smart Social Security claiming decisions (including the possibility of spousal benefits, if appropriate, as a widow/widower or divorced spouse).

4. Focus on things that can be controlled, like fees, taxes and diversification, and not on what can't be controlled, like market returns and interest rates. A single individual ought to consider purchasing Guaranteed Income through life annuities (with a refund feature in the event of an early death) since these annuities can pay out significant guaranteed cash flow that lasts a lifetime. Purchase these life annuities on a staged basis beginning when retirement income is first needed, and every few years thereafter until a chosen “no-worry age” (and level of guaranteed income for life) that is comfortable is reached.

5. Single individuals should not be intimidated by any traditional broker when accounts may have to be shifted into a plan for retirement income. Reject any drawdown strategy as a way to generate what will be needed each month in retirement -- those strategies are best left to the "one-percenters" among us. For the rest of us, it's not how much you have, but what you will be spending and for how long.