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This Type of Senior Is Struggling to Afford Retirement

·5 min read
A retiree holds her cane. A survey of over 1,500 senior homeowners found that single seniors are having a harder time financially compared to married couples.
A retiree holds her cane. A survey of over 1,500 senior homeowners found that single seniors are having a harder time financially compared to married couples.

Amid an economic environment marked by inflation, single seniors are having a harder time in retirement compared to married seniors, a new survey has found.

The results of the American Advisors Group survey suggest unmarried seniors have less money than they thought they would have in retirement, expressed a desire to increase their monthly cash flow and have a higher reliance on Social Security as their primary source of income.

A financial advisor can help you save for retirement and withdraw your savings in a tax-efficient manner. Find a fiduciary financial advisor today.

AAG's Modern Retirement Survey polled more than 1,500 senior homeowners between 60 and 75 years old to gauge they feel about their finances in the current economic climate. The survey was conducted in December 2021 as inflation reached 7%. The prices of goods and services have continued to increase since then, rising 8.5% in the 12-month period through the end of March.

Single Seniors vs. Married Seniors

A retired couple goes over their finances together. A survey of over 1,500 senior homeowners found that single seniors are having a harder time financially compared to married couples.
A retired couple goes over their finances together. A survey of over 1,500 senior homeowners found that single seniors are having a harder time financially compared to married couples.

Unmarried seniors appear less comfortable with their current financial situations when compared to married seniors. While 46% of single seniors said they would like to increase their monthly cash flow, only 32% of married seniors reported the same feeling.

A higher percentage of single seniors (44%) also said they have less money in retirement savings than they thought they would have, compared to just 32% of married seniors. Retirement planning is another area where unmarried seniors seem to have struggled more acutely than married couples. Thirty-six percent of single seniors said their retirement did not work out as planned, while only 23% of married seniors responded the same way.

When it comes to income sources, unmarried seniors are more reliant on Social Security than married couples. Social Security benefits were the primary source of income for 39% of single seniors, while pension funds were the most popular answer among married seniors (31%).

The disparity between single and married seniors is even more pronounced when examining the responses of single women. Half of all single senior women reported a desire to increase their monthly cash flow amid the current economic environment, while 45% said they ended up with less in retirement savings than they expected.

How Seniors Can Better Prepare

A retiree looks over her finances on her laptop. A survey of over 1,500 senior homeowners found that single seniors are having a harder time financially compared to married couples.
A retiree looks over her finances on her laptop. A survey of over 1,500 senior homeowners found that single seniors are having a harder time financially compared to married couples.

To better prepare for the uncertainty and challenges that potentially lie ahead, seniors can take a number of steps to improve their financial outlook in retirement. If you haven't already begun claiming Social Security, you may want to consider delaying it. By doing so, you will increase the value of your eventual lifetime benefit. This may require you to work an extra year or two, or perhaps employ a Social Security bridge strategy, locking in higher monthly benefits may help you in the long run. However, it's also important to keep in mind that you'll need to live long enough to make delaying Social Security worth it. It will take several years to eventually come out ahead compared to claiming earlier.

A reverse mortgage is another way to generate more income in retirement. This type of home loan allows people age 62 and older to convert home equity into cash flow by borrowing against the value of their home. The resulting cash or a line of credit does not need to be repaid on a monthly basis, but the loan balance is due when the borrower moves or dies. As a result, a reverse mortgage can lessen the value of a retiree's estate and reduce the amount of money beneficiaries may inherit one day.

However, research published in the Journal of Financial Planning found that reverse mortgages can help retirees protect their portfolios from market dips and extend their savings. Instead of relying on distributions from investments, a retiree can temporarily replace those withdrawals with income from a reverse mortgage line of credit when their portfolio loses value during downturns. According to the study, this strategy can reduce sequence of returns risk and preserve a retiree's portfolio for longer.

Bottom Line

Single seniors are having a harder time coping with elevated inflation and the current economic challenges compared to married seniors, a survey of more than 1,500 senior citizens found. The study concluded that single singles are more reliant on Social Security than married couples, who listed pensions as their primary source of income. More single seniors also reported a desire to increase their monthly cash flow compared to married seniors. Single people who are approaching retirement may want to consider delaying Social Security to boost their monthly benefits or potentially use a reverse mortgage in retirement to meet their income needs.

Retirement Planning Tips

  • A financial advisor can help you create a holistic plan for retirement that takes into account your income needs, Social Security benefits, living situation and more. Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.

  • Social Security plays a vital role in the financial plans for most retirees. The longer you wait to claim your benefits, the higher those monthly payments will be. But claiming Social Security before reaching your full retirement age (FRA) will mean locking in your benefits at a reduced rate. That's why planning ahead is pivotal. SmartAsset's Social Security calculator can help you estimate your future benefits based on when you plan to claim them.

Photo credit: ©iStock.com/Cecilie_Arcurs, ©iStock.com/Zinkevych, ©iStock.com/Vadym Pastukh,

The post This Type of Senior Is Struggling to Afford Retirement appeared first on SmartAsset Blog.