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Singles in Retirement: A New Chapter

For numerous Americans, embracing the retirement phase alone wasn't on their life blueprint. Yet, millions are stepping into their golden years without a partner, facing both emotional and financial challenges, as highlighted by a recent study from the Nationwide Retirement Institute. The findings show a stark reality: a significant number of single investors feel financially strained, navigating an unplanned life chapter where the absence of a partner complicates retirement planning.

Understanding the Emotional Toll

Roughly a quarter (25%) of single investors express that they did not envision being alone during retirement. This feeling is coupled with anxiety, as around 22% fear aging alone without support. While a scant 9% report enjoying the freedom that comes with being single, the longing for companionship remains strong, with 26% still hoping to find a partner during their retirement years.

This emotional turbulence is compounded by financial concerns. According to the study, over one-third (37%) of single investors report experiencing greater financial hardship than their partnered peers, a statistic that rises to 44% among those under 50. Alarmingly, 18% of non-retired single investors question if they’ll ever have the resources to retire comfortably.

The Financial Disconnect

Single investors often set high financial expectations for themselves, a phenomenon that becomes evident when comparing savings figures to ideal targets. Approximately 46% believe they need around $600,000 in savings to feel financially secure in retirement, yet only 23% have managed to save at least $250,000. Even fewer, only 18%, have saved $500,000 or more, reflecting a significant gap between their goals and their reality.

Rona Guymon, Senior Vice President of Nationwide Annuity Distribution, comments, "Single investors face retirement challenges that their partnered counterparts do not, relying solely on their individual efforts. Understanding that retirement savings goals vary based on individual circumstances—not just relationship status—is crucial. A solid plan, particularly with the guidance of a financial advisor, is paramount for these retirees."

Investment Strategies and Advisor Engagement

When it comes to investment approaches, single investors may overlook opportunities exploited by their partnered equivalents. Only 49% of single investors employing protective strategies against market risks focus on asset diversification, compared to 62% of partnered investors. Furthermore, 34% lack a risk protection strategy altogether, indicating a potential gap in financial preparedness.

Interestingly, only 35% of single investors engage a financial professional, in contrast to 46% of partnered counterparts. Those who do take this step perceive substantial benefits, including reduced market risk (20%), enhanced decision-making (15%), and a long-term focus (15%).

Advisor Insights and Focus Areas

Financial professionals are now prioritizing assistance for single clients, particularly as they near retirement. Issues such as Social Security claims and retirement fund withdrawals are increasingly coming under their advisement. Furthermore, with single retirees often experiencing unfavorable tax implications due to their status, over one-third of advisors emphasize tax planning to mitigate challenges typically addressed through spousal income.

Key Financial Considerations for Single Retirees:

• - Emergency Funds: A solid emergency fund remains vital for single retirees who lack a secondary income source.
• - Estate Planning: This area takes on new dimensions for those without partners or children, emphasizing clear beneficiary designations and representation plans.
• - Long-Term Care: Proactive planning for long-term care is critical, as single retirees often lack natural caregivers.
• - Tax Liabilities: Without joint filing benefits, single retirees may face heightened tax rates.
• - Social Connections: Building a networking system is essential to combat loneliness and its potential adverse effects on financial decision-making.

"The benefits of collaborating with a knowledgeable advisor are clear for single individuals contemplating retirement," asserts Guymon. The current market's volatility underscores the necessity for single investors to remain focused on their long-term strategies while understanding the value of protective solutions like annuities, especially when there’s no partner offering additional support.

The Nationwide Retirement Institute is dedicated to providing essential resources, ensuring that these critical conversations are meaningful and effective. For a deeper understanding of this survey, check out our comprehensive infographic.

The tenth annual Advisor Authority study sheds light on pressing issues faced by advisors and investors alike while offering innovative strategies to thrive in today’s complex financial environment.

About the Study

Conducted by The Harris Poll, this study surveyed over 610 advisors and 2,524 individual investors with investable assets. With a focus on distinct demographic groups, this analysis provided insights into the financial behaviors and needs of various segments, particularly single investors facing retirement.

Conclusion

The landscape for retirees, especially singles, is filled with unique challenges and opportunities. Understanding one’s financial and emotional position is essential to navigating this critical stage of life successfully. As more Americans embrace retirement alone, the importance of strategic planning and emotional support cannot be overstated, setting the stage for fulfilling golden years ahead.