The number of currently married women who will live alone at some point during their retirement years, due to widowhood or a late divorce continues to grow at a steady pace. With 27.5 million married baby boomer women now heading into retirement, many may find themselves woefully unprepared financially for living life on their own.

I’m sure you’re already well aware of the long-standing statistics regarding women outliving their male counterparts as one of the primary reasons many women are often alone for some or all of their retirement years.

Late divorces are on the rise.

However, there is another growing reason which is also probably no surprise, a late divorce. Perhaps you or someone (or two) that you know have already thrown in the towel rather than sticking by that heartfelt marriage promise “till death do us part.”

The overall divorce rate in the U.S. has steadily declined for over three decades now. However, since 1990 the divorce rate among individuals 50 and older has doubled, for those aged 65 and older, it’s more than doubled according to researchers at the National Center for Family and Marriage Research at Bowling Green State University in Ohio.

These same researchers also point out that more than 55 percent of late divorces involve couples who were married for more than 20 years. Perhaps the “till death do us part” didn’t come soon enough.

Social media’s growing influence on divorce.

Why such a dramatic increase in the divorce rate for older individuals? Certainly increased longevity in and of itself is partly to blame, but perhaps another likely cause is the impact the growing use of social media has on our daily lives. In fact, according to a 2010 survey by the American Academy of Matrimonial Lawyers, one in five divorces now involves Facebook.

Although this blog article is not about social media and divorce, stay tuned for a future blog post on that, it is clear that women need to plan for their retirement years under multiple scenarios. And regardless of the actual cause that may lead up to being single at some point during your retirement years, proper planning and preparation can help make those years more financially stable for you.

The financial and emotional burdens of becoming suddenly single

Becoming single any time can be a stressful and emotional experience, but it can also be a financial burden too—especially during your retirement years. In many households, only one spouse tends to handle all the finances, retirement planning, investing and legal matters, and if you are unlucky enough not to be that spouse, and something happens you can quickly feel overwhelmed and confused as what steps you should be taking, or not taking for that matter.

Here are five ways to better prepare yourself. Just in case.

1. Take an active part in managing and planning your financial future

Whether retirement planning and investing are of interest to you or not, this is something that both you and your spouse should be active participants in. When there are meetings with your financial planner or attorney, make sure both of you attend and that you are actively involved in the discussions. While you may fully trust what your spouse is doing and the decisions that he is making, you still need to know what’s going on so that if you are left alone, you can continue with the plans that have been made without feeling overwhelmed or confused.

Make sure you have a good understanding of your overall financial situation, including the amount and location of your assets, an understanding of all liabilities, including mortgage balances, credit card debt, student and auto loans. Read through all legal documents that may affect your finances and the disposition of assets at either of your passing.

2. Calculate what your income and expenses may be if you were suddenly on your own

Probably the most important part of your contingent planning for your retirement years —figuring out how to live on just one income, rather than two. For many women, their household income will go down significantly when their husband passes away, or if your marriage ends at some point during retirement.

From a financial standpoint planning for a spouse passing away before you is often easier than planning for your retirement years after a late divorce. In a divorce, you are often dividing most of your assets, including your home, and then determining how best to live off of what is left. A far trickier proposition than that of a widower who still has the use of most if not all of their combined assets and potential survivor pension benefits.

Determine your available income sources and amounts.
In either case, planning ahead will provide you better clarity into your options and how to better prepare. A great starting point is to determine what income you will still have available to you in either situation. As a widower you can easily calculate your survivor income and social security benefits, as a potential divorcee it is a bit trickier. Start with what income sources you will have available to you in your name and determine what the best Social Security claiming options might be. (see below)
Calculate the income you can safely generate from your remaining assets
Seek the help of a qualified Financial Planner or Certified Divorce Financial Analyst to determine how much income you can safely generate from your remaining retirement and other assets such as money in an IRA or 401k, without potentially running out of money.
Determine your likely expenses and create a mock budget

Once you have a better idea of your potential income sources and amounts, compare that to your actual or estimated monthly expenses to determine if you will need to make adjustments to either. Create a mock budget and determine where you may need to make adjustments.

One way to make sure that you will still be able to meet monthly obligations during your single years in retirement is to have a plan in place to pay off large debts, such as your mortgage or automobile, before retirement. If items that account for a good portion of your monthly expenses are paid off, that will free up your budget each month—and make it easier to pay for your groceries, medications, and other recurring household expenses on your new, lower budget.

Don’t forget about Health Insurance
Don’t forget to consider your health insurance options and potential costs if you are not yet Medicare eligible. This can be a significant expense if you do not already have your employer provided coverage.

3. Review your Social Security Claiming options

Social Security offers a number of claiming strategies for both widowers and divorced spouses, and various combinations of the two.

For a Widower
If your spouse worked long enough under Social Security, you might be eligible to receive reduced benefits as early as age 60. If your disabled benefits can begin as early as age 50. For more information on widowers and other survivor benefits, visit https://www.ssa.gov/planners/survivors/.
For Divorced Spouses
Social Security benefits are not assets that a divorce court can divide, but the rules about what is available to you and under what scenarios can be complex. In general, if your marriage lasted ten years or more and you’re age 62 or older, and have not remarried, you can collect retirement benefits on your former spouse’s record, even after your divorce.
What if I remarry?
According to the Social Security Administration, usually, you can’t get widow’s benefits if you remarry before age 60. But remarriage after age 60 (or age 50 if you’re disabled) won’t prevent you from getting benefit payments based on your former spouse’s work. And at age 62 or older, you can get benefits on your new spouse’s work, if those benefits would be higher.

4. Consider the impact of losing your health in retirement

Long-term care has always primarily been a women’s issue. As I am sure you have witnessed on your own, there aren’t many men in your local assisted living or nursing facility. As Medicare generally does not cover the costs of Long-Term Care, it is one of those expenses that can completely derail your financial well-being in retirement.

Consider what the impact would be if you were suddenly faced with additional monthly expenses of $4,000 to upwards of $12,000 or month or even more, and the impact on the ability of your assets and income to continue to sustain those costs for any extended period.

If your goal is to protect your assets for your children, grandchildren or other heirs, or you simply want to maintain your independence for as long as possible by having more control over how and where you receive care, you may want to consider looking for Long-Term Care Insurance.

5. Make sure you have an adequate emergency fund

No matter what age you are, having three to six months of income in an emergency fund is a good idea. But it is particularly important to have during your retirement years. Should something happen to your spouse, knowing you have some breathing room by way of a strong cash cushion can bide you the necessary time to sort through your finances and make important decisions without feeling hurried and under pressure, which may lead to poor choices.

So there you have it. A roadmap to helping you prepare for potentially living on your own at some point in retirement. Perhaps you will never need to utilize any of this advice, but if you do, you will be better prepared and more confident in your financial future.

Sources:

U.S. Census Bureau – Census 2000, SocialSecurity.gov, 2016 Genworth Cost of Care Survey by Carescout., Centers for Disease Control and Prevention 2015 Mortality Report

Katie Moore, a Financial Planner with Finivi, is passionate about empowering savvy independent women, and women in transition due to a divorce, the death of a spouse, a career change, or other significant life event to expand their knowledge and build their confidence regarding money and investing.

Do you need help with your retirement planning? You can call (800)530-6635 to schedule a complimentary consultation or click here to schedule online.