One of the reasons I started my blog was the negative headlines I kept coming across shouting that single women were behind in saving for retirement, and that they faced a poverty-level existence in their old age if they didn’t take control of their finances very soon.
The headlines weren’t necessarily wrong—the amount single women have saved for retirement is much lower than it should be—but I can’t believe all is lost. Being single can be an asset in retirement planning—really! And if anyone can turn things around, it’s us. Here’s why.
Our Income and Spending Is Ours to Control
I don’t want to downplay the factors working against women here—the persistent gender pay gap in the United States, the fact that women are more likely to have breaks in their employment history or to work part-time, and more.
But I think it is important to recognize that, when faced with these inequities, single women are at an advantage: we get to react without the need to accommodate the desires of a partner.
First, we can take steps to increase our earnings by seeking higher paying positions, asking for raises, taking on side hustles, and going into business for ourselves (or a combination of these options) without having to check in with someone else.
Many jobs ago, I recall presenting the human resource director of the organization at which I worked with a request for a raise that specifically documented my value compared to my salary. She told me that wasn’t how it worked and that it might be possible to revisit the issue during my next performance review.
I told her that if something didn’t happen soon, I wasn’t going to be there for my next performance review. Nothing happened so I found a new job in another city, sold my house, and moved on.
If I had been in a relationship at the time, I don’t think I would have been able to react as fast. Being single meant being flexible.
Second, we can live on less than we make so we can save for retirement, without worrying about the spending needs of our partner.
How? We can get a roommate or move to someplace less expensive, reduce our transit costs, eat at home, and eliminate other unnecessary drains on our income (you can find more ideas here: My Favorite Tips to Save Money).
While far from perfect, I have saved roughly 10% or more toward retirement since I was 28. Yes, I took on debt for things like my car and for going to law school, both of which ultimately prevented me from saving even more. But paying my future self was part of my plan from an early age and it has paid off: my net worth is in the six figures because I have been investing steadily.
Our Investment Strategy Can Reflect Our Needs
In addition to being in control of our income and our spending, another thing working in our favor is that we can design an investment strategy that reflects our needs.
Although it is unclear if it is by choice or as a result of needing the income, more women are working into their 60s and 70s than ever before. According to the National Institute for Retirement Security, from 2000 to 2015, the percent of women ages 55 to 64 participating in the workforce increased from 53.2% to 59.2%. The percent of working women 65 years of age and older has also increased—from 17% in 1990 to 27% in 2010.
If we don’t plan on tapping our retirement savings until later, our portfolios can likely tolerate a riskier mix of investments. Whatever you decide to do has to be something you are comfortable with, of course, but for my part, I find the suggested amount I should have in bonds right now based on my age way too conservative.
I expect to work for at least another 12-15 years and to live another 40-45 years. Given this time frame, it is almost riskier not to have most of my portfolio invested in the stock market.
Our Money Stays Where We Put It
A few years ago, I had what turned out to be a very illuminating (and hilarious) exchange with one of my married friends.
I am not sure what exactly I said—I think it was something about having forgotten my sunglasses but knowing exactly where they were in my condo—but her response was priceless. She let out a big sigh and said that it must be nice to put something down and it still be there when you go back for it.
You know what—it is nice.
With regards to our money, it means we can stay on top of our checking accounts and avoid fees, and that the only charges on our credit cards are the ones we make. And that when we decide on an investment strategy, we don’t have to worry about someone going in behind us and changing it. Our money stays where we put it.
We [Haven’t] Come a Long Way, Baby…Yet
We can’t ignore single women aren’t saving enough for retirement: the results of a Retirement Confidence Survey I read were pretty grim.
- 40% of unmarried women reported having less than $1,000 saved for retirement compared to 34% of unmarried men and 22% of married women.
- Only 19% report being very confident that they will have enough money to live comfortably in retirement compared to 31% of unmarried men and 28% of married women.
But the fact that we haven’t saved and lack confidence doesn’t mean we can’t turn things around. We can start saving TODAY and educate ourselves so we have confidence that we know what we are doing.
We are in control of our income, our spending and saving rate, and our investment strategy. We’ve got this.
How Has Being Single Worked in Your Favor?
Are you a single woman? What does your retirement strategy look like?
[Not convinced? Check out Being Single is a Liability When Saving for Retirement for three excuses I relied on to not save enough in my 20s and 30s (and why they don’t stand up to scrutiny)]