Love Connection: How Single Status Affects 401k Savers

Finances more of a concern for those who go it alone

401k savers, financial security, LIMRA, retirement savingsBeing alone hurts in unexpected places.

One is not just the loneliest number—it’s apparently also the least confident when it comes to financial security.

Single retirees are more worried about being able to afford the retirement lifestyle they desire than their married counterparts, new research shows. They’re concerned about outliving 401k or other retirement savings, too.

According to LIMRA Secure Retirement Institute (LIMRA SRI), just 64 percent of single retirees are confident in their ability to maintain a favorable lifestyle during retirement. But 71 percent of retirees who are married or have a partner report feeling confident.

When asked about their financial outlook should they live to be 90, 40 percent of single retirees fear their savings will fall short. Single women think they’re in even more trouble: almost half believe they will run out of money before turning 90.

“Because essential living expenses are proportionally higher for single-person households than couples’ expenses, the risk of running out of money is greater for all single people as they age,” Jafor Iqbal, assistant vice president of LIMRA Secure Retirement Institute, said in a statement. “Today, there are 47.5 million single Americans who are age 65 or older—a third of them live alone and are solely responsible for their own retirement security.”

On a brighter note, the survey finds some of this fear is mitigated when single retirees seek advice from a pro—a logical outcome considering singles with financial advisors are four times more likely to have a retirement income plan in place.

Around 75 percent of single retirees with a financial advisor believe they can obtain the retirement lifestyle they want. And, “[f]or single retired women, working with an advisor significantly improves their confidence that their savings will last if they live to be 90—38 percent higher than those who don’t work with an advisor.”

Yet, unmarried retirees are not as apt to work with advisors as those who are coupled up. Only three in 10 men and four in 10 women who aren’t married have an advisor, while 47 percent of married households do.

“Our findings present an opportunity for advisors,” said Iqbal. “We know that formal retirement income planning is linked with improved financial outcomes. Yet two-thirds of single retirees who work with an advisor do not have a formal retirement plan. We recommend advisors engage their clients—married or single—and begin the process of developing a formal retirement income plan.”

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