Single Retirees Have Different Advice Needs

A new cut of survey data shared by the LIMRA Secure Retirement Institute (SRI) shows there are 7.6 million single pre-retiree and retiree households in the U.S. with assets of $100,000 or more.

LIMRA SRI defines this demographic group as non-married individuals age 55 and older. In total, the single pre-retiree and retiree market offers a $6 trillion opportunity for advisers and asset managers.

According to LIMRA SRI, this group wants more access to financial advice and education, particularly as it pertains to achieving retirement income security.

“Advisers should cater to this opportunity differently, as single retirees face their own set of unique set of challenges,” LIMRA SRI researchers say. “These challenges require special attention in retirement planning as their investment preferences and goals may alter based on their situations.”

The data shows retirees feel less confident than married retirees. Less than two-thirds of single retirees are confident that they can “live the lifestyle they want in retirement,” compared with 71% of married individuals in this age/asset range.

First and foremost, running out of savings in a long retirement is a major concern, according to the LIMRA SRI data. Four in ten single retirees believe their savings won’t last if they live to age 90, while just over one-third of married or partnered retirees feel the same way. Further, only a little more than half (57%) of single retirees feel their retirement lifestyle is how they pictured it, compared with nearly seven in 10 married retirees.

“Advisers must develop a plan to approach and reach the single pre-retiree and retiree market,” LIMRA SRI researchers recommend. “Only 38% of single retiree households work with an adviser, but they have a unique set of needs, expectations and desires in their retirement years. Guidance from an experienced adviser can help them be more confident, properly prepared and more able to live their desired lifestyle.”

Single women near and in retirement report more financial stress

Data previously shared by LIMRA SRI shows single women retirees are most concerned about outliving their savings. Nearly half of single women are not confident their savings will last through age 90.

“We have long known that longevity risk is greater for women,” says Jafor Iqbal, assistant vice president at the LIMRA Secure Retirement Institute. “Because essential living expenses are proportionately higher for single-person households than couples’ expenses, the risk of running out of money is greater for all single people as they age. Today, there are 47.5 million single Americans who are age 65 or older.”

Thirty percent of female retirees say their basic living expenses are higher than they had anticipated, but only 20% of men say the same. Single women spend 68% of their income on basic and health care expenses in retirement, compared to 62% of single men. However, single women spend only 15% on discretionary expenses in retirement, whereas single men spend 20% on discretionary expenses in retirement.

Among female retirees who have purchased an annuity, 71% say they will be able to live the lifestyle they want in retirement, whereas only 56% of female retirees who do not own an annuity say the same; for men, the percentage in both cases is the same, at 68%. Asked if they believe their savings will not run out if they should live to age 90, 67% of female retirees who own an annuity say no, whereas only 47% of female retirees who do not own an annuity say no; for men, the percentages are 74% and 68%, respectively.