Single Female Retirees Worry the Most About Longevity Risk

Single retirees, particularly single women retirees, are more concerned about outliving their savings, according to research by the LIMRA Secure Retirement Institute (LIMRA SRI).

While 71% of married retirees are confident they will be able to live the lifestyle they want in retirement, this is only true for 64% of single retirees. Additionally, 40% of single retirees overall do not think they  have enough savings to last them until age 90, and 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.

“It is clear that annuity ownership dramatically improves single retirees’ confidence in their financial security,” Iqbal adds. “Our study demonstrates that single retirees who have a relationship with an adviser are significantly more likely to own an annuity. Six in 10 single women who work with an adviser own an annuity and nearly half of men working with an adviser own an annuity—at least double the rate of single retirees who don’t work with an adviser.”

Forty percent of single retired women work with an adviser, whereas only 30% of single retired men do so. By comparison, 47% of households with married couples work with an adviser. Seventy-five percent of single male and female retirees who work with an adviser believe they will be able to achieve the type of lifestyle they desire in retirement, whereas only 66% of single male retirees and 54% of single female retirees who do not work with an adviser say the same.

Thirty percent of single retirees who work with an adviser have a formal retirement income plan. “Our findings present an opportunity for advisers,” Iqbal says. “We recommend advisers engage their clients—married or single—and begin the process of developing a formal retirement plan.”

LIMRA Secure Retirement Institute’s findings are based on a survey of 1,130 households with single men and/or women between the ages of 55 and 79 who have been retired for at least one year and have household incomes of at least $35,000.