The Downside of Being a Single Retiree -- and How to Beat It

There are certainly advantages to being single. You get to live life on your own terms, and you can use your financial resources to cater to your own needs rather than having to also think about a partner's.

But there's a big downside to being single -- having no one to split the bills with. If it costs $2,000 a month to rent the average apartment in your area, as a member of a couple, you might have another earner to share that tab with. When you're single, every bill of yours is one you have to cover alone.

That could be extremely challenging in retirement, though. Many seniors find that they're forced to live on a lot less money in retirement due to the absence of a paycheck from work. While it's one thing to tackle your bills alone on, say, an $80,000 annual salary, if your annual income shrinks to $40,000 in retirement, you may have a real challenge on your hands.

The good news, though, is that there are steps you can take to attain more financial security as a single retiree. Here are some to look at.

1. Boost your savings, especially as retirement nears

Being single at, say, age 35 or 42 doesn't automatically mean you'll be single in retirement (unless you're someone who knows you're just plain not interested in coupling up). But if, by, say, age 55, you're still single and are used to that lifestyle, you may be inclined to remain single as a retiree. If so, push yourself to save more during the tail end of your career so you have a larger financial cushion to fall back on.

Once you turn 50, you can contribute an extra $1,000 annually to an IRA and an extra $7,500 to a 401(k) on top of the regular limits set by the IRS. So let's say that by age 55, you have a $300,000 IRA.

The contribution limit this year for people under 50 is $7,000, but you have the option to contribute $8,000. If you do so through age 65, and your IRA generates an average annual 7% return during that time (which is a bit below the stock market's long-term average but accounts for a shift toward more conservative investments as retirement nears), you'll end up with $700,000.

2. Look at relocating to a less expensive area

During your working years, you might need to live in a city with higher rent prices to give yourself access to a more robust paycheck. Once you retire and stop working, you don't need to worry about proximity to jobs. It could pay to research options for relocating. If you find an area with a lower overall cost of living, you might manage to stretch your savings more.

Now, you may be inclined to retire in a state with no income tax. Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming don't have a state income tax. New Hampshire doesn't tax income, but it does tax interest and dividend income, which you may need to live off of to some degree in retirement, so that may not be the best option for you.

Of course, some of the states on the no income tax list may not be optimal for retirement. Alaska can be quite an expensive place to live despite not having an income tax, and you might struggle with the weather. The point, however, is to research your options and see if moving somewhere else helps stretch your senior income.

3. Be strategic in claiming Social Security

If you work and pay into Social Security all your life, you should be in line for retirement benefits. When you're part of a couple, you get to enjoy having two sets of benefits coming in. When you're single, there's only one monthly benefit coming in.

However, you can boost that benefit of yours by delaying your Social Security claim until age 70. If you were born in 1960 or later, you'll be entitled to your full monthly benefit at age 67. But you get an 8% boost for each year you hold off, up until age 70. Growing that benefit by 24% could help you better manage your expenses as a single retiree.

It's not easy being single in retirement from a financial standpoint. But on the plus side, being single could work to your advantage in other ways. You can travel to the places you've always wanted to without being held back, and you can spend your money in a way that optimizes your quality of life. And if you follow the tips above, you may find that you end up faring quite well and avoiding money problems once your career wraps up.