Recently I read the business section of my hometown newspaper. Under the heading of “Living/Advice”, the headline was the following – “Retirement Roommates”. This bears to ask the question – If you’re not married, would you want or would you possibly need to have a roommate in retirement?
When we discuss retirement with couples seldom does the D-word come up, unless we bring it up. The D-word is death. While working and planning it’s simply assumed retirement is something that people experience hand-in-hand. It’s assumed there will be enough money for both to enjoy their lives together far into the future.
Unfortunately, far-into-the-future is an uncertainty; but according to the Social Security Administration, if you’ve lasted until the age of sixty-five, men can expect to see a little over fifteen more years and women almost twenty more years. This is where the conversation of “can two live as cheaply as one” begins.
I think not and here’s why.
When you lose a spouse, your real estate taxes aren’t cut in half; nor is your electric bill, cable or internet. Yes, you might only have one car instead of two; but, most of the time you were traveling together anyway. Your water bill is probably the same, so is your homeowner’s insurance and on and on. There’s no price reduction due to a death.
Here's the other bad part most people forget to plan for. When one of you dies, so does one of your social security benefit payments. Yes, you might be able to keep the larger of the two; but you only get one, not the two. If there’s a pension, that might be cut down by a quarter, or a third, or a half depending of the settlement you took when both of you were alive.
That’s why this retirement roommates article got my attention. Because the very first sentence of this story stays the following: “Being home alone is a retirement reality for many. According to government data, more than three in ten women and two in ten men at the age of sixty-five are living alone.” I know that you’re planning a long life together; but what happens if that doesn’t happen. What’s your plan B – A roommate to help pay the bills?
