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Single and Loving It: Financial readiness for singles planning for retirement

So much of the financial advice and resources out there is focused on married couples.

Single and Loving It: Financial readiness for singles planning for retirement

Unfortunately, the disparity in information for those seeking financial advice as single people is doing a great disservice to the middle-aged single community. Retirement saving advice, financial planning, and investment strategy can sometimes be different for those who are single versus their married counterparts. Since 1990, divorce rates have doubled for those 50 and above.[i] That means there will be many more adults entering retirement single or divorced and this article will go over some specific tips for you.

Workplace Compensations

Married couples, especially if both are working, will be building a portfolio with potentially two income streams instead of one. If you are building your wealth on your own, be proactive in evaluating your compensation structures at work and make the best choices for you and your unique situation. Of course, the first step is to max out any workplace employer-match 401(k) programs offered. As workplace compensation can become quite complex regarding benefit packages, stock options, deferred compensations, etc. It will behoove the single investor to seek out expert advice on the best course of action. An experienced financial planner can look over your portfolio and your compensation options and create a personalized plan that will help to maximize your returns and savings, manage risk, and minimize your tax payout. I’ve been in the workplace and know first-hand how complicated and confusing compensation plans can be.

Planning Long-Term

A good financial plan for retirement for everyone, but especially for a single person, is planning far ahead into the future. While the majority of people plan to age in place in their homes, 70% of those people end up in long-term nursing care at some point or another.[ii] Health care costs and long-term care can be quite expensive, with the average annual cost over $50,000.[iii] Having a game plan in mind for how you would make that transition and pay for it long in advance can save a lot of headaches down the line. As women tend to live longer and need more medical care down the line, this is especially important for them. A financial advisor with retirement planning as their specialty will be able to help navigate how best to prepare. In addition, making conscious choices about where you will retire, factoring in the accessibility and safety of your home, your access to transportation in the event that you are unable to drive, and the types of services offered in your area is vitally important. Isolation and inactivity in later life contribute to poor health, so making sure you will have access to friends, family, hobbies, and interests is as important to a good retirement.

Planning Your Estate

It is as important for single people, or those without children, to manage their estate. In addition to having an outline for the execution of your estate, it is important to have a living will and a medical power of attorney in the event you are unable to communicate your wishes regarding medical care and attention. A married person's spouse tends to be this person unless they specifically request otherwise. In the case of a single person, it is of vital importance that the person you entrust to handle your medical and financial decisions in case you aren't able to is someone who is reliable and trustworthy. Having a current will is also important, as, without one, the state would decide the order of inheritance. Sadly, only 50% of adults have a will.[iv] Taking the time to create a will, name your beneficiaries, charities, etc. will leave out a lot of guessing and make sure that your estate is handled on your terms. Planning out your funerary wishes and making the arrangements will ensure that it is handled as you see fit.

Assemble a Trusted Team

You have probably noticed a theme throughout this article, to seek out expert help. Like anything in life, there are challenges and we can’t know everything or see into the future. For many folks, the built-in social safety net of a spouse or kids, keep people from being proactive in their retirement and estate planning. For a single person, where the power of attorney is not immediately clear, or who may not have an advocate who says where or when they are moved into long-term care, having a team of trusted professionals can make a world of difference. Having your money managed, your estate planned, your power of attorneys named and your funerary arrangements clear, can be a real weight off your shoulders. The goal is to be prepared for any eventuality so you don't have to worry about it. Knowing that a trusted team of professionals with your best interests in mind can leave you space to feel secure and enjoy your retirement as a single person.


[i] https://www.usatoday.com/story/opinion/voices/2018/09/06/gray-divorce-elderly-couples-marriage-column/1183820002/

[ii] https://www.fool.com/retirement/2017/02/06/70-of-older-americans-could-face-this-colossal-exp.aspx

[iii] https://assets.aarp.org/external_sites/caregiving/options/nursing_home_costs.html

[iv] https://www.nytimes.com/2017/03/10/business/retirement/how-do-i-make-a-will.html

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