Retirement and Financial Planning is Doubly Important for Singles
An increasing number of women and men are entering the retirement phase of their lives as singles. Putting a financial and estate plan into place is just as important as for couples, even if there are no heirs.
It seems like every article about financial planning and retirement concerns couples, but many people today are planning for retirement as singles, which presents its own challenges. A recent article in twincities.com, “Your Money: Financial planning tips to help singles,” provides some useful pointers for how singles can prepare to take good care of themselves in planning for an independent and enjoyable retirement.
- Rainy Day Funds. For singles with just one income, having a robust emergency fund is much more critical than for couples. When you’re married and you’re laid off from your job, you hopefully have the option to dip into your partner’s income stream to help you in what might be a tough financial situation.
The rule of thumb is for individuals to save up about three-to-six months of living expenses in a safe, liquid account. For singles, it should be a little more: six-to-nine months of living expenses in an emergency fund. That will help to ensure that you have plenty of cushion, if a financial storm happens.
- Long-Term Care. You should also try to better protect your independence in retirement with a plan for long-term care (LTC). This usually means buying a LTC insurance policy. It can also mean self-insuring, if you have the financial resources to do so. A LTC insurance policy will help you maintain your independence by potentially allowing you to stay in your own home, in the event you need senior care in the future.
- Life Insurance. If you’re single with no dependents, you may think there’s no use owning a life insurance policy. In some instances, that may be the case. However, just because you’re single doesn’t necessarily mean there’s no need for you to own life insurance. The death benefit of a policy can be used to provide a legacy to a charity, help cover your funeral expenses or defray the fees and taxes that may come up when your estate is settled. If you buy permanent life insurance, the cash benefits from the policy can act as an additional income source, if you need it while you’re still alive.
- Estate Planning. Whether you have children or not, estate planning is vital for singles, perhaps more so than couples. You’ll want to have a power of attorney and a living will, so that you can appoint a personal representative if you should become incapacitated. You’ll want an estate plan so that any assets you have, regardless of their size, will be distributed according to your own wishes.
Reference: Twincities.com (July 1, 2017) “Your Money: Financial planning tips to help singles”