
Take a look at nearly any retirement guide, and there'll
be a section on what to do with your spouse's income and savings. If you don't
have a spouse, there are several benefits you won't have: spousal Social
Security benefits, life insurance payouts and equity, and preferential tax
treatment for married couples. It can seem like the deck is stacked against
you.
Regardless
of why you find yourself planning for a single retirement, whether it's death,
divorce or just not meeting the right person, you're not alone. According to
the US census, 54% of men and 27% of women over age 65 are single. They'll face
a much more difficult retirement landscape than their married counterparts.
That
doesn't mean you need to find the first available partner to get hitched,
though. There are many strategies that are easier for single people to execute
than their married counterparts. Here are three steps you can take to make your
retirement years safe and secure.
1.)
Start saving now
One
area where single people lag behind married couples is in retirement savings.
More than 40% of unmarried women and 34% of unmarried men have saved less than
$1,000 for retirement. There may be any number of reasons for this, but the
bottom line remains the same: Start saving more.
It may
be helpful to start small. Try a dollar-a-day saving challenge by saving one
dollar every day for 30 days. Use that money to start or add to a
tax-advantaged retirement account like an IRA. After 30 days, one dollar every
day will start to feel like a habit and it'll be easier to add more to it.
Beyond
putting more money away, single retirement may require a more cautious
retirement plan. You may need to work longer to achieve the same level of
security in retirement. For most people, the years they work just prior to
retirement are their peak earning years. A few more years at your max salary
(and max savings rate) can add up quickly!
2.)
Choose your accounts wisely
There
are a few common retirement situations that put single people at greater risk.
These risks mean that you'll want to prepare a little differently than married
couples. Most notably, single people have less support and flexibility if they
start outliving their savings. For married couples, the larger pool of assets
and supplemental income streams help to keep this from being a serious worry.
Singles don't have access to these benefits, so they need to be more careful in
their selection of retirement vehicles. Looking to guaranteed sources of
income, such as lifetime annuities and defined benefit plans, can help
alleviate these concerns. While these investments may have a place in every
portfolio, the additional security they provide to single people makes them
especially useful.
Also,
major medical problems pose a more significant challenge. Instead of having to
depend on a partner to take care of you if you require long-term care, you may
need professional assistance. This might come in the form of either in-home
care or a residential facility. Long-term care insurance, though expensive, can
be an excellent way to protect yourself against these costs. Similarly, keeping
a robust Health Savings Account (HSA) can help save on taxes now and pay for
medical expenses later.
3.)
Take advantage of the opportunities
While
being single in retirement does pose a number of challenges, it also opens up a
number of exciting opportunities. For example, there's no reason why your
retirement years have to be in the same community where you worked. You can
take advantage of your new lifestyle to move to a place with a lower cost of
living, thus extending your retirement savings.
There
are also many bridges to retirement that are available to singles that may not
be as desirable for married couples. Starting a small business using your
workforce skills can put you in a position to maximize your tax benefits while
also bolstering your income over those early retirement years. Whether it's in
consulting, freelancing, or something unrelated to your career, you can put
your skills to work pursuing your passions.
Since
there's no guaranteed inheritance outside a marriage, your estate planning has
many more options. You don't have a partner depending on your assets when
you're gone, so you can dedicate your remaining savings to a cause that's
important to you. You'll want to set up an estate plan that reflects your
values and commitments, and you have the opportunity to do just that.
If
you're ready to take the next step in your retirement planning, you owe it to
yourself to see what benefits are available to credit union members. Call,
click, or stop by Destinations Credit Union today!
YOUR
TURN: What are you most looking
forward to in retirement? How do you plan to make that dream a reality? If
you've already retired, what tips do you have for the next generation?
SOURCES:
http://www.cnbc.com/2016/03/18/women-more-likely-than-men-to-retire-poor.html
http://www.wsj.com/articles/retirement-planning-tips-for-singles-1412540047
http://www.thefiscaltimes.com/2016/07/22/Single-Lady-s-Guide-Retirement-Planning
http://retirementrevised.com/retirement-planning-for-singles-three-must-do-items/2/
http://www.cnbc.com/2016/03/18/women-more-likely-than-men-to-retire-poor.html
http://www.wsj.com/articles/retirement-planning-tips-for-singles-1412540047
http://www.thefiscaltimes.com/2016/07/22/Single-Lady-s-Guide-Retirement-Planning
http://retirementrevised.com/retirement-planning-for-singles-three-must-do-items/2/
No comments:
Post a Comment