Retirement planning is hard enough when you are married; imagine what it’s like for a single individual. The single individual could be widowed, divorced or may have never married. These individuals face many challenges as they head into retirement. It is important to be aware of what some of those issues are and to work with your advisors to make sure that you have a plan in place for the future.
Factors that a Single, Unmarried Individual Faces During Retirement that Married Couples Don't Face:
- Expenses. For the most part, single people have expenses that are just as high as those of married couples. They still need a car for transportation and a place to live. These expenses can add up and can be more than half of what a married couple may spend on a car and a place to live. It is important that single individuals keep their expenses within their budget.
- Savings. Savings is another area where single people have a disadvantage. Many times, especially now that most married couples are both working, they are able to save more into their retirement accounts than that of an individual. Single people need to make sure they save a greater amount to their tax-deferred accounts and start early. They also need to build a larger emergency savings account than that of a two-person income household. They do not have anyone else to lean on should they lose their job, or have an extended illness.
- Retirement Income. Income in retirement is limited to their savings and to their Social Security. As a single person, you may not have as many options when it comes to Social Security. However, widowed and divorced individuals may have a few more options than individuals who have never been married. The individual who has never been married can only receive benefits on their income record; this means more planning on when to retire and when to start taking Social Security benefits.
- Long-term Care. Another area where the single individual needs to plan is for long-term care. There may not be anyone who can take care of you, and you may need to enter a nursing home or have someone come into your home to care for you. This can quickly deplete assets that have been saved for retirement.
- Estate Planning. Make sure you have a will. This is important, since most, if not all, of your assets will be in your name alone. Who should receive your property or assets? Making sure you have the proper estate documents in place is very important. Also, be certain that beneficiaries are all up to date.
Although the planning topics are the same whether you are married or not, planning for the individual may require additional attention to topics such as budgeting and saving for his or her retirement. As an individual, you should consult your financial advisor to make sure you are on the right path to a successful future.
Contact us with questions regarding retirement planning for both married couples and single individuals and visit the Schneider Downs Wealth Management Advisors page to view a full suite of the services that we offer.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as investment, tax or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.