Planning and steps to consider for singles
February 24, 2017 -
As longevity continues to stretch, so does the look of retirement. As a result, many of us face a longer and more active retirement on the horizon. However, there is a strong likelihood that you may find yourself single at some point during retirement. The 2014 Census Current Population Survey illustrates that nearly 70% of individuals age 65 or over have either never married, or are divorced or widowed. Single individuals face additional challenges compared to their married peers. While planning advice tends to focus on married couples, what about retired singles? Here are some suggestions on retirement:
Have a Vision
What would you like to achieve in retirement? The focus of any retiree, whether single or part of a couple, should be on the amount of retirement income needed each month. As a retired single, you may want to travel, become involved in volunteer work, or start your own business. Consider your vision for retirement when you are planning as it will drive how much you will need to save.
Revisit Your Income Sources
Calculate your retirement income potential based on individual savings. Next, add any inherited retirement funds (widowers), Social Security claiming strategies (divorcees should remember that if they were married for at least 10 years and have not re-married, they may be eligible to claim their former spouse’s benefit), and any other income sources such as pensions or existing annuity payout plans. If you have not yet retired, reassessing these sources will inform the decision to continue, or even boost, savings in employer-sponsored retirement plans or deferred annuities as means to generate steady income throughout your retirement.
Evaluate Your Estate Plan
You have an estate plan—whether you have created it yourself or not—because if you die without a will, state law will determine how your assets will be distributed. In the absence of a will, state law will also determine who manages your assets if you become unable to handle your own financial affairs. If you are single, consider your geography and any trusted family members, close friends, or an attorney to act as your health care directive to assume powers of attorney for your finances and healthcare. Also, be sure to consider the tax implications to non-spousal beneficiaries to whom you wish to distribute your estate. By consulting with a qualified estate planning attorney, you can ensure that your wishes are clearly defined in the appropriate documents. In addition, you should consider disability and/or long-term care insurance as a means to bridge shortfalls in income and retirement savings that could arise if you become ill and need assistance performing day-to-day tasks. Bear in mind that these options should be considered while you are healthy; if you wait too long, you may not qualify for the necessary gap insurance.
Review Your Portfolio
As you get closer to retirement, or find you are ready to begin your retirement distribution plan, your asset allocation may prove too aggressive or conservative for your goals. A Wintrust Wealth Management Financial Advisor can help you assess everything from your portfolio allocation to your individual goals. By utilizing tools like Envision® your advisor can evaluate your current financial picture and put you on the path to living your best life possible in retirement.