How To Save for Retirement as a Single-Income Earner

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Planning for retirement is challenging for everyone, but it can be especially difficult for single individuals. Single-income earners need to prepare financially without the decision-making and income support of a spouse or partner. How can they get ahead of retirement and long-term financial planning

If you’re planning on retiring single, take these steps to ensure you are able to positively position yourself for retirement.

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Create a Financial Fallback Plan

Single-income earners may discover there’s a gap between what they think they need for retirement and what is actually required. Scott Pedvis, financial advisor with Wells Fargo Advisors, recommends singles create a financial fallback plan.

“A financial backup plan can involve a higher cash emergency savings and more robust disability and long-term care insurance protection than couples might select,” Pedvis said.

Without a second income, Paul Tyler, chief marketing officer at Nassau Financial Group, said a single person really has only one retirement saving lever to pull which is clearly labeled “expenses.” Singles may adjust their everyday lifestyle to help keep expenses low and embrace the habit of being intentional when it comes to making changes in financial planning. 

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“A single person doesn’t have a partner to help think through the tough questions, including how to care for elderly parents, pay for healthcare if employment ends earlier than planned and covering inevitable long-term care costs,” Tyler said. “The decision process may be simpler with only one voice in the conversation. However, you need to prompt the dialogue yourself.”

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Build a Network of Professional Advisors

While a single individual may prompt financial planning dialogue on their own, they do not necessarily need to go about every aspect of retirement alone. 

If you need advice about important financial matters, don’t be afraid to reach out for guidance and support. Pedvis said singles retiring can build a trusted network of professional advisors. Among these members include a financial advisor, accountant, attorney and healthcare providers to be allies in their corner.

What about the role of family and friends in your network? Pedvis said it’s great to have strong relationships with friends and family to help you in times of need. However, single individuals need to make sure neither friends nor family members take advantage of their independent status or create serious financial burdens for you. 

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Take extreme care before turning over your financial matters and decisions to anyone else, whether they are a loved one or a professional. Pedvis recommends single individuals stay actively involved in these decisions and work alongside people they trust to make decisions in their best interests. In the event you should become incapacitated, consider evaluating the possibility of engaging a corporate trustee to manage your finances.

Get Estate and Wealth-Transfer Plans in Place

Don’t delay when it comes to estate planning. Gather together the following key documents to form the foundation of an estate plan.

  • Will
  • Power of attorney (POA) for financial matters
  • Durable power of attorney for healthcare
  • Health Insurance Portability and Accountability Act (HIPAA) release authorization
  • Living will
  • Revocable living trust

“Carefully designate beneficiaries of assets in IRAs, employer-sponsored retirement plans, insurance policies and annuities,” Pedvis said. “Lay out clear directions for the distribution of remaining assets for your heirs and don’t forget about your digital assets and accounts.”

Plan for Change

Someone who plans to retire single may still experience life changes before their retirement date. 

There’s still time for singles to enter into committed relationships or get married. If any of these life events happen, Pedvis said to make adjustments accordingly in your financial plan and plan for change.

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About the Author

Heather Taylor is a senior finance writer for GOBankingRates. She is also the head writer and brand mascot enthusiast for PopIcon, Advertising Week’s blog dedicated to brand mascots. She has been published on HelloGiggles, Business Insider, The Story Exchange, Brit + Co, Thrive Global, and more media outlets. 

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