5 retirement planning must-dos for single people

July 16, 2021

Allworth Co-CEO Scott Hanson shares the important financial steps that anyone living the single life needs to take.

Are you over 50 and single?

Single and over 50 is one of the fastest growing demographics.

That’s because more than 30 percent of people between the ages of 50 and 64 are currently single, and almost 40 percent of people over the age of 65 are now unmarried. (These numbers are double what they were 40 years ago.) ¹

Obviously, preparing for retirement as a single person is quite different than it is for a married couple.

What follows are 5 key retirement planning considerations for singles.

1. Save for retirement emergencies

One thing that financially messes up your retirement is when you must liquidate investments because you have an emergency (it could be financial, but it could also be health related) and no easy-to-access savings.

If you find yourself in an emergency and you have to liquidate a chunk of a tax-deferred retirement account, you face the possibility of early withdrawal penalties and, at the very least, you’re going to have to pay taxes and you’ll miss out on the compound interest.

Single people are single earners and therefore less likely to have a safety net.

Everyone’s needs and expenses are unique, so, depending on your situation, if you don’t have roughly six-months’ worth of emergency savings, you need to speak with your advisor to calculate the best options for setting that money aside.

2. Whether you’re divorced, widowed, or you were never married, become a Social Security expert

Possible legislative changes. Your full retirement age versus waiting a few years so your yearly benefit increases by four percent (per year). The fact that there are 81 different filing strategies for couples. (Meanwhile, single people have just nine different Social Security filing options.)

I write about Social Security quite often, and our workshops on the topic are among our most well-attended.

For instance, lots of divorced people don’t understand that if you were married for at least 10 years, depending on your own work history, you could be eligible to receive benefits based on your ex-spouse’s work record (and it not only doesn’t impact them, they will never even know).

When it comes to filing for Social Security, there are a lot of things to consider. That means that if you’re single, and therefore responsible for financing 100 percent of your retirement, you can’t afford to make a mistake by filing at the wrong time.

3. Work with your advisor to evaluate your long-term insurance care options

While it’s true that long-term care (LTC) insurance is expensive, for some people, it’s a good investment.

That’s because the Department of Health and Human Services finds that about 70 percent of people turning age 65 today will need some type of long-term care services (either in-home or in a facility).

As with so many financial decisions related to retirement, the answer to whether you need a long-term care policy is, “It depends.” For instance, if you have sufficient retirement savings, you may be able to self-insure, which means paying for the long-term care costs out-of-pocket.

One of the big issues to consider is that single people are less likely to have someone to assist them at home. Also, remember, the costs of premiums are usually lower the younger you are, so whether you need LTC insurance or not, it’s better to investigate it sooner rather than later.

4. Get your estate plan and medical and financial power of attorneys dialed in now

There are a lot of reasons that single people who’ve saved well need to get their estate plan dialed in, but don’t neglect your retirement account beneficiaries and financial and medical power of attorneys.

As far as beneficiaries go, the listed beneficiaries on your retirement accounts (401(k)) supersede those in a will, so start there. If you were married, you may still have someone listed as your beneficiary that is no longer in your life. As for medical power of attorneys, if you enter the hospital and can’t fend for yourself, who is listed as your decision maker?

These are key questions that need an answer, so don’t wait.

5. Build a team, including a vast social network

The curmudgeon who lived down the street was a standard character in movies and sit-coms throughout the 60s and 70s. (His yard was always perfect.)

But the thing is, being a lonely curmudgeon is a drag. That’s because, sooner or later, virtually everyone needs some help.

Sit down and make a list of the people you could rely on to drive you to an appointment if you needed a ride. (Don’t be a shy curmudgeon, either. Lots of people would love to help.)

And if after 10 minutes of trying, you find your list of reliable friends is looking a little… sparse?

Spring into action. I think you’ll find that, if you make yourself available, friendships will make themselves available to you.

If you are fortunate enough to live a long, independent life, in a home of your choosing, that’s great!

But it’s never too early (nor too late) to build a vast support team and social network.

And besides, studies have shown that people who have strong social bonds live longer, healthier lives.

If you’re single and your friendship tree is looking a little barren, I implore you to sprout some new branches: You’ll be glad you did.

^{1 https://www.principal.com/individuals/build-your-knowledge/single-and-over-50-heres-how-prepare-retirement}

Advisory services offered through Allworth Financial, a Registered Investment Advisor | Disclosures | Privacy Policy

Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Check the background of this firm on FINRA's BrokerCheck.

HMRN Insurance Agency, LLC license #0D34087

¹Barron’s 2024 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking of independent advisory companies is based on assets managed by the firms, growth, technology spending, succession planning, and other metrics.

² Retention Rate Source: Allworth Internal Data, FY 2022

³ The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.

⁴ As of 7/1/2024, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $22.5 billion in total assets under management and administration.

⁵ InvestmentNews 2020 and 2021 Best Places to Work for Financial Advisers. The ranking reflects survey responses and scores completed by both employers and employees. Employers report their organization’s workplace policies, practices, and demographics. Employees complete a survey designed to measure the employee experience.

⁶ 2021 Value of an Advisor Study / Russel Investments

⁷ Ranked 9th Top Wealth Managers By Growth in Assets in the U.S. from RIA Channel, 2022. RIA Database and RIA Channel are registered trademarks owned by Labworks, LLC.

⁸USA Today Best Financial Advisory Firms 2024. The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.

⁹NBRI Best in Class Ethics 2023. The Best in Class level is bestowed upon clients performing at or above 90 percentile of the NBRI ClearPath Benchmarking Database.

^✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.

^✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.

^†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.