Planning on retiring single? You aren’t alone. Nearly 22 million Americans age 65 and older were unmarried in 2019, according to the U.S. Census Bureau, representing 41.5% of those in that age category. And for women, it’s more likely to be the case. According to the Administration on Aging, 54% of older women are unmarried, as compared to 30% of older men.
“Retirement planning can be especially challenging for singles, who need to prepare without the decision-making and income support of a partner,” says Scott Pedvis, financial advisor, Wells Fargo Advisors.
For those setting a course for solo retirement, Wells Fargo Advisors offers these five tips:
1. Create a fallback plan. Retirees commonly discover a gap between what they thought they’d need for retirement and what’s actually needed. And if you’re single, you may not have a second income stream to rely on should finances become unexpectedly disrupted. Periodically review your investment portfolio and build backup plans. Such contingency planning could involve more emergency savings and more robust disability and long-term care insurance protection than couples. You could also choose to take a part-time job for extra income.
2. Build a network of advisors. With autonomy sometimes comes a reluctance to seek advice. Consider forming a team of trusted professionals, including a financial advisor, accountant, attorney and healthcare providers.
3. Count on loved ones—to a point. Friends and family can be a lifeline in good times and times of need. However, ensuring they don’t take advantage of your independent status or create serious financial burdens for you is essential. For example, you should take extreme care before turning over financial matters to others. Stay actively involved and work with a trusted team to help make decisions in your best interests. Evaluate the possibility of engaging a corporate trustee to manage finances, should you become incapacitated.
4. Prepare key documents. According to Caring.com, more than half of American adults don’t have estate planning documents such as a will or trust. Don’t wait. Even if you’ve put some documents together, they may not ensure your wishes are carried out. Here are the key documents forming the foundation for most estate plans: Will; Power of attorney (POA) for financial matters; Durable power of attorney for health care; Health Insurance Portability and Accountability Act (HIPAA) release authorization; Living will; Revocable living trust
To prevent confusion and misdirected bequests, carefully designate beneficiaries of IRAs, employer-sponsored retirement plans, insurance policies and annuities. Lay out clear directions for the distribution of remaining assets. Also, don’t forget about digital assets and accounts. Will your executor or trustee have proper authority to access and manage those items? Talk to your attorney about keeping digital planning secure and up-to-date.
5. Plan for change. Entering into a committed relationship could mean making adjustments. Look at your insurance coverage, emergency fund and future income plan. Think about having a frank discussion with your new partner about how you’ll divide assets in the event of divorce or death. If ex-spouses or children are in the picture, consider managing finances and estate plans separately. With the assistance of your financial advisor and estate-planning attorney, you can establish a basic estate plan, and, as appropriate, discuss other strategies for preserving wealth.
For more expert retirement guidance, visit wellsfargoadvisors.com.
“Planning for retirement is part of the financial journey. Key planning strategies can help you feel confident as you approach your golden years solo,” says Pedvis.