By Solid Serenity Legal Solutions
Few things in life have a one size fits all answer, and that is especially true of retirement. Single women should take a look at their retirement plans earlier than any other demographic.
While women have long been at a disadvantage entering retirement due to earning less than men, interrupting careers to raise children, and living longer, single women have the additional obstacle of a single income household in retirement planning.
Due to this, single women tend to have lower retirement savings than their married or widowed peers. On top of the lower savings, single women face unique challenges when it comes to higher costs for retirement living and long-term care.
Women who are single at 65 face the largest shortfall of any group, and with marriage rates declining and millennials staying single longer than generations before them, many more women could face this reality going forward.
A Society of Actuaries report found that singles were less likely than couples to put a high priority on retirement saving. But financial advisors stress that single women should start thinking about their retirement even earlier than couples or single men.
The focus of single women preparing for retirement should not only be on saving more that their peers, but also looking differently at things such as insurance, caregiving plans, retirement housing, and estate planning.
(1) Prepare for Emergencies
For instance, during the time when people are saving the most for retirement, single women can be more at risk if hit by an illness or losing their job without a partner to fall back on. Single women should put a higher priority on building a reserve fund for emergencies in addition to considering buying disability insurance, at least until the emergency reserve fund is large enough to draw from.
(2) Prepare for Higher Costs
Single women do not just need to prepare to spend 50% of what their married peers spend in retirement but rather need to be prepared to spend 70% what their married peers do in order to account for higher costs.
Women often provide the majority of caregiving to loved ones, and often end up needing such help for themselves. It is one of the reasons why women make up the majority of retirement home residents.
Many tend to rely on children or other family nearby for financial assistance during the first phase of long-term care, but for single women without children or family, the out of pocket costs start on day one. Many financial advisors recommend single women look at insurance options to help with such aid.
(3) Prepare an Estate Plan
And then there is dealing with the estate. Estate planning is important for everyone, but for single women it is especially crucial to make sure that documents such as their will, waivers allowing third parties to receive health information, and powers of attorney are taken care of.
To determine what steps need to be taken to ensure that you are prepared for retirement and beyond, reach out to your trusted estate planning and financial planning advisors today!