Saving for retirement can be hard enough for couples with two incomes, but retiring single can bring its own unique challenges. The good news is that some planning might help put you in a better position to help you feel financially secure during retirement. Here are some factors you might want to consider if you're expecting to be single when you retire.
Lean on Professionals for Support
The first thing you may want to think through when you plan to retire single is who will help support your financial security and well-being over time. That might include working with a financial representative, a certified public accountant (CPA) or an estate planning attorney so you have a clear strategy for your money, taxes and estate.
An estate plan typically includes more than just a will or instructions for what happens to your assets once you're gone. It may also include documents like a power of attorney, which outlines who can legally make decisions for you if you're unable to do so. There are different types of power of attorney, and the document will outline the specific decisions the power of attorney can make.
Your team might also include a professional who can help you determine the kinds of insurance policies you may benefit from such as long-term care insurance. Consider consulting a financial representative to find out what could be right for you.
Consider Prioritizing Personal Finances Now
In addition to working with a team of professionals, there are some steps you can consider taking on your own to help get the foundation of your finances in good shape before you reach retirement age. For instance, you may want to start setting aside an emergency fund. A good rule of thumb is to have three to six months of expenses in an emergency fund. As you approach retirement age, you may feel more comfortable padding that even further.
In addition to building up your emergency fund ahead of your retirement date, it may be a good idea to evaluate your assets and determine if your projected returns will be enough to fund your retirement. Keep in mind that there are many reasons why the amount of money you need for retirement may be greater than you anticipate. It's also important to remember that no investment type can guarantee growth, and may instead lose value over time.
Know Your Options With Social Security
Claiming Social Security is relatively simple if you never married. Your benefits are based on your work and income history. You'll receive your full benefit if you wait to claim Social Security until your full retirement age, which is currently between ages 65 and 67, depending on when you were born, according to the Social Security Administration (SSA). That benefit can increase by 8% every year you wait to claim up until age 70.
If you want the biggest possible benefit, it might make sense to wait until 70 to file. But keep in mind you may receive more checks over your lifetime if you take your benefit early (which you can do starting at age 62). The appropriate strategy for you depends on your specific situation, your other income sources, and what you expect your expenses to be in retirement.
If you're single now but were previously married, Social Security gets a little more complicated. For example, your benefits depend partly on your previous spouse's work history instead of just your own.
There can be many benefits to retiring single — including being able to shape your retirement years around your own goals and desires. But there are some important steps to consider taking while you're still on the road to retirement. Doing so could help you enjoy your lifestyle with the knowledge that your finances are in a good spot.