7 Areas to Think About when Planning for Retirement as a Single Person

I have been single for a large part of my life. And if you are doing some planning for your finances going forward, some aspects that you will think about as a single will be whether there are things that I didn’t realize I need, just because I am single.

There are some things that I am concerned about, and they do not start with money. The clearest is that in the event of different degrees of disability, how would that affect my life? How much higher cost would I need to support such a change in lifestyle?

Kiplinger came up with an article titled Planning for Retirement as a Single Person that I thought is pretty good. I thought it will be those articles we can gloss over but turns out it covers different aspects.

I listed out some of those points without the flowery words. For the singles like myself, it might be good to take a look and see if you will need to cover some of your bases.

1. Build a team

Singles do not have a parent or adult children to take care of them. 

You need to build your supporting cast of:

1. Family. Find siblings, nieces, nephews or cousins
2. Trusted Friends. Long time friends that you have good relationships with
3. Paid Professionals
   1. Certified Financial Planner
   2. Estate planning attorney
   3. Accountant
   4. Geriatric care manager

They are there to:

1. Help with the finances
2. Make medical decisions if you are incapacitated 
3. Prevent isolation at old age
4. Need people to stop by, run errands and drive you to appointments

How to get started:

1. Take time to talk to them
2. Find out what they are willing to do
3. Outline your relevant plans and wishes
4. Revisit the plans often

2. Create an Income Safety Net

1. Have enough income for major illness or other calamity
2. Instead of the usual 3 to 6 months emergency fund, have 9 to 12 months of emergency funds
3. When planning for retirement, use the cash buffer strategy to mitigate sequence of return risk. Have roughly 2 years of expenses for that
4. If you are working, disability insurance is more important than if you are a couple

3. Funding your Retirement

How much you need for your retirement, sometimes is a security issue. Some folks are more risk adverse, some are more risk seeking. 38% of singles reported feeling “not at all secure”. This compares to 23% of married men and women in a 2016 Northwestern Mutual survey.

1. Save 15% of your take home pay for retirement
2. For those whose company give you an employee match, contribute enough to get that employee match
3. Even if you started late at 55 years old, putting more into building wealth will make your retirement a higher reality than not doing anything at all. 

No other advise here

4. Dealing with Government Pension Plan

The advise here is pertaining more to USA Social Security but I think there are some useful considerations for our own government pension plan, the CPF as well.

Singles have less complications compared to married folks. For context, married folks need to consider:

1. Married seniors are encouraged to postpone claiming benefits. This will leave a larger survivor benefits to a lower earning spouse
2. This is not a concern for never-married single retirees
3. Delay claiming bad if you have health concerns and family history that you do not live past mid 80s. If your family have history of great longevity, then delaying might be worth it

5. Long term care

Nearly 70% of seniors will eventually need some form of long-term care.

Estimate 20% of seniors need this amount for more than 5 years.

Women typically need it for longer periods than men.

Long term care insurance covers the health care costs that are not covered by your standard health insurance.

They are not cheap. Premiums increase as you age

An example given in the article:

• Healthy 55 year old woman
• Premium $5,100/yr for a Genworth policy
• Benefit: $250/day for 5 years ($7,500/mth, $90,000/yr, $450,000/5yr)

In contrast, the revamped CareShield Life:

• Healthy 55 year old woman
• Premium $759/yr (but will increase over time) (without subsidies)
• Benefit: in 2020 $600/mth and increase over time and as long as you remain disabled ($7,200/yr, $36,000/5yr, $180,000/25yr)

6. Estate Planning

1. Most childless singles find friends and family to carry out their wishes
2. Find backup (called a successor) in case first person chosen is not available
3. USA lawyers charge $1,500 to $2,500 to do up the trust documents
4. Durable power of attorney. Give someone the authority to manage your wealth if you are unable to do so. Or you simply need help
   1. Springing power of attorney: does not take into effect unless you are declared incompetent
   2. Limited power of attorney: the person can only make certain decisions on your behalf, such as pay monthly bills
5. Living will or health care proxy (LPA).How you want to be treated in certain medical situations
   1. Find someone to make medical decisions for you
6. Information release.Give the doctors permission to share information with selected people you choose.
7. Will. If you passed away without a will, your assets might be distributed to relatives you do not know. Having a will allows you to have some control over how your wealth is divided. (you can read about MoneyOwl’s free digital will writing service here)

7. Housing Options

1. You might need to make structural changes to your current home to make the home safer and more accessible
2. Home sharing. Think of my favorite sitcom growing up in The Golden Girls
3. Continuing care retirement communities. Range from independent living to skilled nursing. Cost range from $100,000 to more than $1 million. Average fee about $320,000 and you have to pay a monthly fee of $3,300!
4. Naturally occurring retirement communities. A cluster of homes which cater to older folks. The people living in their home but subscribe to an annual membership fee for access to transportation, social activities and health care management servicess
5. Co-housing. Pay monthly membership dues to be part of community. Common area for meals, socializing and events 

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