Retirement isn’t an easy thing to plan for. It takes years of preparation to make sure you’ll be financially secure through your golden years.

It’s a complicated enough process when you’re planning with the help of loved ones and a romantic partner. For single people, that process may look a bit different and come with some additional important considerations.

In this blog post, we’ll cover the general basics of retirement planning, the ways in which it’s different for singles, and some important notes to keep in mind if you’re expecting to retire as a single person.

The basics of retirement planning

No matter your personal situation, the fundamental principles of retirement planning still remain the same.

As covered in this Investopedia article, there are five essential principles when it comes to planning for your retirement. Before worrying about any additional considerations, it’s important to understand these basics in detail.

These basic ideas include:

• Investing in accordance with your timeline and risk tolerance: The main idea here is that when you’re younger, you’re better served investing in stocks and other riskier investments than ones you’d put your money into later down the line, like bonds and other more stable assets. You need to make sure you’re comfortable with the level of risk your portfolio is facing at your current point in that timeline.
• Determining your retirement spending habits: Having as solid of an idea as possible of how you’ll be spending your money during your retirement can be incredibly helpful for determining how you’re going to invest and how much you’re planning to save.
• Taking taxes into account: When you’re calculating your rate of return on your retirement portfolio, you need to make sure what you’re calculating is an after-tax rate of return. This helps to make sure you’re not expecting more money than you’ll actually receive to handle your anticipated retirement spending.
• Estate planning: As you formulate your retirement plan, you should plan for how your assets will be distributed once you’ve died. This can help friends and loved ones avoid potential financial difficulties after you’re gone.

How is retirement planning different for singles?

There are some important distinctions to make when you’re taking on this planning process alone.

Someone planning for their retirement with the help of a partner and other close loved ones has a support system around them to help manage certain bumps and fluctuations in this plan. If, for example, market swings do serious damage to your retirement portfolio, you are solely responsible for managing the situation if you’re single.

With this in mind, some important retirement planning guidelines for single people to remember include:

• Planning for added financial risks: If you’re single with no prior marriage to speak of, your additional planning should consist of building up emergency savings and considering the potential payouts of annuities and Social Security. If you’re divorced or widowed, you could claim additional benefits. For someone who’s divorced, however, split distributions of payments from an IRA or other retirement account are possibilities to consider.
• Creating a support system: If you don’t have a partner or children, it’s important to build up your interpersonal network to help you manage through your retirement years as needed.
• Keeping long-term care in mind: This can mean considering long-term care insurance as well as the costs associated with, if necessary, an assisted living facility.

Start planning as soon as possible

No matter your current age, it’s paramount that you begin planning for your retirement now if you haven’t already, and it’s ideal to do it with the help of a financial advisor.

The team at OWLFI can help with that, as they have for many people already. Call or email us to schedule an appointment now and make your retirement as worry-free and enjoyable as possible.