Planning a solo retirement: tips for singles to feel secure about their financial futures

Millions of people across the United States are providing for themselves as they as they face retirement, making it an increasingly common theme in financial and life planning. But each situation is unique; some people are divorced or widowed, while others never married — and any of these situations may also involve supporting children or aging parents.

Still, there are a number of similar topics and questions for independently aging Americans to think about and plan for, even if the answers will be different for each individual. These topics fall into three main categories — finance, legal and health — with a lot of overlap.

The task of planning for retiring alone can seem daunting, especially as it usually involves advice from several different professionals, such as an attorney, a financial professional and a tax advisor. And it involves some topics that can be uncomfortable to think about and discuss, like choosing someone to help with end-of-life decisions. However, many financial professionals are increasingly taking a more holistic view and can help you feel empowered as you think through some of these issues and find strategies that work for your unique situation.

These tips serve as good conversation starters for solo agers — and those who advise them — to forge a fulfilling, secure and supported path:

  • Max out your retirement savings plans while you’re still working. The wide variety of pretax retirement savings plans available in the United States — from employer-sponsored plans to Individual Retirement Accounts (IRAs) — are generally accepted as one of the best options for any extra income you have after your regular monthly expenses. These plans actually allow you to reduce your yearly tax bill by investing money before you pay income taxes on it. That’s a double benefit — deferred taxes in the near-term while investing for the future.
  • Give the gift of education. Education accounts can be important considerations for investors. If you have nieces, nephews or godchildren whom you would like to help send to college someday, college savings plans can be a great alternative to simply giving these future scholars money as a graduation present because your earnings grow federally tax-deferred, qualified withdrawals are tax-free and some states have other tax benefits as well.
  • Invest in the right place to grow older. If you are earning more than you need on a monthly basis, even after saving in a pretax retirement plan, you can consider additional investments in a wide range of non-qualified, non-tax-deferred products outside your retirement plan, which are often more flexible and don’t have restrictions on withdrawals. Also, home buying can be a practical way to diversify your assets while creating a place that is truly your own.

    Your current home may not be the ideal place to grow older, especially if you won’t have as many opportunities to socialize after you stop working, so consider investing in a home or community that is accessible and encourages all the activities you enjoy.

  • Secure a guaranteed payout. Life insurance is a way of providing for your dependents by paying either a monthly or annual premium to secure a guaranteed payout to your beneficiaries after your death. It is fundamentally different from savings vehicles because its proceeds will be paid to the beneficiaries in the event of your death. If you don’t have dependents, you may want to discuss with your financial professional whether life insurance is a suitable consideration for you.
  • Consider disability income/long-term care insurance. Aside from general health insurance coverage, disability income and long-term care insurance cover you if you become disabled and cannot continue to work, as well as your long-term needs. These can be particularly important considerations if you are living alone or with dependents who are not capable of caring for you.
  • Optimize tax advantage. An important part of holistic financial planning is making sure you are optimizing any tax benefits available to you. Even if you prepare your own tax returns each year, seeing an accountant on an ad hoc basis will likely yield some helpful tips.
  • Enlist your future guardians and have the right documents in place. Estate planning is particularly important when you have more complex assets or a more complicated set of beneficiaries. Your legal and tax advisor, as well as your financial professional can be help.

    Designating in advance whom you want to sign important documents for you, in the event you cannot do so yourself, is an important consideration for every individual. Also, choosing the person who will be responsible for your end-of-life decisions is a big commitment. Start having conversations with your trusted friends and family members to ensure everyone is comfortable with this important role.

    Finally, having the right documents in place will make it easier for your loved ones later. For example:

    • Your will: Drawing up a will, especially if you are relatively young and healthy, may feel awkward and/or unpleasant while you are doing it. But it is one of the best ways to put your mind at ease with regards to planning for any dependents or loved ones, including pets.
    • Living will: This is your plan for how you would like to be cared for in the event your health reaches a life-threatening level and you are not able to articulate your wishes as to how much care you would like to receive.
  • Communicate clear custody arrangements. Anyone with children should have clear custody arrangements in place that meet the appropriate legal standards. This is important for any situation in which you may not be able to care for your children either temporarily or permanently.
  • Plan for your health, but also your wellness. Some healthcare issues are far from life-threatening, but they can still be inconvenient, especially if you live alone — think about a broken leg or coming down with the flu. Planning in advance to have someone who might be able to help out during those times can ease the stress of the situation. Making sure you have your own health insurance coverage is particularly important if you are not covered by someone else’s plan.

It’s also important to consider the wellness treatments you invest in for overall physical health and stress management, like chiropractic or acupuncture, for example. Some health plans will not cover this and it’s important to ensure you’re considering not just health insurance costs, but wellness too. Staying fit in the first place has benefits that go beyond your physical health itself — it may help you financially through lower premiums for health insurance and reduce your chances of having to miss work (potentially unpaid) for medical reasons.

  • Leave your legacy. You have made an impact during your life — whether on family, friends, your community or career. You may want to give back now, through financial contributions, such as to a school you went to, or perhaps a charitable foundation. Maybe your contribution is more sentimental, like special books you would like to give to friends or a library. Be sure to think of people, causes, institutions or places that have been important to you as you plan.

In addition to the relevant professionals, like a financial professional, tax advisor and attorney, talk to your family and friends about your plans. It will be important to have them on board in understanding your intentions and goals. A strong support network is an important part of aging independently. Planning alone can seem daunting, but only you can initiate the steps to take control and surround yourself with the right team to plan for a secure future and peace of mind.

This informational and educational article does not offer or constitute investment, legal, tax accounting advice. Your unique needs, goals and circumstances require and deserve the individualized attention of your own financial, legal and tax professionals. Equitable Financial Life Insurance Company and its affiliates do not provide tax or legal advice or services.

Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (NY, NY), Equitable Financial Life Insurance Company of America, an AZ stock company with main administrative headquarters in Jersey City, NJ, and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN).

GE-3202728 (08/2020) (Exp. 08/2022)