There are many benefits of being single during retirement. You have the freedom to live the retirement you want to live on your terms, you can travel and explore and find new hobbies. You also may not have the same level of living expenses married couples often have.
However, being single in retirement can also present some unique challenges. Married couples may have two income streams, multiple retirement savings plans and a variety of benefit options. They also have each other to rely upon for difficult emotional, financial and medical decisions.
That’s not to say being single in retirement is better or worse than being married. It just means you have different planning challenges to consider. Below are three tips to help you overcome some of the challenges you may face as a single retiree:
Consider a power of attorney.
One of the challenges you may face is making important decisions should you become incapacitated. Given the prevalence of cognitive issues like Alzheimer’s among the elderly, it’s possible you could struggle to make financial or medical decisions as you age.
Married couples have the benefit of having someone else available to help with those decisions. You may want to consider setting up a power of attorney and healthcare power of attorney to designate a decision-maker on your behalf, should you become incapacitated at any point.
A power of attorney can make all of the same financial decisions you can make for yourself, including paying bills, writing check and taking out loans. A healthcare power of attorney can speak on your behalf to doctors and other medical personnel. Obviously, you should name people you trust to these positions.
You don’t have to implement the documents right away. Rather, your attorney can hang onto them until you become incapacitated, if you ever do. Then, he or she can implement them, giving your power of attorney the necessary authority to make decisions on your behalf.
Look at long-term care insurance.
Another possibility as you advance through retirement is you may need extended medical care. Many people perceive this to mean living in a nursing home. However, it may be that you need a nurse to visit you in your home during the day. Or, you may need someone to help with cooking, cleaning and other support. It’s also possible you might need to make improvements to your home in order to accommodate a loss in mobility.
Many long-term care policies today offer benefits for a wide variety of care, including in-home support. And, If you don’t have a spouse to rely upon for care and support and you want to stay in your home, it may be necessary to hire outside help. Consider a long-term care insurance policy that covers this type of treatment.
Examine ways to create guaranteed* income.
A challenge many singles face during retirement is the lack of a secondary stream of income and retirement assets. If your retirement savings suffers serious losses and experiences heavy volatility, it could impact your ability to draw income and support your lifestyle. Without a spouse’s income or savings to fall back on, you may experience financial difficulty.
A possible solution is to convert a portion of your savings into a guaranteed income stream in retirement. One way to do this is purchasing an annuity product that offers something called a guaranteed lifetime income benefit. This benefit allows you to withdraw a certain percentage of your account value every year. That withdrawal is guaranteed for life regardless of how good or bad your underlying investments perform.
Talk to J. Harris Financial today about these three steps and other actions you may need to take prior to retirement. We can help you analyze your situation and develop an action plan.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
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