Not having a built-in support system of a spouse, children, in-laws, etc., can lead to challenges for singles as they age. About 35.4 million Americans lived alone in 2016, making up almost a third of all households, according to the U.S. Census Bureau, and about 20 million of them are 65 or older. For these aging singles, planning is key to being prepared for financial security and health issues, as reported by CNBC in “For aging singles, here's how to plan for your golden years,”
Saving as much as possible in a 401(k) plan or IRA while you can is important. You should also make certain that you have emergency savings if you're still working. If you are still employed, find out if your company offers group insurance for long-term disability. Those policies provide a portion of your income, in case you end up unable to work due to an accident or other medical condition.
There are other ways for singles to protect themselves, as they age.
As part of your estate plan, select someone to handle your finances, for when you reach a point where you can’t. When you make someone a trustee over your assets during your life or give someone durable power of attorney over your IRAs and 401k(s), he or she will be responsible for paying your bills with your money. It is, therefore, important to choose someone you trust. You should also grant someone durable power of attorney for health care. That lets the individual make important health-care decisions if you can’t. This is different from a living will. A living will is a document that states your wishes for if you were on life support or suffered from a terminal condition. This helps instruct your proxy’s decision-making. If you have no one named, your healthcare providers must follow your wishes in that document.
If you’re single and don’t have family close by who can assist, and if you need help with daily living activities, you'll need to plan for how to pay for it. A person turning age 65 today has nearly a 70% chance of needing such long-term care in their remaining years, according to the Department of Health and Human Services. On average, women need care longer (3.7 years) than men (2.2 years).
You also need to understand that Medicare (which you generally sign up for when you’re 65) doesn’t pay for long-term care. It can be expensive. If you have no family to rely on, and you don’t want to spend down your assets, long-term care insurance (LTC) can be an option. LTC insurance will pay a daily amount, up to a predetermined dollar limit and length of time, for services. Policies typically cost up to $2,000 a year for younger applicants (in their 50s) and double that for those over age 65. As with all age and health related insurance, the younger you are when you look into it, the better.
Here's a critical point: if you have a medical emergency and you live alone, you could be at risk. There are many different ways to solve this problem, among them, a medical alert system or a tag team of peers who check on each other daily.
For single seniors, it is very important to make sure that there is documentation in place that will guarantee your wishes are carried out in the event of your incapacitation or passing.
For more information on creating a plan to make sure you or your loved ones are taken care of or other estate planning topics, explore our blog and visit our website today to schedule your consultation!
Reference: CNBC (July 2, 2018) “For aging singles, here's how to plan for your golden years”