Essential Retirement Planning for Solo Agers

For couples, retirement brings a new chapter, one marked by years of hard work now proving to support your relaxing lifestyle in your golden years. But for a growing number of individuals, the reality of retirement may be different. We use the term “solo ager” to define this demographic—people navigating retirement without a partner. 

Whether by choice or circumstance, these individuals face a unique set of challenges and opportunities as they enter into their retirement years. While retirement can be a fulfilling journey for anyone, careful retirement planning becomes very important for the future security of solo agers.

‍

What is a Solo Ager?

A solo ager is someone navigating the later stages of their life—including retirement—without a partner. People who are solo agers are typically independent either by choice or circumstance. They may have lost a spouse, been divorced, or chose to remain single and never married.

‍

Understanding the Unique Financial Challenges of Solo Aging

Solo agers face a distinct set of financial challenges that people with partners may not. Some notable challenges solo agers may financially face include:

• Reduced income because they don’t have a dual income that couples have.
• Increased expenses including healthcare costs, housing, and other living expenses.
• Lack of a financial buffer that a partner may provide.
• Potentially complex estate planning as a solo ager’s plan creation may be more intricate without a joint plan.
• Long-term care costs because the expenses fall solely on the individual.

By understanding these unique challenges, solo agers can more accurately plan for their retirement.

‍

Financial Planning for Solo Agers

For solo agers, financial planning requires a careful approach to address the above challenges.

Budgeting & Saving

Creating a detailed budget that outlines all income and expenses helps build a strong financial foundation. You may consider establishing a larger emergency fund than traditional households to prepare for unexpected circumstances. Part-time work can also provide supplemental income and help work towards financial stability during your retirement years.

Sources of Income

Maximizing Social Security benefits through strategic claiming is important to consider. If you have a pension, you may consider optimizing it, while building a diversified investment portfolio can generate ongoing income.

Healthcare Costs

Understanding Medicare coverage and exploring supplemental options gives you choices for adequate health insurance. Planning for potential long-term care needs is also important to protect your assets and maintain quality of life. Additionally, utilizing Health Savings Accounts could provide tax advantages for saving towards healthcare expenses.

Estate Planning

A comprehensive will outlines how your assets will be distributed after your death. Appointing a power of attorney ensures someone can manage your financial affairs if you become unable, while a healthcare proxy makes decisions about your medical care. Consulting with an estate planning attorney can help tailor these documents to your specific needs.

Housing Considerations

Carefully considering options like downsizing may potentially yield significant financial benefits. Exploring retirement communities that offer various levels of care is also a good idea to look towards future-proofing housing needs. Additionally, making necessary home modifications to ensure accessibility and safety is important so you maintain independence and reduce potential costs associated with unexpected accidents or health issues.

Professional Advice

Don’t be afraid to seek advice from a financial advisor regarding financial planning and retirement. A tax professional may also help optimize your financial situation, while an elder law attorney can create essential estate and healthcare plans. It’s important to remember that financial planning is an ongoing journey, so consider regularly reviewing and adjusting your strategies.

‍

Building a Support Network

While it’s important for solo agers to focus on their financial futures, a strong support network is essential. Enjoying emotional support, practical assistance, and companionship may significantly increase quality of life. Building connections through family, friends, clubs, or volunteer work can provide a sense of belonging and security, and investing time in nurturing relationships may lead to a richer, more fulfilling retirement experience.

‍

‍Interested in learning more about financial and retirement planning as a solo ager? Consider attending one of our retirement seminars or webinars, hosted by experienced financial advisors who can assist with all your retirement planning needs.

‍