So many financial plans out there are based on families. So, what do you do if you’re single? You don’t have a spouse, there are no children involved, and you may no longer even have parents. Financial plans that are based on families won’t be the best fit for you.
Here are five financial planning strategies tailored for older, single adults.
- Optimize your benefits
Whether you’re planning to use private insurance, long-term care (LTC) insurance, your veteran’s benefits, or another third party to cover the cost of caregivers, assisted living, or memory care, look for ways to optimize your policies and benefits to support your long-term care goals. Keep in mind that many senior living options are funded by private pay or LTC insurance and are not covered by Medicare.
- Make sure your estate planning is up to date
It’s important, to keep your estate plan updated—and it’s even more important when you’re an older single adult. While many people are told to review their estate plan every 5 years, there is no reason not to take a look at it once a year. Laws are constantly changing, and you may need more documentation than your currently have. You, of course, should also review your estate plan during major events, when moving into senior living, or acquiring any major assets.
- Be proactive about planning
When it comes to financial security, early planning is key. For example, you should ideally start looking into Long Term Care insurance in your mid-50s to early 60s. In addition, if you want to sell your home and downsize, plan to do it well before you need to move into a senior living community. Being proactive about budgeting can help you maximize your assets, reduce your financial burdens, and avoid complications down the road.
- Review your financial plan and investment portfolio
Financial planning is not a one-size-fits-all approach. Optimizing your investments requires a deep understanding of how your retirement income, pension plan, social security, investment accounts, and other assets work together—now and in the future. To minimize financial risk and ensure you have enough money to cover the cost of care, get an estimate of your senior living costs for the next 5–10 years, and develop a plan for how to fund. If you are withdrawing from an investment portfolio, consider earmarking funds in a separate account. The pricing of senior living will vary based on your living arrangements and the amount of care you need. Just because you’re older doesn’t necessarily mean you should move everything into conservative assets.
- Protect yourself against fraud
As identity theft, data breaches, and elder fraud become increasingly common, it’s crucial to protect yourself from scammers. Millions of Americans fall victim to some type of fraud or scheme each year. Fraudsters come in many forms and often target singles because of their tendency to trust. Many singles have financial savings, own a home, and have good credit. Always take steps to safeguard your credit card and sensitive personal information.
It’s never too early to start considering the level of care, independence, environment, safety, health care, and daily needs you will need in the future. Give me a call, and I can do my part to provide you with the information you need to know in order to optimize your financial planning for your specific goals.