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Being single has its perks: no one to pick up after, cook for, or argue with you about how you spend your time or money. But when it comes to saving for retirement it’s a lot tougher for single people. So why save for retirement?
Did you know that only 55% of all singles will have enough money saved for retirement? That’s pretty dismal compared to married couples of whom 80% will have enough saved.
Why is that? Well for one, married couples typically have two retirement accounts from which to live and will share in double Social Security benefits. Secondly, they have someone to keep them on track, investing for their retirement. When you’re single, there’s no one there to push you to save for the golden years.
So, if you’re single here are three things you can do to help keep your retirement savings plan on track:
No surprise here. Last I checked, short of winning the lottery or inheriting money, the only way to build your next egg is to save. You should shoot for saving at least 20% of your pre-tax income for retirement. Although that’s a good number, it might not be the right number for you. Investment professionals suggest you run the numbers to make sure it’s enough. You can use the retirement estimator at Choose To Save and figure out how much you really need to save or work with a professional financial planner and then sock it away accordingly.
2. Get Protection
Disability insurance is the one insurance most of us don’t have. If you’re single, you need it even more, and if you’re single and self-employed without it, you’ll be living back at your Mom and Dad’s house.
Disability insurance can be expensive but there are great sites to help you figure out what you need. Here’s a great article from Smart Money to start you out.
One thing’s for certain – don’t buy long-term disability online. Find a professional who can help you out.
And, don’t forget to get health insurance if you don’t currently have any…a health-related situation can ruin you financially and having you playing catch-up with your retirement account.
3. Tie It Up Right
I can’t tell you how many people I speak to that own property, have children, own businesses that don’t have a will, trust or durable power of attorney. I just recently updated my will and signed a durable power of attorney giving my daughter that power, if needed. The power of attorney is locked away at my lawyer’s office and my daughter would have to “prove” to him that it was necessary to activate in order for her to make legal decisions on my behalf.
Bottom line – someone needs to be in charge if you can’t be. Luckily for me, although single, I have a grown adult daughter who can pay my bills and act on my behalf if needed.
Don’t delay; get to an attorney and draw up the legal documents to keep you protected.
How to save for retirement and protect yourself doesn’t have to be complicated. You just need to put in place the necessary safeguards and saving strategy to ensure when it’s time to say goodbye to working, you’ll have what you need.