More middle-aged Americans are living alone than in earlier decades. The percentage of never-married, divorced, or widowed people rose from about 29% to 35% among those aged 50 to 54 and from roughly 30% to 33% for people between 55 and 65.
Singletons have financial planning needs that differ from those of married couples. With only one household income, it is harder to set aside long-term savings for emergencies and retirement, and single retirees generally receive smaller Social Security benefits than two-income couples.
The timing of Social Security benefits is an important decision that depends on each individual's finances. Some single people with an immediate need for income may choose to retire earlier, while others benefit from working longer to increase their monthly checks—an approach that often helps public-sector employees whose pensions are based on their final years of earnings.
Disability can limit or eliminate a single person's ability to earn, so Disability Income coverage is often essential. Because singles typically do not have a spouse or dependent to provide in-home care, buying a comprehensive long-term care policy in advance is also advisable; for more on planning that combines retirement and care considerations, see The Importance of Retirement Planning and Long-Term Care.
Other financial needs for singles
- A revocable living trust to provide income in case of incapacity; assets outside the trust might require a durable power of attorney from the person who controls them.
- Joint accounts can help a caregiver meet financial obligations if needed, though joint ownership can create complications in some situations.
- Advance planning for naming an executor and appointing someone to make health-care decisions if incapacitated, including a living will, organ-donation preferences, and control over medical records.
People who are recently divorced or widowed often face emotional stress and complex financial changes. A financial plan crafted by a professional can provide peace of mind and help align savings, insurance, and benefits with the needs of a single household; see Young Workers as Homebuyers and Retirement Planning for related retirement-planning considerations.
For more information on long-term care options and how they may affect a single person's plan, review resources such as Long-Term Care in America. If you want personalized guidance, consider reaching out to a professional and talk to an agent.
Frequently Asked Questions
How does being single affect retirement savings?
Singles have only one income source, which can make saving for retirement more challenging and may result in smaller Social Security benefits compared with two-income households.
Should a single person buy long-term care insurance?
Many single people benefit from purchasing long-term care coverage because they cannot rely on a spouse for in-home care or financial support during prolonged illness or disability.
What estate planning documents should a singleton have?
Important documents include a will, a revocable living trust if appropriate, a durable power of attorney, and advance medical directives such as a living will.
When should a single person consider disability income insurance?
Disability coverage is recommended as soon as someone begins relying on their wages to cover living expenses, since disability can quickly eliminate a single person's ability to earn.