By Lynn Ballou
Those of us in the planning profession are prone to focusing on planning for a couple's financial independence. Sure, we factor in such possibilities as the premature loss of a spouse, but what about those women who have only their own resources to depend on? What matters most to them? Let's look at a few potentially costly areas of retirement for single women, and some thoughts about how to successfully navigate them.
Many cruises and tours seem to be geared towards couples, so work with travel agents who specialize in solo travel and look into online sites with that focus, too. One of my single, adventurous clients books her own airfare, her own hotel, and arranges her own guides all from the comfort of her home and her computer. She takes her time to shop for best prices and to vet the guides thoroughly.
Also, think about all the clubs you belong to and whether they have opportunities to travel solo. In my own family, relatives have been able to score some good solo rates through everything from hiking clubs to tennis clubs along with biking groups. Maybe it's time to join a group with shared interests.
Managing Home Repairs and Maintenance
If you're not skilled at home improvements, you will need to find a group of skilled people and companies you can rely on.
A few good ways to do so vary from Yelp to your local hardware store, and then from your local big box home improvement store to online community boards like Nextdoor. Be sure to check references, and if you are concerned about being home alone, have a friend join you for coffee while interviewing and collecting quotes. Exhausting though it may be, I always recommend obtaining three independent written bids. And the least expensive isn't always your best fit. You care about how they treat you, your home and the work site, as well as reliability.
Saving for Retirement Can Be Harder for Singles
To carve out enough money from your checks while you are actively working, to enjoy a comfortable retirement, generally means you need to put a higher percentage of your income away than married couples you know. It's a heavy burden and it means crafting an affordable lifestyle during your working years, but also being prepared to downshift your overhead during your retirement years if you need to. Work with a good financial adviser to project and model how much you should be putting away for your future and how to invest so that when you want or need to retire, you'll be more likely to have created a comfortable nest egg. Stay on top of your progress regularly --- don't just invest and forget to review and adjust as needed.
How Do I Factor in Social Security?
If you are claiming Social Security on a deceased or ex-spouse, then you need to arm yourself with data. Know your former spouse's birth date, Social Security number (and date of death, if deceased), and gather some preliminary information the Social Security Administration's website. You can also pull up your own Social Security information on this site.
Things you need to find out include: Can you claim spousal benefits or are you entitled to a benefit based on your ex-spouse's income? Also, you need to learn when you can receive those benefits along with the amount and how that benefit might or might not impact receiving benefits on your own Social Security credits.
It makes sense to sit down with an expert at Social Security by phone and/or in person to really work through the numbers. And personally, I always suggest to my clients that they meet with more than one person at the agency. Sometimes, due to the tricky nature of these calculations and the myriad of options, two or more minds are more helpful than one.
You can find certified financial planners who are experts in these and other areas. You can find them by specialization at the website for Certified Financial Planners, LetsMakeAPlan.org, and the website for their industry professional organization, the Financial Planning Association. Another very helpful organization is NAPFA for fee-only planners.
What about Health Insurance?
When you investigate Social Security options, it's a perfect opportunity to look into Medicare and other health insurance options. You might still be working when you are 65 and have health insurance through work, but you should still, at the very least, sign up for Medicare Part A to avoid penalties later on. If you find that it's difficult to navigate the Medicare maze and compare plans and other options you have through employer plans, don't be shy - hire help! A sure-fire way to have a perfectly planned retirement sabotaged can be a poorly planned health insurance protocol including plans for long-term care if needed.
This is just a brief list of what you might encounter as you navigate the expenses of the single retirement life. Be as prepared as you can before you retire so that you aren't blindsided by things that should already be in your long-term budget.
I recommend setting up annual expense categories for such things as travel, home and auto repairs, and even for replacing your vehicle as it ages. The same categories of spending during your working years should be your starting point for planning your retirement spending needs. While you may not need that expensive work wardrobe, you'll still need to cover the cost of other types of clothes and many other daily financial matters of life.
Thinking that all of these just magically disappear at retirement is not wise and might result in running out of resources prematurely during your retirement. By all means be an independent thinker and rely on your own smarts. However, when it's time, be sure to reach out to skilled, affordable, and educated advisers who can help you navigate these areas.
About the author: Lynn Ballou is a certified financial planner and regional director for EP Wealth Advisors' Lafayette office. In her role as CFP Board Ambassador for the Bay Area she enjoys speaking and writing about the importance of comprehensive financial planning, especially for women and their families. You can learn more about her at her website.The review, assessment, and opinions expressed in this column are limited to and in association with general financial planning subjects. They are intended to introduce the reader to general financial planning topics. This column should serve as a tool that can assist readers in the development of subsequent discussions with a financial planning professional, tax adviser, or attorney, as appropriate, regarding each reader's own unique circumstances and goals.