Top 5 Financial and Retirement Planning Tips for Single Women

While married couples receive extensive financial benefits when it comes to insurance, taxes, etc., single individuals often get the short end of the stick. Retirement planning becomes even more challenging, since you cannot rely on a spouse to help with saving for a retirement fund or enjoy the Social Security extras that married couples do.

For single women, taking care of family expenses and planning for retirement is even harder, what with lower pay scales and higher life expectancy, as well as reduced retirement benefits. They typically have to handle expenses alone, without many people they can turn to for help during their working years or in retirement.

Over half of all divorced and widowed women, and 44% of those who’ve never married, have little or no nest egg for their retirement years. Even if you’re planning to get married someday, you need to pay greater attention to your finances, since the likelihood of outliving your savings is very high.

To ensure you’ve got enough money saved for retirement, follow these 5 money rules:

1. Regular & Early Savings

   This golden rule applies to everyone, but is especially crucial for single women attempting to fund their retirement. Start putting away whatever money you can spare, as soon as you start earning, and make savings a priority. Train yourself to think of your retirement fund the same way as food and housing, i.e. before any other expense!

   Keep your retirement fund in a different account than the one you use for regular expenses, and keep putting more into it with every paycheck. Commit to a minimum amount of savings annually, and when you’re tempted to dip into them, remember that you’re taking away from future comfort and security.

2. Thinking for Yourself

   It may not ‘feel right’, but you have to put yourself first when it comes to prioritizing financial responsibilities. You’re probably used to taking care of others, especially close family members and friends, but this cannot come at the cost of a retirement where you’re dependent on others for financial support.

   If you have children and want to save for their college education, remember that student loans are much easier to get than any kind of funding for retirement expenses. If you’re providing financial support to anyone else, make sure they’re not just taking you for a ride and learn to say no if they are!

3. Understanding Investment Options

   You need to make sure you’re educated in terms of different financial vehicles and the value they offer, so you can make well-informed choices when you’re investing in them. Less than 10% of women actually believe they have sufficient investment know-how, and this lack of knowledge can lead to a major lack in financial security at retirement.

   If you are not confident about managing your portfolio, you will likely lean toward conservative investments, which means your savings will simply not grow enough to last you through retirement. Consult an expert for advice, since almost 65% of women who’ve spoken to an advisor feel more confident about their retirement savings!

4. Plan for Long-Term Care

   The average life expectancy of women is 81 years, compared to 76 years for men, which translates into greater chances of needing long-term care, for longer. Since single women generally don’t have financial support, it’s essential to plan for the costs of healthcare and related services, whether in nursing homes or at home.

   Long-term care (LTC) insurance is the best bet, allowing you greater independence in care options, but you can also consider hybrid life insurance plans or annuities that include LTC coverage. Plan for the possibility of being unable to make legal, financial or medical decisions too, and assign durable power of attorney to someone you trust. Otherwise, your life and estate may become reliant on someone appointed by the court or a distant relative.

5. It’s Never Too Late to Start

   While getting an early start is best, you need to remember that financial security is never completely out of reach, even if you begin late. This is especially noteworthy for women who’ve lost a spouse or survived a bad marriage, and feel like they cannot possibly make it on their own.

   Yes, it’s harder to save for retirement the closer you get to it, but giving up is the most destructive choice you could make. Take charge of your life, cut all superfluous expenses out of your budget (make a budget!), consider part-time jobs or longer work hours and look into shared living arrangements with others reaching for the same goal.