AFCU Blog

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What you need to know about retiring alone

Entering your golden years without a partner at your side can be lonely. It can also be financially frightening.

Without a spouse, you won’t have spousal Social Security benefits, life insurance payouts, or the preferential tax treatment that married couples receive. That doesn’t mean you need to find the first available partner and get hitched. There are many strategies that are easier for single people to execute than their married counterparts.

Here are three steps you can take to make your retirement years safe and secure.

 

  • Start saving now – More than 40% of unmarried women, and 34% of unmarried men, have saved less than $1,000 for retirement. Don’t let this be you: Start saving now!

    You can start small by trying a dollar-a-day saving challenge for 30 days. Use that money to start or add to a tax-advantaged retirement account, like an IRA.

  • Choose your accounts wisely – Married couples have a larger pool of assets and supplemental income streams in case they outlive their savings. Singles don’t have this cushion, and therefore need to be more careful in their selection of retirement vehicles.

    Look for guaranteed sources of income, such as lifetime annuities and defined benefit plans. Major medical problems also pose a more significant challenge without a partner to take care of you. You might need to hire a home-health aide or move to a residential facility.

    Long-term care insurance can be an excellent way to protect yourself against these costs. Similarly, keeping a robust Health Savings Account (HSA) can help save on taxes now and pay for medical expenses later.

  • Take advantage of the opportunities – Being single at retirement has its benefits, too. You can move to a retirement community of your choice, lowering your cost of living and extending your retirement savings. You’re also free to start a small business using your workforce skills. This can help you maximize your tax benefits while also bolstering your income over those early retirement years.

    Your estate planning has many more options as well. Without a partner depending on your assets when you’re gone, you can dedicate your remaining savings to a cause that’s important to you.

 

You owe it to yourself to see what benefits are available to credit union members. Call, click, or stop by Acclaim Federal Credit Union today!

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