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How to Plan for Retirement as a Single Person


Planning for retirement as a single person involves a unique set of challenges. But, with a clear understanding of your finances and an individualized approach to financial planning, you can secure a comfortable retirement. Here’s a breakdown of what you should consider when planning for retirement.   

A financial advisor can help you create a financial plan that is tailored for your specific needs.

General financial advice can be a great starting point to get information about creating a retirement plan. But, American workers are looking to financial professionals to get more individualized advice. 

According to a 2023 work study from Morgan Stanley, almost three out of every five employees (56%) say that getting retirement planning advice from financial professionals is a high priority when choosing employment. 

And similarly, another study shows that 40% of women who work with a financial professional also feel “very prepared for retirement.” 

These studies reinforce the idea that each individual has unique financial challenges, and therefore your retirement plan should also be tailored to your needs.

How to Create a Retirement Budget for Individuals

A key component of your retirement plan is to create a well-structured budget. This involves taking stock of your finances, which includes estimating how much money you will have from savings, investments, pensions and Social Security. 

You will also have to estimate how much you will need to pay in retirement costs and adjust your budget frequently for inflation and other unexpected expenses.

A common way to build a retirement budget is by using the 50/30/20 rule, which breaks down your income into three categories: 50% goes to needs, 30% to wants and 20% to paying down debt or savings. 

Breaking down your budget in this way can help you get a clear idea of your finances. And you can make adjustments as you follow through on goals.

Additionally, your retirement plan will also require you to manage your investment portfolio. The income from this portfolio will be included in your budget. And once you get a breakdown of these investments, you may have to rebalance them to minimize risks and maximize returns. An asset allocation calculator can help you do this based on your specific risk tolerance and time horizon.

How to Tailor a Retirement Plan for Your Individual Needs

Single man prepares for retirement

When you put a retirement plan together, you’ll need to consider different factors that will impact your finances. Here are three things that could affect your retirement:

Prepare for healthcare costs. According to the Administration for Community Living ( ACL), an individual turning 65 today will have almost a 70% chance of needing some type of long-term care services. 

Services can vary from person to person and change over time. But for those who need long-term care, they will average three years. Women will need 3.7 years of care and men average 2.2 years. 

The ACL says that while one-third of 65-year-olds today may never need long-term care, 20% will need it for more than 5 years.

Maximize your Social Security. Social Security will only cover a part of your expenses. But it is an essential component of your retirement income. And, if you plan to retire early, you may still want to delay your Social Security benefits. You can start collecting at 62, but those benefits will be reduced to 75% of your eligibility. 

According to the Social Security Administration, if you retire at full retirement age in 2023 (for those born in 1960 or later full benefits are payable at 67) you could earn a maximum benefit of $3,627. But if you retire at 62, your benefit will be cut to $2,572. And, if you can delay your benefits until 70, it jumps up to $4,555.

Plan your estate. Estate planning involves creating a will, setting up trusts, and determining beneficiaries and executors. According to AARP, 19% of adults 72 and older and 42% between ages 53 and 71 do not have a will or living trust. 

Additionally, as an individual, you may want to entrust someone with a financial or medical power of attorney or as the executor of your will.

Estate planning services also include establishing guardians, appointing beneficiaries, making funeral arrangements and scheduling charitable gifts, among other end-of-life preparations.

Bottom Line

Single man plans for retirement

General retirement advice can help kick off your retirement planning, but each individual faces unique challenges. And you will need to have a clear idea of your finances to prepare for specific needs.

Financial Planning Tips for Individuals

  • A financial advisor can help you develop a retirement plan for your individual needs and goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you have saved up money and are on the fence between paying off debt or investing, this guide can help you prioritize these competing financial goals.

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