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    retiring when you're single

    August 24, 2011 Posted by: Tech CU

    Whenever we talk about retirement or hear about different retirement plans, there is often the assumption that the retirees in question are a couple. 401(k) brochures tend to show two gray-haired people smiling together as they look out from their lovely vacation home (due to their effective long-term planning). With the marriage rate decreasing in the US and more and more people opting not to choose this traditional course, however, there is a growing group of singles who need to be prepared for their own later years — without the fallback of another income.

    As one person, you clearly need fewer savings for a healthy retirement, but you’ll also need to be a bit shrewder during your active working years. A couple of suggestions from the experts:

    • Ideally, try to save 20% of your pre-tax income. This helps to ensure that you have a well-funded retirement account (IRA, 401k, etc.) as well as at least 6 months of savings to fall back on in the event of an emergency.

    • Make sure you have very good disability insurance. With no one to depend on financially, if you become injured or sick and can’t work for a period of time – you’ll need comprehensive coverage. If you’re signed up for a plan through your work, confirm the extent of what you’ll receive. Consider a secondary policy to make up for any shortfalls.

    • Work with a lawyer to draw up a “durable power of attorney” document. It is key to determining who will make decisions for you and have access to your bank accounts should you become incapacitated. It could simply entail someone paying your bills for you while you’re in the hospital, but as a contingency – this one is critical.

    Sure, there can be lots of perks to being single – no one to pick up after or fight over the remote with. But, when it comes to retirement, it’s all on one person. Planning well and thinking ahead can help make the later years as smooth as possible.

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