There are millions of individuals who remain single lifelong while there are also many who find themselves forced to live as singles because of divorce and death of their spouses. In addition to unique circumstances that these singles find themselves in, they also have different financial considerations that they need to keep in mind. According to financial experts, there are major differences in the way these singles need to plan for their future or retirement. What is financial planning is a question often asked by individuals living as singles as they are not aware of the tools of investment meant especially for them.
Financial planning for singles can be very simple but also complex
If you are a single, you can obviously choose the way you want to live life after retirement as you do not have to think about your spouse and kids. This is one aspect of financial planning as a single that makes it simple for you. You can stick to the chosen path of savings as there is no one to criticize or challenge your financial plan. However, it also means that you do not get the point of view of a companion that can be very comforting and also profitable.
Higher taxes and lower income
Of course you can live easily on your income with your monthly budget being much less than a couple. But you are forced to pay higher taxes as a single and your savings, if you opt for 401k, are much less than the savings of a couple with both individuals working. You must maximize your returns from your 401k by matching the contributions made by your employer. This could be difficult given the present inflationary measure but you must cut down on expenses that are avoidable.
Think about your dependants
You may not have a spouse but you cannot ignore the necessities of your old living parents. You could also have a live in partner. Do not forget to mention the names of such people as your beneficiaries in the insurance policies that you have bought for yourself. As a single individual, you need to make a will, mentioning the names of the beneficiaries to avoid disputes after you are gone. Your financial plan should include the names of such dependents.
Attorney to speak on your behalf
If you are a single, there is no one to take care of your legal matters or to speak up on your behalf. On the other hand, your spouse can take decisions on your behalf when you are married. You must keep an emergency plan ready in case you become incapacitated. This plan should mention the names of your health care provider and a legal expert who you plan to appoint your power of attorney.
What is financial planning becomes easy if you keep in mind the tips given in this article.