Published On
October 19, 2015

Those who are unmarried have unique financial circumstances that should be considered.

Differences in Retirement Planning for Those Who Are Unmarried Should Be Examined.  It’s easy to assume we’re all using the same playbook. Why would saving and investment differ for those who are married vs those who are single? Shouldn’t we all save early and often? Select quality investments? Keep an eye on the tax consequences of our decisions?

Of course, we should all do these things, but some issues vary for those who are unmarried. In addition to their unique needs, those who are single are often managing their finances without the benefit of a spouse to for discussion of financial matters. Couples often hold one another accountable for financial matters and share ideas with one another. In addition, couples comprised of a spender and saver personality often find that the different approaches (though occasionally the source of disagreement) often leads of a reasonable moderate financial strategy balancing current wishes with the need to prepare for the future.

Let’s address some of the unique issues that may affect those who are single when planning for retirement.

Retirement Savings Must Come from a Single Income. Single investors must build their retirement savings from one income. This can offer less flexibility than that experienced by married couples saving for retirement. While saving more will certainly help, starting early and saving consistently are great ways to ensure retirement goals can still be met.  

Social Security Filing Options are Important. Social Security Benefits for those who are unmarried are based on the lifetime earnings of the recipient. This differs from the additional options held by married couples, who may claim their benefit based on their own earnings record or that of their spouse. For this reason, the choice of when to claim becomes even more important. An estimate of Social Security Benefits can be found by creating an account or logging in at and reviewing your estimated benefit. You can compare your estimated amounts at full retirement age, early retirement, or if you defer until age 70. Those who are unmarried should consider their ability to postpone benefits to receive a greater payment as well as how this decision may affect their overall financial plan.

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Long-Term Care Insurance is a Potential Need. Long Term Care insurance is an important financial priority. Unmarried individuals may not receive assistance from a spouse or children and should thus consider this option even more carefully. Since long-term care is not covered by Medicare, a private insurance policy is often needed. The number of companies offering coverage can be sparse in some areas, but you should examine all of your options and review competing quotes before making a decision. In addition to getting quotes from a reputable agent who works with quality companies, you should consider “partnership plans” if offered in your state. These plans allow additional coverage through Medicaid once the benefit period of the insurance policy is over without requiring the insured to spend down their assets to qualify.

Housing May Be Your Largest Expense. Housing is a large expense for almost everyone, but those who are single are unlikely to pay half the cost someone who is married. This can make housing a larger portion of their overall expenses. Those who are single should pay special attention to their housing costs and consider trying to limit this expense, potentially freeing additional funds for retirement savings, paying down debt or other expenses. Some strategies may involve reconsidering the amount of space you actually need and potentially getting a tenant for any unused rooms.

Saving Presents a Challenge when Unmarried. Let’s face it. Saving is always a challenge for anyone, married or single. There are some notable additional challenges for those attempting to save while unmarried, specifically that they may have a less advantageous federal tax situation. Couple this with the additional expenses that are paid individually rather than shared with a spouse and it can seem daunting. This is all the more reason to save as soon and regularly as possible.

Taxes Pose a Challenge. While it is true that some married couples will pay more in federal tax than those who are single, for most this is not the case. Those attempting to save for retirement while single will want to pay special attention to their tax situation and plan during the year to put themselves in the best possible situation when it’s time to file their return. Are you taking advantage of your all available deductions? Are there additional tax-advantaged ways to save for retirement? Are you eligible for any tax credits?

Those who are willing to tackle these issues early on and remain consistent in their commitment to their retirement will still have an excellent chance of meeting their goals.

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