MichaelHam's  Instablog

Do you ever feel like you’re on Noah’s Ark; everyone is matched up but you? One can get that same feeling when reading about retirement planning and budgeting advice.

Seems like the majority of information focuses on couples, rarely the single guy or gal. What’s even crazier is the increase in single retirees in the past ten years. Would you believe that according to the Census Bureau, about 35% of 50 to 54 year-olds were single in 2010, up from almost 29% in 2000. Among 55 to 64-year-olds, 33% were single in 2010, versus 30% in 2000. Factoring in both age groups, that’s about one more single out of ten. Whether these statistics are due to increases in divorce rates or the proportion of the population that never married, it’s extremely important that these individuals take extra precautions to ensure a secure retirement.

Most couples have two incomes and share the expense of one home, utilities and cable bills. Married couples have a back up person to help carry the load (at least hypothetically). The lone ranger single person has to carry the load for saving and unforeseen setbacks on their own. Thus, the cost of living for single retirees is about 40% to 50% higher than for empty-nest couples, which is why it’s recommended that singles save at least 15% of their pay for retirement. The most important elements that singles should take into account while preparing for retirement is safeguarding their nest egg from creditors and predators. The chances of becoming of unemployed or disabled and it affecting household income are more than 50% greater than married couples. Start with these three things to protect yourself:

PROTECTION: Safeguard your nest egg. Finding any job in this economy can be tough, let alone a job with decent benefits or one that comes with an increasingly elusive traditional pension. But when you have a choice, opting for a position with good benefits can give you more financial security. If you can’t find a job with a pension, shoot for one that has a 401k with a match. Even though Pensions are attractive, over the long haul, disciplined savers can actually accumulate a bigger retirement benefit with a 401k than they could with most traditional pensions.

LIFEBOAT DRILLS: Prepare for unemployment. You never know when your “pink slip” will arrive. Stay “ready” by first paying off as much debt as possible and of course, not adding any lavish purchases. You can purchase mortgage insurance that will keep your mortgage current in case of job loss but you need to get help from a professional to see if that makes sense for your situation.

CRAP SHOOT: Feel lucky? The chances of you needing disability income are much higher than needing life insurance! While both life and disability insurance are the best ideas, In the event of an illness or injury, disability insurance replaces a set percentage of your income for a certain period of time. But for single adults, replacing their income with less than the full monthly amount can be a tough pill to swallow. Some money is better than “no” money but an additional reserve is mandatory for your full sense of financial security.

Lastly, long term care will be something that one out of two retirees will need in America. Newer types of life insurance called Hybrid policies now offer both a benefit to build a tax-free retirement income stream and a much higher monthly amount in the case of needing help with some of the daily living personal chores. Hybrid life insurance policies can almost be like having your cake and eating it too. The sooner you check into these types of insurance, the better your chance to be able to obtain coverage and at affordable cost.

What’s the biggest mistake made by single retirees? Not using available resources to help with selecting the proper types of investments and insurance plans to suit your individual situation. In many cases, you are already paying for the help, but you generally do not know how to access it. If you have questions on how to get your answers, contact www.mymoneytrack.com.