Wealth Planning for Newly Single Women Over 50
Teds thoughts
Now that you are in your 50s you might be saying to yourself – “How the heck did I get to be 50 when high school feels like 5 years ago?” It’s a blink of an eye. That’s why the many points this article makes are so important to take to heart. You are on the doorstep of looking towards retirement. This means you need to button down your checklist of crucial items in your financial world.
My clients who are 50+ years young will often ask me if making changes in their lives can impact their retirement years. The answer is a resounding YES! Don’t put off getting into good habits or meeting with your financial advisor to make sure you are addressing all of the elements that will contribute to your successful retirement.
Women in their 50s and 60s who are newly single—typically due to divorce or the death of a spouse—can run into unique wealth planning challenges. Below are a few complications newly single women may face and ways that you can thrive in your newfound financial independence.
Planning for Retirement as a Newly Single Person
If you’re a woman who is newly single in your 50s and 60s, you may need to adjust your retirement planning to ensure that you’re now on track as a single person, rather than a couple. Retirement as a single person vastly differs from that of a couple and can entail a number of changes. For example, if both spouses had retirement savings in IRAs and 401(k)s, that amount is now limited to account balances of one person. There are a few issues you need to consider pertaining to your retirement.
Is Your Retirement on Track?
There are a lot of variables in making sure you’re on track for retirement, which includes your own retirement savings balances. You should also consider any amount you might receive from your ex-spouse’s retirement plan as part of a qualified domestic relations order (QDRO) in the event of a divorce or any life insurance proceeds if your spouse has died. It's important to take advantage of all opportunities to contribute to your own workplace retirement plan. Women 50 and over can also contribute extra amounts as catch-up contributions each year.
Claiming Social Security Benefits
It’s important to understand the process for claiming Social Security benefits, wherever applicable to the situation. Should you claim your own benefit, a survivor’s benefit in the case of a widow or a benefit based on the earnings record of your ex-spouse in the case of a divorce? Variables such as whether or not you’re still working will play a big role in your decision.
Managing Investments
Managing investments and retirement assets as a single person can be especially challenging if you weren’t previously involved in this aspect of you and your spouse’s financial life. It can also be an issue if you and your spouse hadn’t disclosed to each other which assets were held in each person’s account. You’ll now need to assess what you have in terms of investment assets and ensure this money is properly allocated for your own financial safety and growth.
Long-Term Care and Healthcare
It’s important to formulate a plan for long-term care in retirement, if necessary. This includes looking at retirement communities and ensuring you have a plan to cover healthcare costs during your pre-retirement and retirement years. If you’re employed, you may be able to move onto your employer’s plan or consider Medicare coverage if you’re 65 or older.