All the Single Ladies: Planning Strategies for Single Women

May 08, 2019
By Angela Baker, JD, CFP®, CLTC, CASL®

Growing old in America is not for the faint of heart. The number of people 65 and older living alone in the United States has grown since the last census was performed in 2010.1 In particular, twice as many women over 65 as men are living alone, and nearly half of women over 75 live by themselves.2

Why is this significant? Women, historically, have earned less than men, saved less for retirement, interrupted their careers to raise children or care for elderly parents, and they also typically live longer than men. Also, divorced women or those who choose to delay or never marry may be in a worse financial position than that of widows who usually inherit their spouse’s assets and healthcare benefits. Furthermore, women are now having fewer children, so there will be fewer family members to provide company to and care for women living alone.2

There are several areas to assess when planning for personal and financial security in your twilight years. We believe these should at a minimum include the following:

  1. Assess your income. What are your sources of income in retirement and how much can you expect to receive on an annual basis? Once you no longer have a salary, your income is limited to social security and investment withdrawals, as well as annuity or pension payments, if applicable.
  2. Assess your current health and family health history. How old are your parents, or how long did they live? How about your siblings, cousins? The longevity and health of immediate family members are factors you should consider when planning for future care needs.
  3. Assess your community. Are you able to safely walk most places you might need to go? Is there easy access to all the services you may need? Research the social services available, including the local area agency on aging, and learn the appropriate time to access them.
  4. Assess your support network. Are family members, friends, neighbors or others nearby? Are they willing and able to help out when you need assistance with household tasks or going to appointments? Will you need to hire caregivers and domestic helpers?
  5. Assess your home. Will you be able to safely age in your current home? Have you considered alternative living options that will meet your needs and are affordable to you? Other living options include life plan communities (previously called continuing care retirement communities), independent living communities, assisted living options, board and care homes, shared housing and nursing homes. You may need to make modifications if you stay in your home. Consider using available technology, including medical alert systems, to help you age in place.

After making these assessments, consider these financial planning steps in developing your strategy.

  1. Establish an emergency fund. Do you have funds available in an emergency without having to liquidate assets or use a credit card? We recommend that single women consider having 6–9 months of living expenses available in an emergency fund.
  2. Develop a long-term monthly budget. Because single women may be solely responsible for their financial and personal security, they should develop and stick to a budget. When budgeting expenses, focus on the sources of income, as identified above.
  3. Develop a retirement income strategy. Will you have sufficient resources to maintain your desired standard of living? Will you be able to accomplish your estate planning and legacy goals? What is the likelihood that you outlive your resources? Consider working with your West Financial Relationship Manager to perform this technical analysis.
  4. Protect your credit and identity. Check your credit reports at least annually and monitor your accounts and statements for suspicious activity. Should it become difficult for you to manage your financial affairs, consider working with a daily bill pay service company.
  5. Evaluate your insurance coverage. Consider the availability and type of health insurance coverage you have. Calculate what you will need to save each year for medical expenses not covered by insurance. Also, depending on your financial resources, consider long-term care insurance to cover the costs associated with extended illnesses that are not covered by Medicare.
  6. Prepare an estate plan. Do you have current estate documents? If you are ill or incapacitated, who will make decisions on your behalf? An estate plan can include a will, possibly a trust, a medical and financial power of attorney, and an advance medical directive. Make certain your beneficiary designations coordinate with your plan. The selection of fiduciaries and trusted contacts can be a dilemma for many single women. If you don’t have a sibling or close friend to be a trusted contact, you may want to consider an institutional trustee.

In working through your plan, make sure that you have a clear head and take time with the details. Communicate your end-of-life wishes with your trusted contacts and be certain they know where to find key documents. Remember to provide written authorization for your doctors to share information with your trusted contact person. Finally, keep active and eat well to maintain your physical and mental health. We all want and deserve to enjoy the life we have yet to live.

If you would like to discuss your strategy in greater detail, please reach out to a member of the financial planning department or your West Financial Relationship Manager.

Meet Angela Baker, JD, CFP®, CLTC, CASL®.

Referrals of family, friends and colleagues who may benefit from financial planning and investment management guidance are always welcome. Thank you for recommending our firm.

To view other articles in the May 2019 Financial Planning Focus newsletter, click here.


Important Disclosures

West Financial Services, Inc. is an SEC registered investment adviser. Registration does not imply a certain level of skill or training.

Information contained herein was derived from third party sources including, but not limited to, Bloomberg, Standard & Poor’s, Dow Jones & Company, the Federal Reserve Bank of New York, and Morningstar, Inc. While the information presented herein is believed to be reliable, no representation or warranty is made concerning the accuracy of any information presented. We have not and will not independently verify this information. Please contact us if you would like to obtain a copy of the third party sources.

1 Mark Mather, “Fact Sheet: Aging in the United States,” (US Programs: Population Reference Bureau: January 13, 2016) https://www.prb.org/aging-unitedstates-fact-sheet/ (accessed April 12, 2019).
2 Howard Gleckman, “New Snapshot of Older Adults in the U.S,” (May 4, 2018) https://www.forbes.com/sites/howardgleckman/2018/05/04/a-new-snapshot-of-older-adults-in-the-us/#496792e139d7.