Why Solos Need a Financial Plan

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Why Solos Need a Financial Plan

By Allen Davis, CFP

More than two-thirds of singles do not have a financial advisor, according to a recent survey. In fact, they are more than twice as likely as marrieds to say they hadn’t spoken to anyone at all about retirement.[1]

Yet it’s particularly important to get started on financial planning if you don’t have a spouse, partner, or children.  Whether by choice or chance, you have sole responsibility for yourself, without someone else’s income or savings as a cushion.  You’re likely to make major life decisions on your own, without a built-in sounding board. And, as you get older, you may need to pay for care and services that a partner, spouse, or adult children often provide a close family member for free.

It’s no wonder that Solos (i.e., adults without a spouse, partner or children to help them as they age) report greater anxiety about their financial futures than married folks.[2]

But you don’t have to sort things out all by yourself. Working with a financial planner can help you clarify your situation today and see a forecast for the years ahead. Developing a financial plan can reduce your anxiety about the future. It will also help others who someday need to understand your financial situation, whether as professionals (such as an estate attorney or eldercare advisor), friends, extended family members, or heirs.

A financial plan can provide:

  1. Decision Support

Aging presents everyone with a series of challenging decisions such as:

  • Should I sell my house? If so, when?
  • Is it time to stop working completely or do I need to continue to produce income?
  • What should I do if (when!) the markets tumble?
  • Can I afford that cruise I’ve been wanting to take for so long?

Solos may struggle making such decisions alone and in the dark.  A well-designed financial plan explains how changing expenses will be covered and identifies the financial sources available in an emergency – it can help turn on the lights.

  1. A Balance Sheet

Lawyers, banks, and government programs often require an up-to-date listing of your assets.  These facts are captured as part of the financial planning process to create an up to date personal Balance Sheet, ensuring that neither you nor anyone else will have to search for this information again.

  1. A Long Term Care Plan

For Solos, there is perhaps nothing more important than planning for the potential need for care. In the vast majority of cases, long term care services are received at home, provided by family members. Without that default plan, Solos need to create one from scratch, and paying for that care (using investment, governmental, and insurance strategies) is an essential part of the financial planning process.

  1. A Secure Personal Vault

Your financial plan can also include a password-protected, electronic vault for important papers such as your will and trusts, deeds, insurance policies, investment reports, pension and Social Security information. Having this ready, organized access is great for you, and is a tremendous gift to those helping you.

  1. A Philanthropic Plan and an Ethical Will

A financial plan should be a reflection of personal values. It should include lifetime and estate strategies for supporting organizations and initiatives that are important to you. Adding an Ethical Will allows you to share your life lessons and hopes for the future and contribute to the creation of your legacy.  This entire process can address a haunting question especially for people who haven’t had children, “Who will remember me when I’m gone?”

Solos don’t need to feel more anxious than others about their financial security.  Hiring a financial planning firm can give them a team to rely on for information and support. It can also eliminate the fog and worry that might otherwise cloud their view and prevent action.

  1. Living Single in America, 2016 Planning & Progress Study, Northwestern Mutual Life.
  2. Living Single in America, 2016 Planning & Progress Study, Northwestern Mutual Life.


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