Season 2 Episode 13: Financial planning for single people
Apr 3, 2023
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Explore the financial challenges single individuals face, from retirement planning to estate considerations. Learn about the importance of adequate insurance coverage and updating estate plans to avoid disputes. Delve into the nuances of estate taxes and strategic planning for singles.
Single individuals, especially women, face unique financial challenges in retirement planning due to societal shifts and disparities in wealth and earnings.
Tax-efficient retirement planning strategies, such as contributing to deductible IRAs and HSAs, are crucial for single individuals to optimize savings and minimize tax liabilities.
Deep dives
Financial Challenges and Trends for Single People
A significant portion of the podcast episode focuses on the financial challenges and trends faced by single individuals, particularly women. The episode highlights a shift in societal expectations around marriage, leading to a higher percentage of divorced, widowed, or single individuals. Statistics from census data show a significant increase in single individuals, especially women, who are choosing to remain unmarried by choice. Despite this trend, single women tend to face financial disparities, earning less and having lower wealth compared to their male counterparts. The episode emphasizes the importance of addressing the unique financial challenges that single individuals, especially women, encounter in achieving financial security and saving for retirement.
Strategies for Financial Planning for Single Individuals
The podcast episode provides insights into essential financial planning strategies tailored for single individuals. One key strategy highlighted is the importance of saving for retirement, emphasizing the need for single individuals to take ownership of their financial future due to the absence of a partner to rely on. Managing debt, particularly high-interest credit card debt, is also emphasized as a crucial aspect of financial planning. The episode discusses the significance of building an emergency fund to safeguard against unexpected financial crises, stressing the need for single individuals to have a sufficient financial cushion given their lack of a backup plan in one-income households.
Tax-Efficient Retirement Planning for Single Individuals
The episode delves into tax-efficient retirement planning strategies for single individuals to reduce their taxable burden and enhance their retirement savings. It highlights the benefits of contributing to deductible IRAs and health savings accounts (HSAs) to lower tax liabilities and save for retirement effectively. The discussion also touches upon utilizing 529 plans in certain states to leverage state deductions and enhance tax savings. By employing these tax-efficient strategies, single individuals can optimize their retirement savings and minimize tax obligations.
Importance of Estate Planning for Single People
In the realm of estate planning, the episode emphasizes the essentiality of creating robust estate plans for single individuals to address critical decisions in the event of incapacitation or passing. Key documents such as durable power of attorney and medical power of attorney are highlighted as pivotal tools for empowering trusted individuals to make financial and healthcare decisions on behalf of single individuals. Furthermore, the discussion underscores the significance of clear communication and comprehensive estate plans to ensure that personal wishes are honored and financial assets are managed effectively in line with the single individual's goals.
Single people face a unique set of challenges when it comes to financial planning. Jean is joined by wealth planner Rose Niang in this episode of Edelman Financial Engines’ Everyday Wealth™, to discuss those challenges, including health care, emergency funds and retirement planning, and how to help navigate them. Later in the episode, Erin Smith, director of estate planning at Edelman Financial Engines, joins the conversation to explain the biggest considerations that single people have to make when it comes to estate planning, and which important documents are essential to have in place when you’re single.
Ms. Chatzky receives cash compensation for acting as host of the Everyday Wealth podcast and for related activities and therefore has an incentive to endorse Edelman Financial Engines and its planners. That compensation is a fixed sum paid on an annual basis; and reimbursement for certain expenses. The amount paid each year does not vary, is not based on show content or any results-dependent factors (e.g., popularity of the show).
This show is pre-recorded, and any callers are pre screened.
The information being provided is for informational and educational purposes only and should not be construed as investment advice. You should consult with a financial advisor to help determine the best options for your particular circumstances.
The information regarding estate planning should not be construed as tax or legal advice and is for general informational purposes only. Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to include your qualified tax and/or legal professionals in these discussions and decisions to help determine the best options for your particular circumstances.
Neither Financial Engines Advisors L.L.C. nor any of its advisors sell insurance products. Edelman Financial Engines affiliates may receive insurance-related compensation for the referral of insurance opportunities to third parties if individuals elect to purchase insurance through those third parties. You are encouraged to review this information with your insurance agent or broker to determine the best options for your particular circumstances.
