The United States, surprisingly, has a new majority, and it’s single people. For the first time since 1976, when statistics were first kept and 37% of adults were single, there are more single than married people living in the US.
While this might not sound like a bad thing, the actual implications are enormous. The fact is, while being single definitely has its perks, there are more expenses and things can be a bit harder to plan for and plan around. For example, there is less financial flexibility, a bigger need for an emergency fund and the right insurance is necessary as well.
Let’s take a look at some of the financial challenges that singles in the States have these days, and some of the biggest financial risks they face. Enjoy.
1) Not saving enough money. As many young people are waiting to get married and then have kids, many end up in their 30s and 40s facing retirement planning, saving for a house and saving for college all at once. Since many people in their 20s don’t save a lot, if at all, it can become financially difficult, especially if they are trying to maintain a new household while paying off student at the same time.
2) Trying to figure out long-term care. Long-term care in the United States, for example a private room in a nursing home, can cost over $100,000 a year. Young people generally don’t look at long-term care insurance but waiting until they are in their 40s or 50s is a bad idea because more will be declined long-term care insurance. Women especially, who tend to live longer, should consider getting long-term care insurance when they are younger.
3) The financial risks of divorce. The divorce rate for people 50 years of age and older has doubled since 1990, with more women than men initiating divorces later in life according to the AARP. The biggest problem is that these divorces, in many cases, destroy their finances because they are so costly and they are forced to split their assets before retiring. In fact, financial planners are under the opinion that women who do their best to keep the family house after a divorce are actually taking on a long-term burden rather than getting a benefit.
4) Being a single senior. While the idea of dying alone can certainly be terrifying for many people, recent studies suggest that seniors who are also single are actually just as happy and even more social than their married peers. The problem however is that many don’t have their documentation, including healthcare proxies and power of attorney, in place. In order to avoid spending copious amounts of time and money in the courtroom if you become sick or disabled, having those documents filled out is vital.
As you can see, there are a number of risks that single people have over their married peers, especially as they get older. There are perks yes, but there are also risks. That isn’t to say that being married is any less risky, but just that there are a number of other factors that need to be kept in mind. If you’re single and approaching retirement, seeking out a financial planner to help you is probably a good idea.