Single people have financial considerations that differ from those who are married. But this doesn’t mean they should overlook financial planning. Unfortunately, many do. Don’t make this costly mistake.
Financial and estate planning help you protect your earnings and your property. For single people who do not have someone to fall back on, planning for unexpected financial setback is especially important.
Protecting your earnings (your ability to provide basic needs for yourself and your dependents) should start with creating an emergency fund that could pay for your basic living expenses for six to twelve months. The fund should be separate from your other investments, readily accessible, and reserved solely for emergency use.
Insurance is an important factor when it comes to protecting your income. Disability insurance provides a steady income stream when you’re sidelined by illness or injury. Employers frequently offer disability policies, but they are also available through private insurers. Life insurance may not be a priority for you if you do not have dependents, but if anyone relies on you financially, a term life insurance policy would offer an income stream to your loved ones in the event of your death.
Asset protection is more complex. Through powers of attorney, you can appoint trustworthy people to make financial or medical decisions for you in the event you become incapacitated. By creating a will (and perhaps a trust) and naming beneficiaries for your IRA or 401(k) plans, you can ensure that your assets will go to the individuals or charities of your choice.
Your financial planning needs are unique. If you’d like to learn more about protecting your finances and property, let’s talk.