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Single Women Over 50 and Retirement Planning

Single Women Over 50 and Retirement Planning
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BY STEVE NUBIE

There’s a stereotypical assumption that men in a relationship do all of the retirement planning.  That’s certainly not the case for single women. 

A variety of factors can require a woman to take control of her retirement planning. Some women never married while others are either widowed or divorced.  There’s a need to step back and think about planning for retirement and there are various facts, tools and information you might want to consider as you put together a retirement strategy.

To begin with, women typically are at a disadvantage when it comes to retirement savings. Based on data from the U.S, Census Bureau, women make 78 cents for every dollar that the average male worker receives. But there are ways to continue to boost retirement savings depending on your employment situation.

Many companies offer to match up to 3% of a 6% retirement contribution to a 401K or other retirement plan. You could also open an IRA and depending on your age make larger and larger contributions on an annual basis that is not taxed as income. And while voluntary contributions to a retirement plan are not taxed as income up to certain limits, even if you exceed the limits and are taxed it could help to jumpstart a retirement plan if you can afford to do it.

A smart widow’s strategy

Life insurance from the death of a spouse should be managed carefully and you can dedicate a percentage of the death benefit to a retirement plan if you choose to do so. Here are some facts about death benefits and how they are taxed and treated once they have been disbursed.

Divorced and on your own

According to the Social Security Administration, if you are divorced following at least 10 years of marriage, and your ex-husband has passed away and had never remarried -you are eligible to receive his social security benefits.  This assumes his payment would be have been higher than yours and you can only take either his payment or yours, you can’t receive both.

A divorce settlement and alimony should also factor into retirement savings. These funds would be subject to the retirement maximum based on your age but a portion should be set aside for retirement.

A single mom’s dilemma 

A single mom faces considerable challenges while trying to work and raise children.  As much as you want to pay for your children’s college you should seriously investigate FAFSA loans and grants for college and make sure you continue to save for your retirement. Many parents are paying off their own school loans well into retirement and the burden of paying for your children’s loan, or simply surrounding your savings for their college can create significant challenges in retirement.

You should also get a copy of your Social Security Statement. It’s easy to do online at the Social Security website. Once you’re registered you can quickly access your past contributions and estimates of future payments depending on your retirement age.  You can also continue to monitor the funds over time and use those numbers to estimate your total monthly in addition to income from pensions, 401K’s or other sources.

Never married and close to Retirement

Single women who have never married often have better cash flow given the reduced responsibility and cost of raising children. As much as possible a single woman should contribute to a retirement plan, manage her savings and anticipate spending and savings as she reaches 50 and looks towards retirement.

Considerations related to monitoring social security benefits and lifestyle down-sizing should also be considered.

Widowed and without a clue       

There are tragic circumstances when a spouse dies suddenly and unexpectedly at a relatively early age. As a couple they always meant to sit down and discuss finances and financial planning but never got around to it.  The result is that many women find themselves at a loss when they depended on their husband to handle the finances including retirement planning.

Anyone in this situation should contact their husbands former employer. HR departments are very sensitive to situations like this and can not only offer advice and information about a spouses corporate retirement plan, but may even recommend a financial advisor to sort out current savings, investments and future financial and retirement planning.

If the widow’s husband was a veteran she many also be eligible for aid and assistance through the Veteran’s Administration.

The planning is similar for all single women 

What’s critical is to have plan in the first place. You can use some of the links to resources in this article to get started, and a financial advisor my be worth consulting from time to time sort out the options and timing.

Ultimately your future and your retirement is in your hands. The better you can anticipate and understand the dynamics the happier and more secure you’ll be.

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