Thursday, September 01, 2016

Planning for Singles

Written by  Woody Derricks, CFP®

Most of my articles have been geared towards couples, yet individuals have financial concerns as well.  In a relationship, generally, one person handles most of the financial planning and money issues. But what happens when the spouse who actively managed the couple’s assets and financial future is no longer the decision maker? The less experienced spouse has to step up to the plate, usually with little or no warning. Because this transfer of responsibility is often occasioned by death, disability, or divorce, it can be an emotionally challenging time. Yet critical decisions concerning investments, insurance, financial, and estate planning need to be made to avoid or minimize financial hardships later.

Insurance: Typically, when we think of insurance, we think of life and/or long-term care insurance.  While it may be necessary to carry some of those types of insurance, singles often don’t require as much coverage as a couple may.

Without dependents to provide for, should a death or long-term care event take place, it’s not normally a priority for singles to spend the money on insurance simply to provide a larger inheritance to adult children, extended family, or friends.

One area of insurance that is especially important for singles is disability coverage.  Because you are self reliant, you need to protect your income.  If you suffered a disability and didn’t have sufficient savings, the disability could prove to be financially catastrophic.

I suggest that you consult your human resources department about group disability coverage and your financial advisor about supplemental insurance. While open enrollment may not be until the fall, knowing your options now will help you prepare for you benefit elections. You may decide to apply for individual coverage and be declined. In which case, the group coverage may be your only option for disability insurance.

Retirement Planning: When it comes to retirement, you can’t start planning for the future soon enough.  Again, because you’re relying on your income and savings, it’s important to assess your needs and begin saving.

Estate Planning: In order to make sure that your estate is disposed of properly, consider getting a basic estate plan in place-at a minimum.  A basic estate plan begins with naming the beneficiaries on your accounts.  Many singles (without children) name parents, siblings, or nieces/nephews as beneficiaries of their accounts.  Your parents may already be retired and your siblings may not need the money.  If that’s the case, you could consider donating a portion of your estate to a charity.

The next piece of an estate plan is getting a Will.  While a Will does not bypass probate, it will help the court transfer your estate per your wishes.  If you do not have a will, the probate court will create one for you.  Typically, the court’s will passes assets on to your closest living relatives. This may or may not be your desired result.

Arguably the most important part of an estate plan for singles is getting a Power of Attorney in place for health care and financial issues.

In the Power of Attorney, you’ll name someone to handle your health care and/or financial matters should you become incapacitated.  Without these documents, your family may have to hire an attorney and present to a court why a particular family member should be in charge of your wellbeing.  This may not be the person you would select.

In order to protect yourself and prepare for the future, you need to act.

Woody Derricks, CFP®

Woody Derricks, CFP®

This article is for informational purposes only and is not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation. Securities offered through LPL Financial, Member FINRA/SIPC.


Leather Heart Foundation

ME Magazine Online | Quarterly Gay Men's Journal

Feature Photos...


We are an award winning independent free news publication published every-other Friday, distributed free in Maryland surrounding Baltimore, parts of Southern PA, and Rehoboth Beach, DE. Contact us at

RSS Feed | Top Headlines | Baltimore OUTloud
PO Box 4887
Baltimore, MD 21211
Office: 410-244-6780
Advertising: 410-802-1310