In 2021, the United States Census indicated that there were over 37 million one-person households, or 28 percent. This represents a significant rise that’s only expected to continue. For example, in 1960 one-person households only represented about 13 percent of households in the U.S.
There are many reasons for this, of course, including divorce and the death of a spouse. Plus, the percentage of adults living with an unmarried partner also inched up over the past decade, from 7% to 8% demonstrating a consistent change in the way couples today view marriage. However, one thing unmarried people seem to have in common is that their planning needs can be quite different from those of married couples. And, many singles are unprepared for retirement.
For example, singles often cannot take advantage of certain tax breaks, such as filing jointly, that are available to married couples. And, the cost of living for a single person is not 50 percent of that for a couple. A more realistic figure is between 60 and 80 percent, unless the single downsizes his or her home, or finds a roommate. In fact, according to the Joint Center for Housing Studies of Harvard University, by 2035 roughly 11.5 million renters will be 65 and older and seeking help covering their bills.
Singles may also feel a greater need to purchase expensive long-term care insurance because there is no spouse to serve as a caretaker in an emergency or over the long term. Plus, in the event of a medical emergency, unmarried couples should seriously consider appointing a healthcare power of attorney so that your wishes are respected in the event that you are incapacitated. Without this document, even your partner will be unable to ensure your wishes are honored and may even experience great difficulty receiving basic information about your condition.
Recently divorced retirees can face a slew of challenges as well. For example, alimony payments designed to cover a former spouse for life may disappear if the former spouse who was making them passes away. Additionally, owners of life insurance policies name the beneficiaries and singles who don’t own a shared policy may find themselves without any benefits at all if an ex-spouse changes the beneficiary designations. However, it’s important to note that there may be certain benefits available to divorcées, such as eligibility for an ex-spouse’s Social Security benefits. For example, if the marriage lasted ten years or more, the divorced spouse can receive these benefits even if his or her ex-spouse has remarried—with no impact on the ex-spouse’s benefits.
Given the unique planning challenges faced by singles, it is important to consult with an experienced estate planning attorney. If you are single, Attorney Susana Lannik, of Lannik Law, LLC is an experienced estate planning attorney who can help you design a plan to meet your particular needs. We’re here to help.