Planning for Single Parents
It is a challenge –
and it must be met.
Provided by MidAmerica
How does a single parent plan for retirement?
Diligently. Regularly. Rigorously. Here are some steps that may help, whether you are just
beginning to do this or well on your way.
household budget can be a wise first step. Most households live without budgets –
and because of that financial inattention, some of the money they could save
and invest routinely disappears. When you set and live by a budget, you
discipline yourself to spend only so much and save (or invest) some of the
rest. You need not track every single expense, but try and track your expenses
by category. You may find money to save as a result.
If you are starting from scratch, creating an emergency fund should be the
first priority. It should grow large enough to meet 6-9 months of living
expenses. If no financial emergency transpires, then you will end up with a
cash reserve for retirement as well as investments.
want to invest less aggressively than you once did. Young, married couples
can take on a lot of risk as they invest.
Divorcees or widowers may not want to – there can be too much on the line,
and too little time left to try and recoup portfolio losses. To understand the
level of risk that may be appropriate for you at this point in life, chat with
a financial professional.
be great wisdom in “setting it and forgetting it.” Life will hand you all
manner of distractions, including financial pressures to distract you from the
necessity of retirement saving. You cannot be distracted away from this. So, to
ward off such a hazard, use retirement savings vehicles that let you make
automatic, regular contributions. Your workplace retirement plan, for example,
or other investment accounts that allow them. This way, you don’t have to think
about whether or not to make retirement account contributions; you just do.
Do you have life insurance, or an estate plan? Both
of these become hugely important when you are a single parent. Any kind of life
insurance is better than none. If you have minor children, you have the option
of creating a trust and naming the trust as the beneficiary of whatever policy
you choose. Disability insurance is also a good idea if you work in a
physically taxing career. Name a guardian for your children in case the worst
Have you reviewed the beneficiary names on your accounts & policies?
If you are divorced or widowed, your former spouse may still be the
primary beneficiary of your IRA, your life insurance policy, or your investment
account. If beneficiary forms are not updated, problems may result.
College planning should take a backseat to retirement planning. Your
child(ren) will need to recognize that when it comes to higher education, they
will likely be on their own. When they are 18 or 20, you may be 50 or 55 – and the
average retirement age in this country is currently 63. Drawing down your retirement accounts in your fifties is a serious
mistake, and you should not entertain that idea. Any attempt to build a college
fund should be secondary to building and growing your retirement fund.2
that your cash flow situation might change as retirement nears. Your household may be
receiving child support, alimony, insurance payments, and, perhaps, even Social
Security income. In time, some of these income streams may dry up. Can you
replace them with new ones? Are you prepared to ask for a raise or look for a
higher-paying job if they dry up in the years preceding your retirement? Are
you willing to work part-time in retirement to offset that lost income?
Consult a financial professional who has worked with single parents. Ask
another single parent whom he or she turns to for such consulting, or seek out
someone who has written about the topic. You want to plan your future with
someone who has some familiarity with the experience, either personally or
through helping others in your shoes.
MidAmerica Financial Resources may be reached at
618.548.4777 or email@example.com.
This material was prepared by MarketingPro, Inc., and does not
necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note
- investing involves risk, and past performance is no guarantee of future
results. The publisher is not engaged in rendering legal, accounting or other
professional services. If assistance is needed, the reader is advised to engage
the services of a competent professional. This information should not be
construed as investment, tax or legal advice and may not be relied on for the
purpose of avoiding any Federal tax penalty. This is neither a solicitation nor
recommendation to purchase or sell any investment or insurance product or service,
and should not be relied upon as such. All indices are unmanaged and are not
illustrative of any particular investment.
and advisory services offered through National Planning Corporation (NPC),
Member FINRA/SIPC, a Registered Investment Adviser.
MidAmerica Financial Resources and Malan Financial Group are separate and
unrelated companies to NPC.
1 - cnbc.com/2016/07/20/5-winning-money-strategies-for-single-parents.html
2 - aol.com/article/2016/05/03/the-average-retirement-age-in-all-50-states/21369583/