Having a good financial plan is just as important for those who are single as those who are married. Unfortunately, many single people overlook financial planning for their future. So, whether you are a lifelong single person or if you are single through divorce or the death of your spouse, you have your own financial considerations and complications.
Those that are single and do not have someone to fall back on, planning for unexpected financial setback is especially important. Why? Because financial and estate planning help you protect your earnings and your property.
By protecting your earnings you are protecting your ability to provide basic needs for yourself as well as any dependents. You should start by creating an emergency fund that will pay for your basic living expenses for 6 to 12 months. You emergency fund should be separate from any other investments. This fund should be readily accessible and reserved only for emergency use.
You should consider insurance an important factor when it comes to protecting your income. Disability insurance provides a steady income stream when you become ill or injured. Many employers offer disability policies, though the policies are also available through private insurers. If you don’t have dependents, life insurance may not be a priority, however, if someone relies on you financially, a term life insurance policy would offer an income stream to your loved ones in the event of your death.
Things get a bit more complex when it comes to asset protection. You should appoint someone you consider trustworthy to make financial or medical decisions for you in the event you become incapacitated. This can be done using a power of attorney. When you create a will or trust you can ensure that your assets will go to the individuals or charities of your choice by naming beneficiaries for you retirement accounts, insurance policies, and property, as well as any other assets you may own.
Financial and estate planning needs are unique to the individual. If you need assistance contact our office at (260) 497-9761 to schedule an appointment with our Virtual CFOs.