More than half the nation is single, according to U.S. Census data assembled by CityLab. Among that number, many are seniors; it’s the fastest growing group of single people in the nation. Financial planning as a single senior is just as important as it is for married people, yet most of the do-it-yourself financial advice you find is aimed at couples. Here are some key tips to consider when working with your Certified Public Accountant to make the most of your senior status whether you are divorced, a widow or widower, or have never married.
Widows and Widowers
For those who have lost a spouse, financial planning often includes attention to Social Security benefits. Upon reaching full retirement age, or FRA, surviving spouses who have not remarried before age 60 may be eligible for 100 percent of their partners’ Social Security benefits. These benefits continue to be recalculated to adjust for inflation and may be a better option to claim than your own benefits, particularly if you choose to claim at FRA instead of waiting until age 70 to earn additional benefits by delaying your claim.
Choosing survivor benefits and deferring your own claim can lead to a more comfortable retirement. The specifics of eligibility, when to claim, and which benefits to take can be complex to navigate on your own, however, so it’s best to speak to a CPA with experience in retirement planning who will help you make the right decisions for your financial future.
Financial planning for divorcees brings its own set of challenges depending on your ex-spouse’s financial status, the length of your marriage, and whether your former spouse is still living. You may be able to claim some spousal benefits based on your ex-spouse’s work history. Typically, these benefits amount to no more than 50 percent of the ex-partner’s qualified benefits, and these claims are limited to marriages that lasted at least ten years. As with survivor benefits, making a claim on an ex-partner’s Social Security could allow you to defer your own claim until later in life when your own payments increase to their maximum at age 70.
Those whose former spouses have died may qualify for a full survivor benefit instead of half the spousal benefit. In most cases, this full benefit requires the marriage to have lasted at least ten years, but the law does make some exceptions, such as having a disabled child in the home. Because retirement benefit rules can become quite complicated when divorce and survivor benefits enter the picture, it’s best to speak to a financial advisor and learn about all your options.
Although retirement planning for never-married people is more straightforward when claiming Social Security benefits, single seniors face their own set of challenges. With a single income, maximizing benefits becomes even more important. If you have a partner who is a part of your life and future but not your Social Security status, your CPA can implement a financial plan that includes the people most important to you.
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