Single person, living alone, with no children
For singles living alone with no children, your primary dependent is yourself. And single-person households make up more than a fourth of all U.S. households nowadays.
Not having a partner can make it harder to save — you don’t have two incomes and you don’t have the economies of scale that you get from sharing housing, utility, and food costs. In expensive parts of the country, home ownership can be out of reach for singles.
On the plus side, not having children means incredible savings. There may be less of a need to purchase life insurance since, depending on circumstances, no one directly depends on your income. On the other hand, some single situations may contradict that thinking.
While everyone should plan to be financially self-sufficient, considering long-term care insurance options is extra important for this group, who can’t count on children to help care for them in old age.
Planning for unemployment and disability is also essential for singles, since there’s no second income to fall back on. Saving a substantial emergency fund to cover several months’ worth of expenses, purchasing disability income insurance, and starting a side job or piece work to diversify your income stream can make things less precarious.
It’s also important to have a will and a trust to spell out what should happen to your assets when you die and keep the process out of probate court.
In next blogpost, we will discuss Same-sex couples.