A growing number of divorced, widowed and never-married working Americans are entering retirement alone. In fact, according to the U.S. Census Bureau, 45% of Americans in their 50s and 60s are single today compared to 28% in 1960. If you’re a FERS participant poised to enter retirement solo, there are some facets of retirement planning that you need to consider differently.
You May Need To Work Longer Than Your Married Peers
More often than not, a married federal retiree has a spouse working in the private sector contributing to a 401k or another type of employer plan. As a single federal worker, you can only count on your own contributions to your Thrift Savings Plan (TSP). Working longer enables you to contribute more, including TSP Catch-Up Contributions, while getting your agency match. And those additional years in the workforce can also boost the amount of your FERS annuity (pension) and Social Security benefit.
Designating TSP Beneficiaries Is Different For You
For married people, designating their spouse as their TSP beneficiary is no-brainer. When you’re single, you have to give it more thought. Under TSP rules you can designate one or more people, a trust, a corporation, your estate, or a legal entity like a foundation or charity, as your TSP beneficiary. For complete information, download the TSP Death Benefits Booklet.
“Also consider who will be making healthcare decisions if you’re incapacitated. Look into Advance Health Care Directives that specify your wishes for medical care and end-of-life treatment.”
You May Be More Likely To Need Long Term Care Insurance
When living alone, what will happen if you require assistance with basic day-to-day self care? FEHB and Medicare do not cover non-medical custodial care in a nursing home. As a single pre-retiree, you need to consider that this type of care can run as high as $10,000 per month depending on where you live. Without Long Term Care (LTC) insurance, these costs can wipe out your retirement savings.
Estate Planning Helps Ensure Your Wishes Are Honored
Without a spouse handling matters when you die, you can’t be sure your wishes will be honored. You estate plan includes much more than a Last Will & Testament. A Durable Power Of Attorney enables you to name someone who can make decisions about your property, finances, investments, paying your bills, and sign documents on your behalf, until you’re able to do so yourself. Also consider who will be making healthcare decisions if you’re incapacitated. Look into Advance Health Care Directives that specify your wishes for medical care and end-of-life treatment.
Touch base with an FRC® trained advisor who understands federal benefits and can help you develop strategies for a solo retirement.
