A “solo ager” is someone who retires without any immediate family or close friends. Solo agers are becoming more common, with an increasing proportion of Americans living alone, whether they are single, widowed, or divorced. In addition, many are childless or have adult children who reside far away, leaving them on their own. If this applies to you, there are some financial factors to bear in mind. Solo retirees who are well-prepared for retirement are the ones with the highest levels of satisfaction. This includes being prepared in regard to upcoming financial and legal concerns. If you don’t have children or a close network of friends nearby, you’ll confront some unique obstacles. Here are some things we think you should know.
Who to Appoint to Make Financial Decisions
Without family support, it can be more difficult to resolve some financial issues because you must find trustworthy people to assist you. If you become unable to make decisions for yourself, who will do so on your behalf? It’s a tough question, but it must be asked. Family and friends may not be the best fit for the positions of executor and proxy. Despite this, they are frequently the favored option. Before you ask someone to fulfill one of these critical obligations, you must ensure that they will be responsible. Be explicit about what you expect of them. Filling these positions may also necessitate the acquisition of specific abilities and knowledge.
If you’re a solo ager and need a friend to serve as executor or health care proxy, consider whether they have the time. Can you confidently predict they will outlive you? Do they understand how to manage your money? Will you be able to compensate them?
Have a Checklist and Other Legal Directives
Solo agers will require a living will to specify how they want certain situations to be handled. A living will is essentially your written instructions on how you want to be treated in medical conditions in which you are unable to make decisions for yourself. This could include your desire to withhold treatments to extend your life like mechanical respirators, intravenous or tube feeding, dialysis, and so on. Each of the fifty states* lets you “express your wishes regarding medical treatment in terminal illness or injury situations, and to appoint someone to communicate for you in the event you cannot communicate for yourself.”
A healthcare proxy, on the other hand, is a durable power of attorney that specifies who will carry out your intentions and make medical choices on your behalf if you are unable to do so. Your lawyer can assist you with the preparation of these documents, and you should also ensure that your family is aware of them. It’s also a good idea to give copies to your regular doctor and keep them with you in case you are admitted to the hospital.
What Local Professional Resources Can You Use?
Qualified financial professionals may be able to fill positions that would have been occupied by family members. An elder law attorney may be part of your skilled team to manage legal concerns. It may also involve a patient advocate or geriatric care manager who will oversee health-care decisions. In addition, a financial professional to handle financial matters, and neighbors or friends in town who can assist in a crisis.
Have a Financial Power of Attorney or Revocable Living Trust
Once you reach a particular age, you should start planning for a period when you might be more susceptible. You may feel comfortable and independent right now, but this could alter over time. While there are rules in place if you did not arrange ahead of time for certain situations, in general, you should avoid allowing strangers who aren’t professionals to control your money.
You may have been persuaded to select a financial power of attorney to manage your money. However, as a single person, you may be better served* with a solid revocable living trust that provides more freedom and privacy. Consult with multiple experts about which financial tool is most suited to your needs.
*Sources: Right at Home, Kiplinger
