Home
>
Wealth Building
>
Financial Planning For Singles

Financial Planning For Singles

Financial planning often gets a bad rap. Part of the problem is self-inflicted, since some industry participants would rather sell you a product than address your financial concerns. The process of planning is important, though, whether done with a professional or on your own. After all, you wouldn't leave on a long trip without looking at a map ? a poor analogy for some of us men, but you get the idea.

So where should you start? That really depends on you and your situation. Since everyone has different goals, needs, risk tolerances, and concerns, everyone needs a unique plan. But in general, planning needs to take into account at least three major areas ? insurance, investments, and estate planning. While you can fill a library with all the necessary information to properly address these issues, below are a few single-specific tips to help you get started.

Insurance

Insurance is confusing. It comes in all shapes and sizes and covers everything from your car to your health. You can even buy insurance that covers you against alien abductions. And like many areas of planning, insurance can be especially complicated for singles, depending on your situation.

? Life Insurance. For some singles, this may not seem like a pressing issue. But for singles with dependents, it's crucial. Stick with a term-life policy ? more expensive whole-life and universal-life policies are rarely worth the extra cost. You should generally buy enough insurance to equal eight to ten times your annual salary, though you may need more if you have several dependents or unique expenses, such as for a special needs child. And since you may not have a second income to rely on if you can't work, disability insurance is also a good idea.

? Health Insurance. Most of us count health insurance as one of our primary employee benefits. For married employees, the benefit is even greater, since this insurance is usually also available to the employee's spouse. For unmarried couples, though, it's a whole different story. While some companies provide medical and dental benefits to domestic partners, it's far from the norm. And even when these benefits are provided, they are usually taxed as income at their fair market value. While an exception exists, it requires the partner to qualify as the employee's dependent and have an annual income of less than $3,100 ? which makes it useless for many partners.

Investments

Successful investing is a difficult and time-consuming process. I'll touch on specifics in later issues, but if you're trying to put together an investment plan on your own, keep these issues in mind.

? Be patient. There aren't any magic systems that will help you consistently beat the markets. And if there were, could you really buy them for $299 on the Internet? Investing is not a get-rich-quick scheme, it's a long-term process that takes patience, discipline and experience.

? Diversify, but in moderation. Most people own several hundred stocks and bonds, either directly or through mutual funds. There just aren't hundreds of great investments out there. You're much better off keeping your portfolio at a manageable level of a two dozen high-quality stocks and a few exchange traded funds or mutual funds with strong track records and low expenses.

? Selling matters. Most people focus on buying stocks. That's important, but even more critical is when you sell stocks. Manage your risk by selling losing stocks when they fall 10% below your purchase price. Also, if you have a winning investment, take some profits along the way ? there are more than a few people who wish they'd done so back in March 2000.

? Mutual funds aren't always the answer. Many people rely on mutual funds as the cornerstone of their investment portfolio. This can be a problem, since the vast majority of mutual funds consistently underperform the markets. Not only that, mutual funds are extremely expensive and include hidden fees that don't show up in their disclosed expense ratios. These hidden fees can cost you thousands of dollars and take a huge bite out of your returns. Mixing in individual stocks and exchange-traded funds can help improve your returns and keep your costs in check.

? Develop your own approach. For example, my investing style is probably best described as opportunistic ? I wait patiently in conservative investments until compelling opportunities arise and then deploy capital accordingly. While it fits my personality and has worked well for my clients, it isn't right for everyone. Some people want more risk, some want less, and others just don't have the time to spend researching and monitoring their investments. Find a strategy that fits your unique risk tolerances, goals, and preferences, and then stick with it.

Estate Planning

Retirement planning for singles can be tricky. For example, most qualified retirement plans, such as employer-run 401(k) plans, are geared toward married couples and often don't provide for lifetime distributions to unmarried beneficiaries. This can cause major tax headaches for the beneficiary. Here are some other issues to consider

? Make sure you have a will. This may seem obvious, but an amazing number of people simply ignore this basic planning step. Probate laws are complicated, time-consuming, and don't always end up transferring your assets where you'd like. And if you're a single parent, make sure the will names a guardian for your children.

? Designate beneficiaries for your IRA accounts. Because IRA's don't pass through your will, you need to execute a separate beneficiary designation to make sure your IRA passes to your intended beneficiary.

? Execute a durable power of attorney. This power of attorney should not only cover your business affairs, but also your health care decisions. You hope you'll never need these documents, but if you do, you'll be glad you thought ahead and made the necessary arrangements.

David A. Twibell, J.D., is Executive Vice President of Colorado Capital Bank in Colorado Springs, Colorado, where he directs the bank's portfolio management and wealth advisory practice. He can be reached at (719) 482-7015 or dtwibell@coloradocapitalbank.com.

cleaning team near Winnetka ..

In The News:

Researchers discover phishing scam using invisible characters to evade email security, with protection tips including password managers and two-factor authentication.

iPhone and Android users can reduce battery drain and data usage by restricting Background App Refresh to Wi-Fi connections instead of mobile networks.

Scammers nearly stole an Apple account by exploiting the support system with authentic-looking tickets and phone calls, users can protect themselves with safety steps.

FoloToy restored sales of its AI teddy bear Kumma after a weeklong suspension following safety group findings of risky and inappropriate responses to children.

Threat intelligence firm Synthient uncovers one of the largest password exposures ever, prompting immediate security recommendations.

Viral video shared by Elon Musk shows Tesla's Optimus humanoid robots performing tasks from cooking to construction, garnering over 58.5 million views on social media.

Chinese hackers used Anthropic's Claude AI to launch autonomous cyberattacks on 30 organizations worldwide, marking a major shift in cybersecurity threats.

Apple's new Sleep Score feature gives you a rating for your nightly rest quality. Learn how to set it up on your Apple Watch and iPhone today.

Essential phone settings to enable before losing your device, including Find My network, location services and security features for iPhone and Android.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

Cybersecurity research shows weak passwords remain a major threat, with simple patterns and number sequences putting millions of accounts at risk.

New Android malware BankBot YNRK silences phones, steals banking data and drains crypto wallets automatically. Learn how this advanced threat works.

FDA approves first human trial for Paradromics' brain-computer interface that could restore speech for paralyzed patients through neural technology.

New phishing platform QRR targets Microsoft 365 users across 1,000 domains in 90 countries. Learn how to spot fake login pages and protect your accounts.

OpenTable now uses AI to track your dining habits and share insights with restaurants. Learn what data they collect and how to protect your privacy.

Google's discontinued Nest thermostats still secretly upload home data to company servers despite losing smart features, raising serious privacy concerns.

New Android malware NGate steals NFC payment codes in real-time, allowing criminals to withdraw cash from ATMs without your card. Learn protection tips.

DoorDash confirms data breach exposing customer names, emails, addresses after social engineering attack. Learn how to protect yourself from scams.

Concerned about Google's AI scanning your Gmail? Learn how to disable Gemini features that access your emails, Drive files and Chat messages for privacy.

Google warns Android users about dangerous fake VPN apps hiding malware that steals passwords, banking details and personal data from phones and tablets.

Apple's digital passport feature lets iPhone users breeze through TSA checkpoints this holiday season using Digital ID technology at 250+ airports.

A new phishing scam targets family photos with fake "Cloud Storage Full" alerts. Criminals steal credit card information through fake sites. Learn protection tips.

South Korean scientists create ultra-thin fabric muscles that turn clothes into robotic assistants, lifting 33 pounds while weighing under half an ounce.

Archer Aviation has acquired Hawthorne Airport for $126M to launch an LA air taxi network ahead of the 2028 Olympics, featuring AI-powered eVTOL operations and next-gen aviation tech.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Financial Planning For Singles

Wealth Building