Does being single require that different a financial plan?
It’s tough being single … at least when it comes to money.
Most financial plans tend to centre on milestones that have a lot more to do with couples than singles: Get married. Merge your financial lives. Buy a house. Have a child. Buy some insurance. Start saving for university — it’s a pretty traditional pattern.
But not everyone fits that template. What about those that don't have children? What about those that aren't married or otherwise attached?
Many singles are spenders, not savers, because they often don’t feel the same pressure to save as those with with children. After all, no kids means no university or wedding costs. But there are other financial pressures — not the least of which is having to juggle day to day expenses on one income, rather than two.
Just as with married couples, the older most singles get, the more assets they accumulate. And they’ve got an even greater need than a couple to put a plan in place that will protect what they've got and what they might make.
After all, there's no spouse who'll make up for some of your lost earnings if you get fired or become sick.
Assuming they have no dependants, the asset singles most need to protect is probably their earning ability. One way to do that is with a long-term disability plan, income-replacement insurance that provides a tax-free income in the event you can’t work because of injury or illness.
Extensive disability coverage is a perk that many employers don’t offer, however, or at least not at the level that higher-income earners might find useful. But it's one worth exploring, particularly if you're on your own.
Single or otherwise, have you considered buying LTD coverage? Have you had the misfortune to collect? How have things worked out?
By Gordon Powers, MSN Money