Financial planning for single women: How to prepare for the future

Over the last several decades, single-parent households have been on the rise, and according to a 2022 US Census Bureau, 80% of these families are run by single mothers. “While being a single woman can come with challenges, there can also be more opportunities to focus on personal money goals that support your financial independence,” shares Director of Strategic Business Development Lori Seaton.

Single women can face unique financial challenges, but they may also have opportunities to focus on personal money goals that support their financial independence. Here are helpful ways to increase your knowledge of money, take charge of your finances, and build a stronger financial future.

The importance of financial literacy for women

Growing financial knowledge and adopting healthy money habits is essential to building a solid foundation for future financial security. For women who wish to understand the tools and savings strategies better, taking steps to improve financial literacy is important. We’re in the midst of an unbelievable wealth transfer, in which women are set to control more wealth in this country than ever before,1” adds Seaton. With women in the driver’s seat of their financial future, it makes it so important for them to set a financial plan and understand their savings options.”

Each woman’s financial story is unique, and may include challenges such as stepping away from the workforce to care for children or aging parents, short-or long-term health issues, and even needing to stretch retirement funds longer than anticipated due to a longer lifespan. Fortunately, the more women set a financial plan and grow their knowledge of money, the more empowered they can feel to make informed decisions and work toward their goals.

Ways to save money as a single woman

Single women often have greater freedom to make financial decisions that impact their own lives and put them on the right track toward achieving their goals. While there are likely fewer disagreements about money when you’re solo, building adequate savings can sometimes be more difficult on one income. Fortunately, with some planning and good money habits, it’s possible to achieve your goals and build assets for the future.

Set a budget

Using a budget can be one of the most beneficial best practices when it comes to money management and reaching savings goals. Looking at a detailed list of income and expenses can help pinpoint opportunities to up your savings. You may find areas where spending can be trimmed and re-routed to savings or ways to pay down debt more quickly to free up income for savings goals.

Evaluate your spending

Looking closely at a budget can reveal what expenses are necessary and which are non-essential. Building out a place in the budget for fun expenses is important, but if there are numerous costs on the list that are draining income, now may be the time to trim those back. You may be surprised how cutting back on food delivery or streaming services, for example, can free up cash that can go directly toward boosting your savings account.

Make saving a priority

You deserve to reach every goal you set, and by finding a strategy that works for you, there’s a greater chance you’ll reach the finish line for each one. Finding ways to make small, regular contributions to savings can add up over time. And if you receive a yearly bonus or earn a little extra cash, consider depositing that money directly into savings.

Save for retirement

Whether it’s an employer-sponsored plan or through a trusted financial institution, women can build a more secure future for themselves through regular contributions to a retirement account. Since there’s no better time to start saving for retirement than now, making this goal a priority in the budget can help build that fund quicker and over a longer period and ensure that when retirement does arrive, there will be the income needed to maintain your lifestyle.

Build an emergency fund

House or car repairs, an unexpected medical event, or job loss can all lead to financial strain without a safety net in place. Contributing a portion of your monthly income to an emergency fund helps ensure you’ll be protected in an emergency. It will have the money necessary to cover unplanned expenses without putting yourself in too much debt or draining your savings.

Retirement and estate planning for single women

With a long list of financial obligations and day-to-day responsibilities, planning for the future can be challenging. But with a proactive approach, single women can save for retirement and improve their financial standing when the next chapter arrives.

Single women have the advantage of planning for retirement based on their own timeline and positioning their estate to make a difference for the people or causes that matter most to them. “It’s easy to lose sight of your retirement goals—especially with other financial obligations you have to deal with in the present,” adds Seaton. “It’s vital to keep your eye on the prize and know that there is more than one way to achieve your retirement goals.

For single women looking to prepare for retirement, these tips can help get the ball rolling:

Picture your lifestyle in retirement

In the early stages of retirement planning, a good exercise is picturing the future and what life looks like as a retiree. Having an idea of how you’d like to spend your time can help determine how much income is needed to support those dreams. Retirement income needs can differ for someone content to stay at home and enjoy their hobbies versus someone who envisions lots of travel.

Explore your options

When it comes to retirement accounts, the options and requirements can differ depending on if you’re single or if you are divorced or widowed. Certain accounts and Social Security may offer benefits for widows. If you’re divorced, you may be required to split 401(k) or IRA benefits depending on agreements/settlements from your marriage. If you’re single and just starting your retirement plan, you can choose the options that make the most sense.

Consider annuities

Annuities can be a great addition to any retirement income plan and especially benefit single women. Life-only annuities, for instance, can provide a guaranteed income stream in retirement and potentially higher payouts but stop payments upon the annuitant's death.

“You can never tell what the market will do,” adds Seaton. “However, products like fixed and fixed index annuities can offer the security of income that cannot be outlived, and protections during market downturns. It’s an enticing option for those interested in conservative growth that could lay the foundation for a strong retirement.”

Remember estate planning

For single women, it’s important to designate beneficiaries for their assets in the event of their death, whether it’s their children, nieces or nephews, other close family members, friends, or charitable organizations. Think about who will likely pay for final expenses and consider including them as a beneficiary. It can also be a good idea to designate someone as a power of attorney if you cannot make medical or financial decisions for yourself.

Talk to a financial professional

Even though financial planning can often seem tedious, you do not need to go it alone. Finding a financial professional you trust can help make the process much easier and allow you to ask questions, build your knowledge, and feel more empowered to make decisions that positively impact your future.

Achieving financial independence is worth celebrating and can pave the way for new opportunities. Regardless of your income, personal goals, or marital status, you have the power to grow your knowledge of money and take steps that support a stronger financial future.

1. LIMRA, Understanding the U.S. Woman’s Market, March 2022.

The opinions and ideas expressed by Lori Seaton are her own and not necessarily those of Midland National Life Insurance Company or its affiliates. Midland National Life Insurance Company does not endorse or promote these opinions and ideas nor does the company or agents give tax advice. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed as to accuracy.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

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