When you were a kid, you probably vaguely imagined yourself at your current age, married and with a brood of five kids. Because that’s what adults do, right?
Fast forward to the present day. In 2012, 79% of men and 68.5% of women from the ages of 25 to 29 were not married. In the 30 to 34 age group the figure was 38.4% and 31.8% respectively, while it was 19.5% to 18.3% in the 35 to 39 age group.
As the average age at first marriage continues to rise and divorce creep upwards, more and more people are starting to realise that marriage is not a given, and that it’s not worth it just for the HDB flat.
1. Save more money—you’re going to need it
Yes, we know about the high cost of raising a child in Singapore, and we sympathise. But a single person who intends to move out of the family home faces his or her own challenges, okay?!
Trying to foot the cost of a property all on your own is no joke, and under 35s who want to purchase private property before they get priced out of the property market, well… good luck to you.
The cost per square foot of living alone, whether for renters or property owners, is markedly higher than for couples or families.
In addition, the effects of a job loss or pay cut can be extremely serious for a single person in the absence of a second income that can keep him or her afloat.
The answer is to save as much as you can before you move out and build up a sizeable emergency fund. Capitalise on the fact that you don’t have children (no need to pay for costly tuition classes) and have greater flexibility with your lifestyle as a single person (no need to add to her handbag collection or contribute to his car upgrading fund).
2. Plan for care in your old age
Long-term care is something even those who are married with children might have to consider. After all, you can’t simply assume that your children will be there to wait on you hand and foot in your old age. For single people, the issue of long-term care is even more pressing.
One way to ensure you can afford to pay for long-term nursing treatment when you’re in your twilight years is to purchase long-term care insurance. Once you hit forty, you are automatically covered by the government’s ElderShield plan. However, you can also upgrade your ElderShield plan or purchase supplements to give yourself more complete coverage.
3. Rethink your illness or disability plan
If your income is the only thing that’s keeping you off the streets, you’re going to want to pay special attention to providing for yourself in the event of illness or disability.
While a married person might be able to rely on his or her spouse both physically and financially in the event of a disability, for a single person, it’s the end of the road.
So you’re going to want to pay closer attention to the triggers of your existing illness or disability insurance plan—does it cover you if you are unable to do your specific job, or any job? Bearing in mind that you might have only yourself to rely on if the worst should occur, is the coverage you currently have sufficient?
4. Will, CPF nomination and Lasting Power of Attorney
You might think that nobody is going to be interested in inheriting your bottle cap collection or your wardrobe of cosplay outfits. Well, that might be reason enough to draw up a will, if only to ensure your family doesn’t get stuck with them.
In all seriousness, recent events have shown us that you need to be really careful about whom you allow to make decisions on your behalf when you are no longer able to do so for yourself.
Without a spouse to help you make decisions if you lose your marbles, you might wish to appoint someone you trust to make those decisions for you through a Lasting Power of Attorney—perhaps a friend with the foresight to immediately delete all the photos in your computer.
Even if your bank account is drier than the Sahara dessert, don’t forget that you might have assets such as CPF savings to distribute. Make a CPF nomination if you want your CPF savings to go to a particular person, and dispose of your other assets by writing up a will.
How does your financial planning strategy differ from those of your married friends? Let us know in the comments!