Retirement Planning Tips for Single Individuals

Retiring as a single individual in 2026 is mathematically more challenging than for married couples because single filers reach the 22% ordinary income tax bracket at roughly half the income level of those filing married-jointly ($100,000 vs. $200,000) . Without a "built-in" support system or caregiver, single retirees must prioritize a "Power Package" of legal documents—specifically Financial and Medical Powers of Attorney—to ensure their healthcare and financial wishes are executed should they become incapacitated. This analysis features Logan DeGraeve, CFP®, and Cris Marik, CFA, CFP®, from our Orland Park (Chicagoland) office, discussing the unique risks of the "Widow’s Penalty" and "Solo Aging." For those born after 1960, the Required Minimum Distribution (RMD) age is now 75, creating a significant planning window from age 60 to 75 to execute Roth conversions and smooth out lifetime tax brackets . We examine the discrepancy in capital gains tax rates, noting that single filers must carefully manage their ordinary income to remain within the 0% federal capital gains bracket before it jumps to 15%. At 17:41: Our "Don't Do That" segment illustrates the legal crisis that occurs when a single person enters a coma without a Power of Attorney, as the law provides no default authority to siblings or partners. Key Takeaways: The Tax Discrepancy: Single filers hit higher tax brackets much faster than married couples, requiring aggressive tax-location strategies. The Widow's Penalty: Surviving spouses often face "condensed" tax brackets and high RMDs while losing one Social Security benefit. Aging in Place: Single retirees must stress-test the cost of in-home care or independent living community fees, as they lack a "built-in" family caregiver. The Power Package: Essential documents include Financial Power of Attorney and Medical Directives, as these do not default to family members under the law. Video Chapters 0:00 Introduction: Why Financial Planning for Singles is Different 1:06 Personal Story: Navigating Independence After Loss 3:37 The Independence Factor: Building Your Own Support System 5:33 Tax Headwinds: Single vs. Married Filing Jointly 7:04 The Widow's Penalty: Transitioning to a Single Tax Filer 8:58 The Planning Window: RMDs at Age 75 and Roth Conversions 10:01 Capital Gains Levers: Capturing the 0% Tax Bracket 11:55 Long-Term Care for Singles: Stress-Testing "Solo Aging" 14:19 Modern Housing: Remodeling for Forever vs. Community Living 16:15 Legacy and End-of-Life Planning Without Heirs 17:41 DON'T DO THAT: The Single Person's Power of Attorney Mistake 20:12 Starting the Journey: The Freedom of the Planning Process Resources: Meet with us: https://bit.ly/4tfEV6e Education center: https://bit.ly/4vKzaPE Retirement Plan Checklist: https://bit.ly/3QkPmXp Sources: https://youtu.be/Cd3As3HjCMg https://youtu.be/N8MiXAKTbmc https://youtu.be/C7_GdgN502Q https://youtu.be/lSy5ggQWmn8 https://www.modwm.com/catch-up-contributions-for-your-retirement-plan/ __________ Investment advisory services offered through Modern Wealth Management, LLC, a registered investment adviser. The views expressed represent the opinion of Modern Wealth Management a Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.