Can you identify the “solo agers” among your client base? They’re broadly defined as unmarried, divorced, or widowed adults with no close heirs. It’s a growing demographic and one that’s often overlooked when it comes to financial planning. Given the lack of traditional planning models for this group, there are several things to keep in mind when working with them.

The Need for Proactive Planning

While every client should have a plan in place for their future, some concerns are critical for the solo ager. Without a spouse or children to care for them, they need to give careful consideration and make informed decisions about issues such as:

• Having a supportive community
• Future living arrangements
• Funeral and burial preferences
• Distribution of assets after death

As their advisor, you’ll want to engage a trusted person or entity to execute their wishes when they pass (or before then, should they become incapacitated). Be sure that you know the people closest to your client and are prepared to work with them when the time comes. Be aware: If they have no one else, it’s possible some of that responsibility could fall to you.

Maintaining Flexibility and Control

As the saying goes, plans are made to be broken. When it comes to aging clients, there’s only so much you can anticipate. So, when the unexpected happens, your client—or a trusted confidant—needs to be ready. When meeting with them, be sure they’ve considered matters such as:

• Living arrangements. Find out if your client expects to age in place, downsize, or move to a retirement community. This is especially important for those living alone, so that they have people nearby to help them stay active and engaged, or in case of an emergency.
• Liquidity needs. It’s difficult to anticipate how much and for how long a client will need money. It’s your job to ensure that they don’t run out. Factor in options such as annuities, along with social security and retirement savings, to help provide a guaranteed income stream for as long as they need it.
• Long-term care planning. It’s best to begin planning for long-term care before it’s needed. This will give your client more control over future decisions and peace of mind as they get older and face additional challenges.

Keeping Their Health in Check

Health care in retirement is crucial to your client’s longevity and well-being. The likelihood of increased medical needs as they age or encounter health issues will require advanced planning, including:

• Funding options: Long-term care insurance can ease the financial burden.
• Care facilities: Consider whether in-home care, assisted living, or a nursing home is the best option.
• Access to services: This can mean routine physician visits, medicine management, or help with routine daily activities, such as showering and dressing.

It’s also crucial that someone can advocate for them in the event they can’t make decisions on their own. A trusted person who serves as health care proxy or POA for health care will ensure that they receive the care they need, for as long as they need it.

Knowing Where the Money Goes

If someone passes without a will in place, the probate process will determine how assets are distributed. In most states, the priority of inheritance is typically spouse, children, parents, siblings, and other relatives. But a client with no close heirs risks having their assets going to a distant relative who they may not know or becoming unclaimed property.

To avoid this risk, encourage your client to meet with an estate planning attorney and designate non-family beneficiaries, such as friends or charitable organizations, if they have no close heirs. An estate plan, or at least a will, can establish how assets are distributed and prevent them from being escheated to the state.

Minimizing the Tax Burden

If your solo ager client chooses to leave their money to a favorite charity or charities when they pass, you can help reduce their tax burden during their lifetime while maximizing their impact to the cause or causes they hold dear. Tax-advantaged strategies include:

• Donor-advised funds
• Charitable trusts
• Foundations
• Scholarships
• Non-profit endowments

By focusing on charitable giving, it can help your client secure a legacy while also providing them with more liquidity during their lifetime.

Finding a Support Network

Those living alone, and without family to check on them, are at greater risk of suffering from loneliness and depression. While their financial well-being is your top priority, their emotional well-being is something you can support. You may be one of the most trusted people in their lives and you can retain that trust—and help them enjoy a happy and healthy lifestyle—by:

• Checking in more frequently, watching for signs of cognitive decline, and staying vigilant against the threat of elder fraud.
• Partnering with aging-in-place consultants or senior living specialists to give them the support they need.
• Finding and introducing them to local community groups or advocacy organizations.

Solo Aging Shouldn’t Mean Aging Alone

According to 2021 Census data,* 6.1 million adults over 55 who live alone have no children. They will make up a significant portion of the more than $80 trillion expected to shift hands over the next few decades in the Great Wealth Transfer. With no close heirs, these clients need more specialized guidance as compared to those with families. By tapping into this underserved segment, you can help provide the planning they need while finding significant growth opportunities for your business.

Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.

*United States Census Bureau, August 31, 2021