Retirement planning can be done on a single salary. Woman still stay home to raise kids. Sometimes the husband stays home to raise children. Sometimes a spouse is unemployed. Woman sometimes choose to be an old-fashioned house wife. Occasionally men will stay home and be a house husband. There are multiple reasons but the result is one salary.
Single at the Moment
There could be one salary because there is one person in the household. A single person should plan for their retirement. They also should plan retirement for a family as well. The person may have no plans to get married. However, we all know those plans do change from time to time. When one is single they should plan a retirement goal to have the ability to sustain them at a comfortable level at retirement. They should then double that figure just in case they do not stay single.
Temporary One Salary Retirement Planning
This is for the family where one spouse is unemployed or has chosen to stay at home. They could be completing school or staying home with the children. The one key here is the situation is temporary. It is important; the person earning the one salary continues to participate in retirement plans. The temptation will be there to stop contributions or decrease them to increase take home pay. Resist those temptations. Increase funding if your budget allows. The key is to focus on the long-term retirement plan.
Two Incomes, One Retirement Plan
Sometimes families have two salaries however only one person works at an organization with a retirement plan. This family has more options. The one with the retirement plan should contribute enough to take advantage of any matching programs. They should also see what is needed to meet their retirement goal. This family has more options besides a 401K or pension plan. They can invest money from the second salary into an IRA retirement plans, stock, mutual funds, and/or real estate to meet their retirement goals.
Permanent One Salary Retirement Planning
It is critical for families with only one salary on a permanent basis plan to fund their retirement to their comfort income level. They should take advantage of any organizational retirement plans such as pensions and 401K plans. They should supplement those plans with stock option plans. These families may find it wise to diversify their retirement with additional IRA programs, mutual fund, stock or real estate investment. The consequences of falling short of their retirement goals are negative lifestyle changes.
Retirement planning on a single salary is important regardless if the employee is single; it is a temporary arrangement, or a permanent situation. All retirement planning is about achieving the financial comfort one needs when they have retired from the workforce. Take advantage of matching funds and free advice if offered through your organization. Educate yourself about what is available. Plan your retirement, execute your plan, and achieve your retirement goal.