Many single Canadians over 40 are worried they may outlive their retirement savings. In fact, 47% of those planning to retire solo share this concern, finds a TD study.
Further, many are fearful of rising daily living expenses (63%), not having enough money for necessities (41%) and increasing healthcare costs (39%).
Read: New year’s resolutions for retirement planning
Nearly two-thirds (65%) of Canadians over 40 who haven’t been married, or are separated, divorced or widowed, say they’ll most likely be living solo when they retire. This finding corresponds with the 2016 Statistics Canada Census, which found that the percentage of one-person households is at an all-time high and is now the most common type of living arrangement.
Read: How clients can ramp up their retirement security
Whether by choice or circumstance, retiring solo is arguably more difficult than for a couple. In fact, 39% of Canadians in this demographic believe they’re at a disadvantage compared to dual-income couples. With a single income, those polled (46%) say they struggle to save for retirement while managing day-to-day bills since they have to cover all their expenses alone.
Read: Is being a single-income household financially feasible?
Here are some tips to help single Canadians become retirement ready.
- Create a plan
If your clients think they’ll be retiring solo, establish a plan that will get them that much closer to their goals—whether it’s travelling, volunteering or starting a new venture. The plan should identify sources of income, estimate expenses, implement a savings program and manage assets.
- Be a solo saver, not a spender
Keeping finances in order, especially when depending on a single income, is important. An easy way to ensure these clients are actively saving for retirement is to help them set up an automatic authorized payment on a weekly, bi-weekly or monthly basis. Also, mix RSPs, pensions, TFSAs and non-registered investment accounts to target tax-efficient income-stream options.
- Contribute early
Educate clients about the benefits of starting retirement planning early. For example, longer-term investing gives them a longer period of potential investment growth and can help mitigate shorter-term fluctuations in the market.
- Be prepared
Help these clients prepare for unexpected life circumstances, such as an illness or job loss. This can reduce the impact on their retirement savings plan.
About the survey: Environics Research Group conducted an online survey among 2,500 adults from Oct. 26 to Nov. 3, 2017. Of those, 699 indicated they were 40 years of age or older and that they were single, never married, separated, divorced or widowed.
How to plan for solo retirement
How much do single clients need in retirement?