Almost half of Canadians over 65 are single and most find it harder financially than if they had a partner.
As boomers retire and because of “grey divorces,” that percentage is expected to rise, says a report by the BMO Retirement Institute. And women are most likely to feel the financial strain.
For example, two people might have two work or pension incomes. When they split up or one dies, food and clothing expenses probably drop. But fixed expenses like housing won’t change unless the individual moves to less expensive accommodation – which will likely still cost more than half the cost of the joint home.
Other expenses could increase. A single person might have to pay for home maintenance, which the former partner used to do. As a couple ages, one person could care for the other if necessary; a single person might have to pay for such care.
The BMO survey shows couples in particular should plan for the various “what if…?” scenarios that could leave them single.
Unfortunately, most couples tend not to consider the fact one of them is likely to be on her or his own at some point in retirement.
Couples often don’t like to talk about death, but unless they plan to die together, they should take steps now to improve the financial health of the survivor. And if the relationship is dying, each partner needs to prepare financially for life as a single.
Women in Canada are outliving their male counterparts by three to five years. But the survey found 62 per cent of respondents had no financial contingency plan in case they outlived their spouses.
Obviously people cope even if they don’t plan. But looking ahead and taking action now can ease both the financial and also the personal strain caused by death or divorce.
Even if you can’t make much of a difference financially, at least anticipating changes can help you cope better.
– Mike Grenby is a columnist and independent personal financial adviser. He’ll answer questions in this column as space allows but cannot reply personally; email [email protected]
