Being single is more and more common among Canadians, with many people widowed, divorced or single by choice. Not only does this impact your money management during your earning years, there are special concerns and challenges faced by singles that are approaching retirement.
According to a new survey from TD Bank regarding the saving habits of single Canadians:
- 47 per cent of respondents 40 years or older are worried that they will outlive their savings.
- 39 per cent of respondents feel that they’re at a disadvantage compared to couples when it comes to retirement savings.
- What are singles who are approaching retirement most worried about? 63 per cent are worried about being able to keep up the rising cost of living; 41 per cent are worried that they won’t be able to cover the costs of necessities and 39 per cent are worried that they won’t be able to afford extra health care costs.
- 39 per cent of respondents have a hard time managing current expenses and saving for retirement with a single household income.
“When you consider that life expectancy is increasing, as is the cost of living, there is a greater need to accumulate more retirement savings for all Canadians to avoid debt in retirement,” says Jeff Schwartz, Executive Director, Consolidated Credit Counseling Services of Canada.
“However, there are inherent financial challenges when you’ve only got one household income to rely on to cover your spending and savings goals. If you’re single and approaching retirement, it’s essential that you keep your debt load low and have a detailed savings plan,” says Schwartz.
Stop accumulating debt
If your’re carrying debt, those debt payments and accumulating interest are only adding to your monthly expenses. One way to trim your monthly budget and boost your ability to save at the same time is to stop accumulating debt and pay down what you’ve already got.
Once you’ve reduced your debt load, use the extra cash flow to direct towards your retirement savings.
Determine how much you need
It’s always helpful to have a specific goal in mind when it comes to your finances; it can help you fine-tune a plan to help you get there. You’re well served to determine how much retirement savings you’ll actually need.
Consult a financial professional to help you determine how much you need or here is a Government of Canada retirement calculator.
Find out what you’ve got available to you in terms of company and Government pensions, as well as other Government-funded support. You’ll need to determine how much you require to supplement this with your own savings.
Plan for the unexpected
While retirement is often the age of leisure and enjoying the fruits of your many years of hard work, emergency expenses and life events, like illness are more prevalent. Make sure to account for emergency savings in your retirement to cover extra costs, so you can avoid drawing on money intended for your retirement income or taking out more debt.
Learn about investments
If you aren’t financially literate, that’s a task you want to embrace today. Learning about different investment options can help you to invest your savings in a way that suits your investment goals and risk tolerance.