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Financial Wellness Series: Facing Retirement Alone

Statistics show that there is a very good chance you will be single in retirement and your retirement income may be much lower than expected.

43% of Canadians aged 65 and older are single and 88% of these singles are widowed, separated or divorced.

Being single at some point in retirement - whether as a result of a divorce or the death of a partner - is a new reality that few Canadians have planned for and will result in a new set of challenges for the survivor ó from both a financial and an emotional perspective.

Although we are living longer, many will face retirement alone. Thereís a 50% chance that at least one member of a couple aged 65 today will live to celebrate a 90th birthday, and a one in four chance that one will live to age 94. The odds are that that person will be a woman. 

The loss of a spouse doesnít only happen in old age ó the average age for widowhood in Canada is 56.

Not being prepared to be single during retirement can be devastating for the survivor who will need to live on less money than they were living on before the death of the spouse.

Typically, women continue to earn less than men, are more likely to work part time, and do not have a company pension plan. They may also take leave to care for children or aging family members. This results in lower savings during working years and lower government pension income in retirement. Women also have a longer life expectancy then men. A few years of funding a manís ill health can quickly erode accumulated savings, leaving much less for a woman to live on during her much longer retirement years.

Without any advanced planning, the survivor will face having to make big changes in lifestyle to deal with the loss of income. Even couples who feel they have saved enough for their retirement, need to consider how a death will affect the survivor.

Part of retirement planning that cannot be overlooked is an analysis of survivor income. Itís essential to consider investment, insurance, and pension options that will provide maximum income for survivors.

We're here to help. Letís start a conversation@StonebrookePWM.ca

Source: 52 Ways to Wreck Your RetirementÖand How to Rescue it, by Tina Di Vito, CA, CFP, TEP.

This article is provided for information purposes only. Although the content is believed to be reliable when posted, Stonebrooke Private Wealth Management cannot guarantee this information is current, accurate or complete and does not assume any liability. The information is not intended to provide any insurance, financial, legal, accounting or taxation advice and should not under any circumstances be relied upon without consultation about your specific situation. The information is subject to modification and updating from time to time without notice.

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