How to succeed as a solo retiree

By Linda Lamarche, CFP® 27 September 2021 8 min read

Retiring solo is on the rise. According to a Statistics Canada report Living alone in Canada, one-person households increased from 9% of the population in 1981 to 14% of the population in  2016, with 26% of the senior population living on their own. With increased life expectancies, an increasing trend of later-in-life divorces, and less stigma for individuals who are single by choice, the rate of one-person households will likely continue to grow as will the number of people heading into retirement on their own. 

Regardless of your marital or relationship status, planning for your retirement is critical, however, if you are retiring solo there are additional challenges compared to your married or common-law counterparts. Couples may have the advantages of being able to split eligible pension income if certain requirements are met, potentially lowering the household’s overall tax burden and may benefit from dual sources of government pension and potentially private pension incomes to fund their retirement goals. That being said, retiring solo can have many benefits—peace and quiet, doing what you want, when you want and never having to negotiate important decisions. With proper planning you can enjoy your freedom, financial independence and be confident in your journey into retirement.

If you’ve been on your own for a while, you have likely been planning for a solo retirement and have a head start. However, if you’ve recently experienced a breakdown in your relationship, a divorce, or have been recently widowed, planning for single retirement can feel daunting. A relationship breakdown later in life, commonly referred to as a grey divorce, can have a large financial, not to mention emotional, impact on your retirement planning. The resulting division of assets, including pensions and even the family home may result in reduced cash flow for both parties and possibly the need to increase borrowing or take on new debt. 

Losing your spouse to a premature death can also greatly impact your financial and emotional well-being. In some cases life insurance might lessen the financial burden, but even so, losing your companion and best friend can be emotionally devastating. It can also be overwhelming if you were not actively involved in the family finances and now find yourself dealing with estate, tax and financial issues. Developing and maintaining your financial literacy can lead to an increase in your overall sense of financial well-being and self-trust, both vital in the event of an unexpected breakdown of your relationship or premature death of your spouse or common-law partner.

Whether you are on your own by choice or circumstance, here are six key considerations when planning for a solo retirement:

1. Develop a plan

Retirement is a milestone everyone needs to plan for. For those who retire solo this becomes more critical as there is no one else to share your financial choices and burdens, and the impact of these financial decisions can be significant.

Typically, you’ll need to imagine what you want from retirement, what your life in retirement will look like and when you wish to move into retirement. Determine how much you’ll need for your desired lifestyle, how much you have available, and how much more you will need to save. You’ll want to understand your financial picture including all assets and income sources that will be available to you during your retirement. Consider working with a financial advisor to develop a comprehensive financial plan that covers not just retirement planning, but could also include: financial management, risk management, investment planning and tax and estate planning.  

Having a financial plan and working with a professional financial planner can also have a positive impact on your health and well-being, which, as a solo retiree, is key to a fulfilling and active retirement. The recent FP Canada Financial Stress Index concludes that finances and health are more intertwined than ever and that financial stress has caused more than half (51%) of respondents to lose sleep. One in three (31%) said it also led to health issues, up from 18% who reported money-related health problems last year. Canadians who work with a professional financial planner are more likely to say they feel more hopeful about their money situation and financial future than they did a year ago (73% vs. 56%). 


2. Plan for the unexpected

As a single person it’s even more important to document who can speak for you and carry out your wishes if something happens to you. You’ll need to create a will and decide on the distribution of your assets after your death. As well, you’ll need to set up an Enduring Power of Attorney and Personal Directive to provide someone with the authority to make decisions for you in case of physical or mental incapacity. Existing estate planning documents will have to be updated if you have recently experienced a life-changing event like a relationship breakdown, divorce or death of a spouse or common-law partner. These documents provide your family or friends with clear direction should the unexpected happen. Beneficiary designations for any registered accounts, TFSAs, pensions and insurance policies should also be reviewed and updated to ensure the people and causes you care about are taken care of in the event of your death. 

If you have investments held within a securities account, it is recommended you name a "trusted contact person" for your account. This option is being introduced to protect older and vulnerable clients from financial exploitation. Electing a trusted contact person is not a replacement or substitute for your Power of Attorney, but rather in addition to. Your trusted contact would not be authorized to make transactions in your account, instead the intent is for the financial institution to have someone to reach out to if they are concerned you are being financially abused or exploited. Whether it's the romance scam, the relative in trouble scam, or any of the other financial scams that are increasing in frequency, having a trusted contact person (ideally one with no current or future financial interest in your affairs) is one more step to ensure you are protecting yourself from the unexpected. 


3. Plan for continuing care

Plan for the possibility of assisted living during your retirement years. Before you need those services, it’s important to understand what’s available from the province as well as private providers, and the potential costs.

There are key questions you will need to consider:

  • Will you consider moving into supportive living or long-term care?
  • Do you want the flexibility to choose between privately-operated or publicly-funded communal living facilities?
  • Do you want to live independently at home as long as possible? The decision to stay at home may necessitate research on the cost of assistive devices, modifications to your home, plus the cost of receiving personal care in your own home. 

By planning ahead and determining what options are available, you can make important decisions about your care while you still have the capacity to do so, and can budget and plan accordingly. ATB’s guide to Continuing care in Alberta can make the planning easier.  


4. Stay healthy  

An essential element of a rewarding retirement is being in good physical health, especially if you’re aging on your own. Poor health can derail many of the plans you have for retirement, and can impact your independence. 

Being healthy is not just about physical health, but also incorporates your mental and financial well-being. As previously mentioned, sound financial planning improves your personal health and wellness. As a solo retiree, maintaining a healthy lifestyle that incorporates a strong body, mind and financial foundation is key to a fulfilling and rewarding life in retirement. 

5. Maintain social connections

If the COVID-19 pandemic has taught us anything, it’s the devastating impact social isolation can have on our mental health. Whether it’s residents in long-term care not being able to see their loved ones, grandparents unable to hug their grandchildren, or individuals suddenly working from home and no longer interacting daily with their co-workers, the impact of isolation has taken a huge toll on our collective mental health. 

Social interaction improves physical and emotional health, and can increase both length and quality of your life in retirement. Among all solo dwellers in Canada, senior women are the most likely to report high levels of life satisfaction (72%), significantly more than their male counterparts in the same age group (62%). This echoes previous Canadian findings that many senior women who live alone may avoid social isolation by actively participating in their community and engaging with others on a regular basis.1

As a solo retiree, having close friends is important. In addition to companionship and emotional support, friends and neighbours can be a great help to each other when it comes to household chores, medical appointments and running errands. It’s incredibly beneficial to your well-being to have a network of caring friends that you rely on and who rely on you.


6. Have a purpose

In our working years, our employment or profession often provides us with much of our identity and purpose. Employment can provide structure and a reason to get up in the morning. Alternatively, you may have been running a bustling household, raising children and are now experiencing an empty nest. The transition to retirement can be difficult if we feel like we’ve lost our meaningfulness. Living a balanced life and having other pre-retirement interests that support our desire to make a difference can make this transition easier. 

Retirement can provide even more time and opportunity for self-discovery. Whether we choose to develop our creativity, deepen our spirituality, or give back to our community, living a retirement with purpose can provide us with contentment and a reason for being.

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