Planning for retirement as a single woman

Hey there, time traveller!
This article was published 23/10/2024 (575 days ago), so information in it may no longer be current.

Dear Money Lady,

Going into retirement as an older single woman is more daunting than I thought it would be when I got divorced 5 years ago. I haven’t even updated my will yet, and I don’t know what to do about my current mortgage. It’s just so much to think about all by myself. Any tips for us older single ladies?

Thanks,

Bernice

Dear Bernice,

In 2001 there were more than 1.5 million single women in retirement, today there are over 2.6 million retired Canadian women living alone. Women tend to live longer than men and many divorcees or widows are simply choosing to remain single in retirement. This has created unique challenges.

Many retired women receive much less than their male counterparts. Women have often not worked as many years as men or earned less during their working careers and thus do not receive the same pension benefits. They also tend to be much more conservative when investing than most men. A recent study by the Bank of Montreal showed that men were more likely to hold stocks and mutual funds in their investments whereas women were more likely to hold GICs. So, what are our single ladies to do?

As women, we need to support one another and become more knowledgeable about our future opportunities. We need to expect more from ourselves and to expect more from the people we interact with.

Start by educating yourself. When we know more, we make better decisions and feel more empowered to improve our situations. Start to know what your true financial picture looks like. Buy a notebook and create a budget – your new financial plan. Review all your investments, insurance and taxes. Do you have a good financial adviser? Do you have a good accountant?

It is important for you to have a well-thought-out strategy that provides for the unexpected. You should have an easily accessible emergency fund, such as a line of credit or savings account. This will help pay for unexpected costs that are not built into a budget. With your investments, you must ensure your portfolio grows with products that offset inflation and taxes. Remember, risk is a relative term and as a single woman in retirement, there is more risk to doing nothing than there is in trying to improve your situation. Review your investment portfolio with your adviser, get involved and ensure you have the correct asset allocation to provide compounded growth year over year.

If money is tight in retirement, then maybe it is time to review your overall situation. Can you downsize (or right-size) to something less expensive. Can you continue to work part-time or is there something you may be uniquely qualified to do that will provide a little extra income? In establishing your financial plan, assess your basic needs and ensure they are covered by an income source that is guaranteed for life. Why not consider guaranteed annuities – these are a great product, often overlooked by most Canadians and if you are a single with no beneficiaries, you should consider the highest paid-out annuity: straight life. It also goes without saying that every good financial plan should have an up-to-date will and power of attorney provisions

Start taking control of your life, your future and your finances. If you already have – then bravo!