Are you single? Then retirement planning is tougher for you than it is for couples.
The cost of singlehood
- Single retiree should count on spending about $30,000 to $50,000 a year including taxes, assuming you own your home and have no debt.
- This compares with my spending estimate of $42,000 to $72,000 for retired couples living a comparable middle-class lifestyle.
- But singles do have one financial factor in their favour: if they don’t have kids they’re spared the hefty child-rearing costs that couples with families have chosen to bear. That should allow them a head start on saving for retirement while friends with kids are knee-deep in diapers and daycare.
An active mind and body
- Angela, recently retired after a career in the public sector, has a budget of $73,000 a year, including about $33,000 for the basics, and a sizeable $26,000 for the extras.
- In the early years of her career she was fixated on saving, which helped provide her the ample nest egg she has today, including a group RRSP.
The cost of retiring well: What three singles spend
How much will a single retiree need to cover the basics, the extras, and income taxes? The budgets of these three B.C. retirees—all in their early to late 60s—offer a range of spending patterns from modest to affluent.
(1) Annie Kvick of Money Coaches Canada helped estimate these budgets. (2) Includes property taxes, utilities, maintenance, home insurance, rent and mortgage payments. (3) We’ve added $2,000 a year for depreciation. (4) Includes cleaning supplies, furnishings, appliances, garden supplies and services. (5) Includes computer equipment and supplies, recreation vehicles, games of chance, educational costs.
A single’s guide to coupling
- The money part of a relationship is simple when you’re young and don’t have any. However, if you’re a single person contemplating a serious relationship later in life, itcan get a whole lot more complicated.
- “The first thing I would do is have a conversation about money,” says Barbara Garbens, a financial planner with B. L. Garbens Associates Inc. in Toronto. “Money can be a real stress factor in a relationship, so get a sense of what the person is about financially.” Problems can arise if partners have dramatically different net worths or one is a saver and the other a spender.
- A prenuptial agreement (in the case of marriage) or a cohabitation agreement (in the case of living together) can clarify and provide legal recognition for how assets, debts and possibly spousal support will get treated if the relationship should end. Without such agreements, you may be in for surprises if the relationship dissolves. Many people don’t realize that living together for one to three years (depending on the province) can result in the couple being treated as married partners for family law purposes.