For those who are single today, they are most likely already planning for their current single state. That is an advantage. You see, they are already planning to overcome the financial challenges that are the realities of being single. One person to earn an income, one person to pay the bills, the mortgage, and to save. One person who may or may not have a pension in retirement. One set of government benefits. Financially, they are already planning (or should be planning) to achieve a lifetime of financial independence for themselves and in doing so, are planning to live comfortably for their lifetime. It’s also the way married or partnered couples should plan.
Why? Because that is how the vast majority of us will end up. Single. In fact, 90% of women will be solely responsible for their households’ finances later in life due to divorce, widowhood, or having never married at all[i]. On average, a widow’s income drops by 40%[ii]. On average, it is now expected that a baby boomer woman will outlive her husband by at 10-15 years[iii]. Becoming single again is the biggest financial risk couples face. And yet, no one plans for it.
The result: Shock at discovering the separation from, or loss of, a spouse results in a significantly compromised financial state. Too many are surprised to find that their plans that had seemed to work so well together, suddenly don’t work for them on their own. They experience loss of income, face higher taxes in retirement (can no longer pension income split), and even possibly the loss of assets to other beneficiaries. Any one of these on their own, let alone in combination, leads directly to a lower standard of living. Not only does it mean a lower standard of living, it also comes with feelings of insecurity, anxiety, and lack of control. And if before being single again they hadn’t been part of the financial conversation or management in the household, on top of it all, they have a steep learning curve as they take responsibility for all things financial.
It doesn’t have to be that way. That’s why we have a Plan Single approach. It is a process that’s about making sure that everyone’s financial plans work for them – both for your lifetimes together, and in the event of being single again. With proper planning, women can be financially secure whatever their marital status is today or how that status may change in the future.
Journey with us as we continue to explore the Plan Single approach and how it applies to managing your household finances, how you save, manage debt, and plan for the future. We will also explore many financial decisions through the plan single lens, providing insights and tips to help reduce the risk of today’s choices turning into tomorrow’s regrets. When couples plan single, it isn’t about planning apart from one another, but for each other. The result is being able to move forward, confident you will be okay.
[i] Jacqueline Nelson, “The Changing Face of Wealth,” The Globe and Mail, Report on Business, August 9, 2014.
[ii] Statistics Canada – Death of a Spouse: Impact on income for senior men and women 2009
[iii] Strategic Insights IPC: Women and Wealth – The Changing Face of Wealth in Canada and its implications for Advisors 2017