Christopher Liew: Smart moves for single seniors who are about to retire

Everything Financial's Peter Cishecki offers key insights for those nearing retirement on CTV Morning Live.

Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.

Retirement looks different when you’re planning for one instead of two. The absence of a second income or a partner to share expenses like rent, groceries, and utilities with can make retirement especially challenging. There’s also the added concern of managing health or caregiving needs without a spouse to help you when you need it most.

The financial reality of retiring alone can feel daunting. However, there are ways to make it easier. By taking advantage of tax breaks, government benefits, and implementing smart financial strategies, single retirees can create a system that allows them to be independent and secure in their later years.

Challenges of retiring single

The older we get, the more we realize the value of partnership and having a helping hand. Even if you do have some family and friends to lean on from time to time, it’s not the same as having a partner or spouse under your roof who you can rely on completely.

One income and higher costs

According to a 2022 report by Statistics Canada, the median income for single Canadians 65 and older is just $30,820. By contrast, couples over 65 earn a median household income of $74,200.

If you’re a single retiree who’s not significantly above average income, this means you’ll have to find ways to make your income stretch.

If you’re renting, you’ll have to deal with the ever-increasing rental rates. Even if you’re lucky enough to live in a house you’ve paid off, there’s still the chance that your property taxes could steadily increase and price you out of your housing budget.

You’ll also have to account for rising grocery costs, utility bills, maintenance for your car or home, and other expenses.

No built-in caregiver

Couples often rely on each other for daily support as they age, especially if one partner gets sick, needs surgery, or is having mobility issues. When this happens, having a partner is an invaluable resource, as you’ll have somebody to watch over you, cook you meals, and drive you around.

For single retirees, the absence of a partner may mean higher costs for professional caregivers, long-term care facilities, or in-home services.

Longevity risk

Longevity studies from Statistics Canada reveal that the average life expectancy for women in Canada is 83.9 years, while for men, it’s 79.5 years. This means women, on average, live 4.4 years longer than men.

This means that women face a greater risk of outliving their savings.

Tips to strengthen your finances as a single retiree

While the reality of retiring single certainly comes with its challenges, there are strategies you can employ to help you stretch your finances and give you more breathing room.

1. Use tax credits and deductions

The Age Amount Tax Credit and Pension Income Credit are two tax credits you can use to put extra money back into your pocket as a retiree. There are also other credits and deductions you may be eligible for to help cover medical expenses, home-care costs, and even renovations you make to your home to help with mobility.

Lower-income retirees may also qualify for the GST/HST Credit and provincial programs.

2. Maximize your government benefits

Programs like OAS, the CPP, and the GIS are retirement income sources for many retirees. If you’re single and approaching retirement, you should review your eligibility for these programs and calculate how much monthly and annual income from these sources you can expect.

You could also consider delaying OAS or CPP for higher monthly payouts, and check whether GIS could help supplement lower incomes.

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Beyond federal programs, many provinces and cities also offer extra help such as drug coverage, income top-ups, or property tax breaks. The easiest way to find them is to search “[your province] senior benefits” or “[your city] senior services” on government websites, where you’ll see eligibility rules and applications.

3. Change your living situation

Selling a larger home to move into a condo, rental, or smaller property can significantly reduce expenses and property maintenance. If you sell your house and downsize into a lower-cost home, you’ll also be able to put the difference toward your retirement savings and investments.

Similarly, you can reduce your cost of living as a single retiree by renting out a room in your home or finding a roommate to rent with.

4. Create a retirement budget

Creating a retirement budget is critical, whether you’re single or have a partner. If you want to stretch a fixed amount of retirement money, it’s important to have a clear picture of how much your housing, healthcare, insurance, and groceries will cost while also accounting for inflation.

Speaking with a financial advisor prior to retirement can help you create a detailed budget so you don’t find yourself living above your means.

5. Find part-time work

If you’ve worked hard for your retirement, the idea of continuing to work may not be the most appealing. However, I’ve also spoken to a number of retirees who eventually got bored within a few years of retirement.

Picking up a flexible part-time job or starting a small business gives you a chance to socialize, keeps you mobile, and can also give you some extra income that you can put towards your savings, bills, holiday gifts, or recreational spending.

Final thoughts

Retiring single can be financially challenging. However, with careful preparation, you can create a stable financial plan that will allow you to stay on top of your bills while still having breathing room for emergency expenses and discretionary spending.

By maximizing your government benefits, using available tax credits, budgeting realistically, and being open-minded to lifestyle adjustments such as downsizing or co-living, you’ll be able to stretch your retirement income further and maintain your independence.

More from Christopher Liew:

• Why so many young Canadians can’t find jobs
• How to deal with financial stress if you’re deep in debt
• Are you responsible for your parent’s credit card debt when they die?
• Consolidating your debt? Here’s what you should know