News Releases

BMO Report: Retiring Alone Presents Financial Challenges for Single Boomers

TORONTO, January 15, 2009 – A growing number of Canadians are retiring alone and need to take action to meet unforeseen challenges, according to a new report from the BMO Retirement Institute. Along with the report, BMO released the results of a survey which show a significant gap between the perception and reality of becoming unexpectedly single and its effect on personal finances and the importance of having a retirement plan.

The survey reveals:

More than half, 54 per cent, of married Canadians 40 or older feel that becoming suddenly single may have a negative impact on their finances
More than 70 per cent of those who suddenly became single admit to feeling the pinch

“Whether by divorce, death, or never marrying in the first place, the odds of being single at some point during retirement are high,” said Tina Di Vito, Director, Retirement Strategies, BMO Financial Group. “Regardless of how or why one finds themselves unmarried in retirement, one thing is certain: it presents a unique set of financial, emotional, and planning challenges.”

Retirement for One

The BMO Retirement Institute, launched in April 2008, provides insight and financial strategies for those either planning for or in their retirement years. The BMO Retirement Institute's latest report, Retirement for One – By Chance or By Design, identifies a number of distinct challenges for men and women over 40 who retire alone, such as:

Lack of knowledge about retirement programs
Must devote a larger share of income to living expenses, leaving less for savings
Less room to maximize Canada Pension Plan
Greater disparity between income and expenses
Difficulty in housing alternatives

The report identifies six key areas that, if properly addressed, can improve a single person's chance for a successful retirement, including:

Plan for retirement as early as possible
Build and sustain wealth
Understand income and expenses
Consider changes in housing needs
Focus on social and emotional well-being
Devise a comprehensive health strategy

Additional Survey Findings

The BMO survey reveals Boomers may need a reality check about the impact of becoming suddenly single.

Few respondents said they were prepared for being suddenly single: Only 38 per cent of respondents had a financial contingency plan in case they outlived their spouse/partner.
While few said finances played a role in their divorce, 13 per cent of married respondents feel the high cost of divorce is reason enough to stay married.
Sixty-one per cent of women state that if they became single it would have a negative impact on their finances versus only 48 per cent of men.
Women (40 per cent) who were suddenly single were slightly more likely than men (35 per cent) to have a financial contingency plan in case they outlived their spouse/ partner.
Twenty-four per cent of respondents felt that finances played a role in their separation.

The Leger Marketing online poll was conducted between December 5 to December 15, 2008 and is based on a sample of 1,325 Canadians aged 40 and older. The margin of error for a sample of this size is /- 2.7%, 19 times out of 20.

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