A growing number of Canadians are retiring alone and are unprepared for the financial implications of it, according to a recent survey by the BMO Financial Group.

The December survey of 1,325 Canadians aged 40 or older revealed a significant gap between the perception and reality of becoming unexpectedly single and its effect on personal finances.

Specifically, 54% of married Canadians 40 or older feel that becoming suddenly single may have a negative impact on their finances. Among those who have become suddenly single, more than 70% 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 of retirement strategies at 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.”

The survey showed that only 38% of respondents had a financial contingency plan in case they outlived their spouse or partner. Of married respondents, 13% feel the high cost of divorce is reason enough to stay married.

The survey also found women to be more apprehensive about becoming single than men: 61% of women said becoming single would have a negative impact on their finances versus only 48% of men.

But women are slightly more likely to have a financial contingency plan than men in case of outliving their spouse or partner. Of women, 40% would have plan, versus 35% of men.

The BMO Retirement Institute, which provides insight and financial strategies for retirement, issued a report on the challenges for men and women over 40 who retire alone.

The challenges include lack of knowledge about retirement programs, less room to maximize Canada Pension Plan, greater disparity between income and expenses and difficulties in housing alternatives.

The report identifies six areas that can improve a single person’s chance for a successful retirement, including planning for retirement as early as possible, building and sustaining wealth, understanding income and expenses, considering changes in housing needs, focusing on social and emotional well-being and devising a comprehensive health strategy.

IE