Guillermo de la Rosa in his Toronto home on Feb 26.Fred Lum/The Globe and Mail
Guillermo de la Rosa is the first to admit that his retirement saving contributions aren’t significant.
Though his job as a digital services operator offers a RRSP matching program, he still hasn’t been able to put aside as much money as he’d like. The 34-year-old has lived alone in a Toronto studio apartment for 10 years, but now he’s feeling the pinch, as his income has not kept up with inflation.
“I’ve kept up a bit with the rent, but I definitely feel the dent on my bank,” he said.
Meals out with friends and heading to the movies used to be routine costs, but lately, de la Rosa says everything has gotten more expensive. Being single makes it even more challenging: “It is harder to hit certain milestones as a single person.”
A recent study from Co-operators, a financial services group, found that nearly half of singles surveyed said saving for retirement was a “near-impossible task.” (The online survey polled 1,500 adults across the country from Jan. 10-15. Online polls cannot be assigned a margin of error, though a comparably-sized probability sample would have a margin of error of plus or minus 3 percentage points, 19 times out of 20.)
As de la Rosa has experienced, increased costs of living and inflationary pressures on everyday needs such as transportation, groceries and entertainment are cutting into funds that could be set aside for savings.
“Single Canadians are saving less for retirement and they’re worried more about their future, compared to non-singles in Canada,” said Jess Baker, executive vice president of retail wealth at Co-operators. The survey found that 44 per cent of all singles are putting aside less than $25 per month for investing, and 35 per cent of singles have less than $5,000 saved for retirement in total.
Single people are not able to share expenses such as WiFi, electricity or hydro bills with a partner. They also do not receive benefits enjoyed by married people, who are able to lower their tax bills through pension splitting and spousal tax credits.
And, though the number of single Canadians has steady climbed to 18 million in 2022 from 14 million in 2000, this key demographic is often left out of retirement savings conversations.
“No one should be left behind,” Ms. Baker said.
It’s not just young single Canadians who are struggling with saving for retirement. Silvia Farache, 55, lives alone in North York. Years ago, she was married, working full-time, and had extra funds to pool with her now ex-husband and put into retirement funds – about $400 to $500 per month.
But after going through a divorce, she’s now trying to make ends meet to cover the essentials: rent, groceries and pet food.
“It doesn’t leave much room for any savings, especially with growing expenses,” she said. Sometimes, she has to resort to the food bank for non-perishables.
Ms. Farache says common cost-saving advice, such as buying in bulk or splitting expenses, doesn’t make sense for single people like her. As the founder of the Women of Light group, she’s been advocating for middle-aged women to take control of their financial literacy: “We can’t depend on a man to take care of us.”
There are strategies to cope with the so-called “singles tax,” Ms. Baker said. One idea is to lean on community, whether that’s living with roommates or multi-generationally, or pooling resources together to manage expenses. Go over your budget by yourself or with a financial adviser to take a hard look at your bank account, she said.
“See what your expenses are, and see if there’s any opportunity to free up investable income,” she said. “If not, what choices can you make to prioritize living for today and saving for the future?”
Ms. Baker suggests single people seek out tailored advice from a financial adviser on how to use an RRSP or a TFSA effectively, noting that they have different needs than couples. And no, you don’t need to be rich to do this: Small, regular contributions will add up over time.
“I want singles and other Canadians to break up with the idea that you need to be wealthy in order to get advice or to save for the future. It doesn’t matter how much money you have. It’s about making sure that money is going to do what you need it to do on your terms.”
