According to Statistics Canada, the most common type of household in Canada is the one-person household.¹

If you’re single, some wealth-planning components take on more importance, and some are very different.

Building a safeguard. A couple has a built-in safety net if one spouse becomes unable to work or loses their job – a second income. A single person must build their own safeguard, making disability insurance and an emergency fund vital. You’re protected if you have disability insurance through your employer, but if you’re self-employed or a business owner, you should look into an individual disability insurance policy. For your emergency fund, you should cover several months of living expenses with money market or high-interest savings mutual fund investments in a Tax-Free Savings Account (TFSA) or a non-registered account.

Saving for retirement. A couple has two incomes to cover the mortgage, utilities, car payments – and to save for their retirement years. Singles must cover everything on their own, making it critical to watch their spending, perhaps even to budget, and to stick to a long-term mutual fund savings plan.

During retirement, a couple can split pension income to reduce their overall tax bill. If one spouse needs help with daily living, the other can offer support, saving the expense of hiring a private care provider. Without these options, a single person may wish to boost their mutual fund savings during their working years.

Planning your estate. When you’re single, you might not feel any urgency to make a will. But you may be motivated once you identify your beneficiary or beneficiaries. Will you name nieces and nephews, a close friend, a charity?

Couples often name their spouse or an adult child as their executor, also known as a liquidator, personal representative or estate trustee, depending on the province. If you’re single, you might name a sibling, friend or trust company.

Making decisions. Spouses in a couple can discuss financial matters with each other. If you’re single, you may feel uncomfortable talking about finances with a friend or family member. You can always contact us whenever a decision involves mutual fund investing or wealth planning.

¹ Statistics Canada, “Distribution of households by household type,” 2021.