GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION OF SINGLES AND QUALITY OF LIFE

GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION AND QUALITY OF LIFE OF CANADIAN SINGLES

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

There has been much discussion lately as to whether the CPP (Canada Pension Plan) system should be changed.  The objective of the government is for country to live in a society that takes care of its citizens.  The reality is that some citizens are being taken care of more than others, that is the rich and married/coupled persons while singles and low income are being financially discriminated against.

EXAMPLES OF FINANCIAL DISCRIMINATION

  • TARGETED TAX RELIEF PROGRAMS FOR SENIORS-The Federal Conservative government has a targeted tax relief program where a single senior can now earn $20,360 and a senior couple $40,720 before paying federal income tax.  Program claims that approximately 400,000 seniors (or 7 to 8% of total Canadian seniors) have been removed from the tax rolls altogether.  This so called tax relief for seniors allows federal tax relief for senior singles equal to $1,697 per month and for senior couples $3,393 per month.

The tax relief for senior singles hardly covers a rent or mortgage payment of $1,200 and $250 for food per month (Maslow’s Hierarchy of Need), but amply covers this amount for a senior couple.  For a couple $1200 for rent or mortgage and $500 for food leaves $1693 (or 50% of $40,000) for other necessities and medications and maybe even a nice little vacation all tax free.

It is a well-known fact that singles require more income to that of a married/coupled persons living as a single unit.  In Equivalence scales (Statistics Canada 75F0002M – Section 2 ‘The LIM and proposed Modifications’ (75f0002) (equivalence-scales) if singles are assigned a value of 1.0, then couples require 1.4 times for income, not 2.0. $20,360 times 1.4 equals $28,504 ($2,375 per month) (updated November 18, 2017).  If the federal government cared about income equality and quality of life for senior singles, it would increase the tax free amount for singles.  By not applying equivalence scales to  income for senior singles, they lose $678 a month or approximately $8,000 Lost Dollar Value annually in quality of  life to married/couple retired persons.  (From age 65 to 90, this amounts to $20,000).

When income for senior married/coupled persons is over $40,000 they again get another benefit, that is pension splitting, which singles cannot use increasing quality of life for married/coupled persons over senior singles.  This is a tax benefit piled on top of another tax benefit.

The number of senior ‘ever’ singles (never married, no kids) and divorced/separated persons comprises only about 13 per cent of the population, so how much would it cost to bring the quality of life for these citizens up to the standard of tax relief for married/coupled persons?  The answer is ‘not very much’ in comparison  to what has been given to  married/coupled senior persons.

“Ever” singles are told every day they are worthless and worth less than married/coupled persons even though they have worked 35 – 40 years subsidizing mother/baby hospital care, EI paternal/maternal leave, education taxes even though they have had no children and paid more taxes than families.

  • GOVERNMENTS IGNORE COURT RULINGSRe Allowance Program and Credits, (policyalternatives) 2009 Policy Brief, “A Stronger Foundation-Pension Reform and Old Age Security” by Canadian Centre for Policy Alternatives, page 4, states this program discriminates on basis of marital status as confirmed by case brought under Charter of Rights where federal court agreed program was discriminatory, and ruled it would be too expensive to extend program on basis of income regardless of marital status.’  So what is happening?  Age eligibility for Allowance will change from 60 to 62 beginning in 2023 with full implementation in 2029.  In this democratic, civilized country let’s just ignore federal court rulings and continue a $? million discriminatory program.  Article suggests that ‘OAS (Old Age Security) and GIS (Guaranteed Income Supplement) combined should be increased to at least bring it up to after-tax LICO (Low Income Cut Off) for single individuals.’  And why should married/coupled people get discriminatory marital status benefits where unused credits like Age Credits can be transferred to spouse?

Gross financial discrimination for singles occurs when governments choose to completely ignore court rulings.  Lost Dollar Value to singles:  unable to calculate.

  • PENSION SPLITTINGIt is immoral and ethically irresponsible for governments to deny that pension splitting benefits the wealthy most.  For families who can be exempt from paying 10 – !5 percent income tax on $100,000 and maintain the same income level during retirement as they had during their working years, even though they have less expenses during retirement, is financially discriminating to  singles who cannot pension split.  (This information was revised April 10, 2016 – Lost Dollar Value:  From estimate on income splitting, it has been suggested that income splitting would provide tax relief of $103 for income $30,000 or less and $1,832 for income of $90,000 and over or an average of $794 overall.  If $800 ($794 rounded off) is calculated times 35 years (age 65 to 90), then Lost Dollar Value will equal $28,000.)
  • HOUSING-Financial gurus seem to be leaning towards renting instead of home ownership.  This creates further hardship  for singles and the low income.  If young married/coupled persons are being told that they will probably need to rent because housing prices are out of reach, where does this leave singles and low income persons?  Trend now is towards tiny houses with composting toilets and tanks for storing water, but the rich don’t want to see tiny houses in their backyards.

Try telling singles and low income person that renting is the better alternative when they pay more per square foot and quality of housing is lower than that of houses for families.  If they have problems with not enough income for housing, they are told they should go live with someone.  These people ought to try ‘walking in the shoes’ of singles living in one room or communal situations, where because of low income, they don’t have their own bathroom, and it becomes a ‘dog eat dog’ world where others will, for example, steal food because there is not enough money to buy food. (cprn.org)

The housing market (rental and ownership) is financially completely upside down.  Instead of the rich and middle class paying more for the greatest amount of square footage, they are paying less for the greatest amount of square footage and niceties associated with that.  Singles and low income will be living in hovels, thus violating Maslow’s Hierarchy of Needs principle.

  • IF MONEY IS THERE YOU WILL SPEND IT, IF IT IS NOT, YOU WON’TFinancial studies have come to  conclusions that for people in the lowest income quintile on average have replacement rates of 100 percent, implying their real standard of living actually rises after retirement.  This is such a lie and is totally irrelevant to singles and low income persons.  If there is a poor quality of life before retirement, there still will be a poor quality of life on 100 percent replacement income for singles that does not meet the 1.4 income equivalent (updated November 17, 2017) to that of married/coupled persons living as a single unit.

CONCLUSIONS

Governments, decision makers, some financial advisers to the government. and think tanks are financially illiterate about the financial discrimination of singles.

It seems to be more important for governments to ensure that upper-middle class and upper class maintain their standard of living than it is to treat singles fairly.

Unprecedented growth in value of houses will result in huge tax-free wealth for families and married/coupled persons to the financial detriment of singles and low income.

Marital manna benefits like pension splitting has created a nanny state where married/coupled persons want it all and once these benefits are in place, it is very difficult to get rid of them.  Married/coupled persons have been made irresponsible by their own government.  They are not living a lower life style in their retirement.  A further question is whether these programs will be financially sustainable.

Assumption that retirement income only needs to replaced at 70 percent, for example, does not hold true for both singles and married/coupled persons, because singles require 1.4 income equivalent to married/coupled persons living as a single unit (updated November 17, 2017).  Twenty thousand dollars a year is not an adequate quality of life retirement income for Canadian senior singles.

GOVERNMENTS NEED TO ADDRESS FINANCIAL EQUALITY FIRST FOR ALL CANADIAN CITIZENS REGARDLESS OF MARITAL STATUS, THEN TWEAK CPP.

This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.

FINANCIAL GURUS FINANCIALLY ILLITERATE ABOUT SINGLES’ FINANCES

FINANCIAL GURUS FINANCIALLY ILLITERATE ABOUT SINGLES’ FINANCES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to be used as personal or financial advice.)

In the definition of family, for example Canada Revenue Agency, ‘ever’ singles and early in life divorced/separated persons are included in the definition of family, but in financial discussions by financial gurus they are often ‘kicked out’ of the family.

Financial gurus are often financially illiterate and discriminatory in the financial affairs of singles.  The most often egregious examples of this is the exclusion of  ‘ever’ singles and early in life divorced/separated persons from their blogs and studies.  The following three examples are used as a basis for this post.

Example #1

(false-assumptions-four-ways-seniors-singles-lose) The December 2, 2015 post “False Assumptions of Article ‘Four Ways Senior Singles Lose Out’” talks about false assumptions and false categorization of singles by Ted Rechtshaffen’s October 13, 2012 article “Four Ways Senior Singles Lose Out”.  In this article he states how widowed persons financially lose out in tens of thousands of dollars because they are no longer part of a couple.   He suggests that tax systems should be made fairer for only widowed and later in life divorced/separated persons.  ‘Ever’ singles and early in life divorced/separated persons were left out by exclusion because definition of single status was incorrectly used.  (Ted Rechtshaffen is president and wealth advisor at TriDelta Financial, a boutique wealth management and planning firm) (http://www.tridelta.ca/)

Example #2

(thebluntbeancounter)  The Blunt Bean Counter blog by Mark Goodfield article “The Burden of Singledom” May 6, 2014 is a response to a single person who stated his blog series on retirement was no help and was indeed obscene (this was stated in his blog) to her as a single person.  He is a Chartered Professional Accountant who readily admits that his blog is for everyone, but in particular high net worth individuals and owners of private corporations.  He states that the target audience was not singles or low income Canadians for the retirement series.  There is no problem with this statement; however, he asked Rona Birenbaum to do a guest post, a well-known and often quoted financial planner who also typically deals with high net worth clients.  Her article, ‘The Burden of Singledom’ again gave no meaningful advice beyond what is already known by singles.

Example #3

Dr. Jack Mintz is the President’s Fellow of the School of Public Policy at the University of Calgary.  Jack Mintz and Philip Bazel published an article in February 2014 called “Income Adequacy among Canadian Seniors:  Helping Singles Most” (policyschool.ucalgary)

In the article the following statements are made:

‘Policies should be directed at these most vulnerable single seniors, such as enhancements to the GIS top-up program targeted at those seniors with the lowest incomes, and increased survivor-benefit rates under the Canada Pension Plan.’

’When the income inadequacy of singles and married couples is evaluated using LICO (Low Income Cut-Off), we find a significantly higher incidence of elderly singles with income under $20,000 below the LICO threshold (52.6 percent) when compared with the LICO incidence of elderly households containing a married couple below $40,000 (15.7 per cent for households containing a couple with one elderly, and 6.3 per cent for households containing a couple with two elderly)’.

Such a statement shows financial illiteracy to the finances realities of senior singles as it costs them 70 per cent of what it costs a married/couple persons to live as a single unit.  A better alternative would be to forget the marital manna benefits directed to survivors or widowed persons and treat all senior singles whether they are ‘ever’ singles, divorced/separated or widowed persons as equals with top-ups equal to 70 percent of married/coupled person units.  The 52.6 per cent for singles versus 15.7 and 6.3 per cent for married persons mentioned in above quote shows an enormous spread between the two and is proof of this.  Financially, while in a coupled state, widowed persons appear to have a pretty good quality of life while singles below LICO appear to never have an equivalent quality of life.

(Many low income singles do not have close family members to live with and when they are forced to cohabitate in non-family situations, they often live in undesirable situations such as other household members stealing food, etc., “Social Housing Waitlists and the One Person Households in Ontario”)  (to-rent-or-own-affordable-housing-that-is-the-question)

Seniors living with family is an expense to the family unit.  However, senior singles living on their own have to incur not only 100% of the living costs, but also 70% of the costs of married/coupled persons as a single unit.

Financial gurus state that 70 per cent replacement of pre-retirement income is the standard norm for retirement.  Statistics Canada analysis has found that gross replacement rates vary by income but typically is about 70 percent.  People in the lowest 20 percent income quintile have replacement rates of 100 percent, implying their real standard of living actually rises after retirement. However, the real truth common sense evaluation of these findings show that married/coupled people financially benefit more than singles and divorced/separated persons.  A higher income level for the low income single person is still a low level income.  Financial gurus seem to think that when Canadians have an equal or greater income during retirement than while they are working, that is okay.  Try telling that to low income Canadian ‘ever’ singles and early in life divorced/separate persons who have not received the same benefits and are unable to save at the same rate as families or married/coupled persons during their working lives and, therefore, have lower retirement income.

(senior-singles-pay-more-part-4-of-4-response-to-reader-letters) An example of retired ‘ever’ singles and early in life divorced/separated singles receiving less is the December 22, 2015 blog “Senior Singles Pay More, Part 4 of 4”  showing that in a targeted tax relief program single seniors pay no tax on up $20,360 income, while married/coupled seniors pay no tax on up to $40,720 income.  (It costs more for singles to live person to person that it does for married/coupled persons.  This program barely covers the rent for a senior single, but allows married/couple senior to live a much better financial lifestyle).  A further example is the 10 per cent increase of the GIS (Guaranteed Income Supplement) for low income single seniors in the 2015 budget. One person has indicated that this has amounted to an increase of only $17 per month.

Conclusion

  1. Financial gurus like Chartered Professional Accountants, writers of blogs, members of think tanks and financial planners need to educate themselves and include all singles in their discussions, not just widowed persons and later in life divorced/separated singles.
  2. Financial gurus need to insure singles of all types are given fair and equal financial status in financial formulas and decision making.
  3. Financial gurus need to become educated on what it truly costs ‘ever’ singles and early in life divorced/separated persons to live.  It costs these persons 70 percent of what it costs married/coupled persons to live as a unit.  These extra living costs need to be included in financial formulas and financial decision making.

The blog posted here is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.

SENIOR SINGLES PAY MORE -Part 1 of 4

SENIOR SINGLES PAY MORE – Part 1 of 4

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to be used as personal or financial advice.

(The next four posts will consist of four parts. Parts 1 and 2 will be two published Opinion letters, Part 3 will be two Opinion letters published by readers in response to letter in Part 2. Part 4 will be author’s response to the two reader letters in Part 3.)

(This Opinion letter was published in a local newspaper on June 24, 2015. The Conservative party was ousted by the Liberal party in the October, 2015 election. Proper names have been removed. Since published letters are restricted to number of words that can be published, some additional information is added in italics to this article.)

In the June 17, 2015 edition of a local newspaper, a Conservative Member of Parliament states that the Conservatives remain committed to seniors through various measures they have implemented since 2006. This includes targeted tax relief where a single senior can now earn $20,360 and a senior couple $40,720 before paying federal income tax. He states that approximately 400,000 seniors (or 7 to 8% of total Canadian seniors) have been removed from the tax rolls altogether, (he neglects to state federal tax rolls only). This year, he says there is more good news for seniors by reducing the minimum withdrawal for RRIFs (Registered Retirement Income Funds) and introducing a new Home Accessibility Tax Credit (this neglects to recognize that not all seniors own homes).

The above so called tax relief benefit for seniors allows federal tax relief for senior singles equal to $1,697 per month and for senior couples $3,393 per month. The tax relief for senior singles hardly covers a rent or mortgage payment of $1,200 and $250 for food per month (Maslow’s Hierarchy of Need), but amply covers this amount for a senior couple. For a couple $1200 for rent or mortgage and $500 for food leaves $1693 (or 50% of $40,000) for other necessities and maybe even a nice little vacation all tax free.

The BMO Retirement Institute Report-Retirement for One-By Chance or Design 2009 bmo.com/pdf and cifps.ca/Public/Media/PDF states the following:

‘the present tax system is set up to give a huge advantage to married/coupled people with singles who were never married or were divorced at some point throughout their entire working career usually subsidizing married/coupled people’. (It is interesting to note that this statement in the original article appears to have been removed and is no longer present in URL shown above).

From Russell Investments ‘Spending Patterns in Retirement’, February 2010 russell.com it is stated that:

‘government transfers, such as CPP and OAS are generally not sufficient to cover the Essentials of Retirement-less than 70% coverage for the average retiree, and as a little as 30% for higher-income retirees. This problem is magnified for single retirees. For example, in the $35,000-$60,000 income category, couples spend only about 12% more than singles on essentials (i.e. food, housing, and clothing), yet receive about 80% more in government transfers’.

The senior population includes about 13% of ‘ever’ single seniors (never married, divorced or widowed) and divorced single seniors (the younger persons are when divorced, the more likely they are to be poor as seniors) and about 43% widowers, (who receive marital manna benefits like pension splitting while married and survivor pension benefits). It is a well-documented fact that singles require 60 to 70% income of married/coupled people depending on whether they rent or own a home with 70% likely being the more accurate figure (Moneysense, BMO Retirement Institute Report-Retirement for One-By Chance or Design, etc.).

So how does the Conservative tax relief program for seniors help ever-single seniors? It doesn’t. Instead, with the addition of marital manna benefits such as pension splitting and survivor benefits, individuals/singles are financially made to be not even 50% worthy of total married/coupled tax relief, but rather less than 50% of married/coupled tax relief. And immigrant families are also financially made to be more income worthy than Canadian-born and immigrant senior individuals/singles.

Governments, businesses and society all talk about ‘family, family, family’, but singles continue to be ‘kicked out’ or deemed ‘less worthy’ than married/coupled people in the ‘family’. The Conservative Prime Minister, Finance Minister, and Members of Parliament remain financially illiterate in individual/singles financial affairs.

The continued financial discrimination of singles must be eliminated by recognizing what it truly costs for ever-singles and divorced/separated senior singles to live in this country. If programs such as pension splitting for married/coupled seniors and survivor benefits for widows continue to be added, then at the same time, ever-single and divorced single seniors must be given equal financial status through enhanced programs such as GIS and 60-70% enhancement of singles’ income baselines over married/coupled person’s and widow baselines. Sixty per cent of couples’ tax relief $40,720 income equals $24,432 ($2,036 per month) and 70% of $40,720 equals $28,504 ($2,375 per month).

The Conservative Member of Parliament’s article is titled ‘Seniors play an increasingly important role in our society’. Unfortunately, married/coupled and widowed seniors are deemed to play a more financially important role than ever-singles or divorced/separated early in life singles even though singles have supported married/coupled and widowed persons throughout their lifetime through contributions by paying more taxes and getting less in benefits.

The senior population of Canada includes only about 13% of singles and divorced/separated persons, while widows comprise 43% of the senior population. If the marital manna benefits were taken away from the widowed persons (who by the way could now be considered to be living a ‘single’ lifestyle since they are now technically ‘single’) they would be on a more equal instead of a greater financial footing to ever singles and divorced/separated persons. Or, if looked at from another perspective since ever singles and divorced/separated persons comprise only 13% of the senior population, would it really cost that much more to give them the same financial benefits as widows? As citizens of this country senior ever singles and divorced/separated persons deserve and should be treated with same financial respect as widowed seniors.

To continue the common sense and critical thinking of this article, a simple rephrasing of the information is as follows:  Governments need to top up tax free amount for ‘ever’ singles and early divorced/separated senior persons to from $20,0000 to $28,000 (70% of $40,000) plus give to ‘ever’ singles and early divorced/separated persons 70% of whatever benefits are given to widowed persons.  To do nothing or less than this only continues the financial discrimination already been committed against ‘ever’ singles and divorced/separated persons.

LOST DOLLARS LIST’

Since it costs ‘ever’ single and divorced/separated seniors with rent or mortgage about 70% – 75% of married/couple seniors’ income, lost dollars of 70% for $20,000 extra that married/coupled seniors get tax free or $6,000 per year (age 65 to 90) will be added to the list.  Total value of dollars lost will be $150,000 ($6,000 times 25 for years age 65 to 90).

 

The blog posted here is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

    

FALSE ASSUMPTIONS- ‘FOUR WAYS SINGLE SENIORS LOSE OUT’

FALSE ASSUMPTIONS OF ARTICLE ‘FOUR WAYS SINGLE SENIORS LOSE OUT’

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to be used as personal or financial advice.

(On searching internet a few days ago this article was found – ‘Four ways single seniors lose out’ by Ted Rechtshaffen, Financial Post October 13, 2012. While the intentions of the article are great, the assumptions and categorization of singles is false.)

In his October 13, 2012 article Ted Rechtshaffen (four-ways-single-seniors-lose-out) talks about four ways that single seniors financially lose out. Portions of the article are outlined in part here (full article is available online):

Rechtshaffen states:

“Being part of a couple in old age has so many tax advantages that losing a spouse through divorce or death can be very costly. Given the fact that so many more single seniors are female, this unfairness is almost an added tax on women. Becoming single in old age could cost you tens of thousands of dollars through no fault of your own. The current tax and pension system in Canada is significantly tilted to benefit couples over singles once you are age 65 or more….

Here are four ways that single seniors lose out:

1. There is no one to split income with. Since the rules changed to allow for income splitting of almost all income for those aged 65 or older, it has meaningfully lowered tax rates for some…If you are single, you are stuck with the higher tax bill.

2. CPP (Canadian Pension Plan) haircut… If one passes away, the government doesn’t pay out more than the maximum for CPP to the surviving spouse. They will top up someone’s CPP if it is below the maximum, but in this case, they simply lose out almost $12,000 a year.

3. RSP/RIF (Retirement Savings Plan/Retirement Income Fund) gets folded into one account. This becomes important as you get older and a larger amount of money is withdrawn by a single person each year — and taxed on income…her tax bill will be much larger… than the combined tax bill the year before, even though they have essentially the same assets, and roughly the same income is withdrawn.

4. Old Age Security (OAS). The married couple with $50,000 of income each, both qualify for full Old Age Security —… If the husband passes away, you lose his OAS, about $6,500. On top of that, in the example in #3, the wife now has a minimum RIF income…and combined with CPP and any other income, she is now getting OAS clawed back.

The clawback starts at $69,562, and the OAS declines by 15¢ for every $1 of income beyond $69,562. If we assume that the widow now has an income of $80,000, her OAS will be cut to $414.50 a month or another $1,500 annual hit simply because she is now single. In total, almost $8,000 of Old Age Security has now disappeared. As you can see, a couple’s net after-tax income can drop as much as $25,000 after one becomes single.

On the other side, there is no question that expenses will decline being one person instead of two, but the expenses don’t drop in half. We usually see a decline of about 15% to 30%, because items like housing and utilities usually don’t change much, and many other expenses only see small declines.

In one analysis our company did comparing the ultimate estate size of a couple who both pass away at age 90, as compared to one where one of them passes away at age 70 and the other lives to 90, the estate size was over $500,000 larger when both lived to age 90 – even with higher expenses.

So the question becomes, what can you do about this?

I have three suggestions:

1. Write a letter to your MP along with this article, and demand that the tax system be made more fair for single seniors. You may also want to send a letter to Status of Women Minister…as this issue clearly affects women more than men.

2. Look at having permanent life insurance on both members of a couple to compensate for the gaps. Many people have life insurance that they drop after a certain age. The life insurance option certainly isn’t a necessity, but can be a solution that provides a better return on investment than many alternatives and covers off this gap well. If you have sufficient wealth that you will be leaving a meaningful estate anyway, this usually will grow the overall estate value as compared to not having the insurance — and not hurt your standard of living in any way.

3. Consider a common law relationship for tax purposes. I am only half joking. If two single seniors get together and write a pre-nuptial agreement to protect assets in the case of a separation or death, you can both benefit from the tax savings.

Ultimately, the status quo is simply unfair to single seniors, and that needs to change.”

Ted Rechtshaffen is president and wealth advisor at TriDelta Financial, a boutique wealth management and planning firm. www.tridelta.ca

The first thing that is so wrong with this article is the definition of single versus married/partnered in marital status. The senior persons mentioned in this article are not single. According to Statistics Canada definitions, they are widowed or divorced/separated (after age 65). Persons who are true and ever singles have none of the financial benefits/losses mentioned in this article. And if persons are divorced/separated, especially at an early stage of their marriage, they also do not have many of the benefits/losses mentioned here. (The earlier the divorce/separation in life, the greater is the loss of benefits that married/coupled persons enjoy).

  1. Being part of a couple in old age has so many tax advantages…How true!
  2. The current tax and pension system in Canada is significantly tilted to benefit couples over singles once you are age 65 or more….This statement is not completely true. The system is even more unfair for singles who are true (‘ever’) singles, not widows. Singles who are true singles have been excluded from the discussion.
  3. Benefits – Article correctly states that pension splitting, CPP, RSP/RIF and OAS are benefits to married people because the couple receives these benefits times two and is able to pension split, but widowed persons have less of these benefits. To this, true singles and early divorced/separated persons ask the question, “so what”? If widowed persons are now so called ‘single’ they should have to live same standard of living, not better than, true singles and early divorced/separated persons.
  4. Losses – Losses are correctly stated, however, true (‘ever’) singles and early divorced/separated persons have a hard time understanding why this is a hardship. Widowers are now ‘single’ so why can’t they live the same lifestyle as true singles and early divorced/separated persons?
  5. Higher tax bill – Why is this a problem? Widowed persons are now on more equal playing field to true single and early divorced/separated persons.
  6. Clawback – Again why is this a problem? True singles and early divorced/separated persons enjoy none of these benefits. Also, many true (ever) singles and early divorced/separated Canadian persons do not have the luxury of a $70,000 income.

Estate size $500,000 less
Just more proof that married/coupled persons want it all and want more, more and more from the time of marriage until the death of their spouse/partner and even after the death of their spouse/partner.  In article ‘The Added Price of Single Life?’ by Bella Depaulo (belladepaulo) talks about a A British study that showed  true singles lose equivalent of $380,000 USA over a lifetime to married persons, so what is the problem with losing $500,000? Another good article is ‘The high price of being single in America’ theatlantic.com.

The article then goes on to make these enlightening points:

“There is no question that expenses will decline being one person instead of two, but the expenses don’t drop in half. We usually see a decline of about 15% to 30%, because items like housing and utilities usually don’t change much, and many other expenses only see small declines“.

It would be exceedingly wonderful if government, businesses, society and families (married/partnered) would recognize this fact for true singles and early divorced/separated persons instead of telling them “it must be their lifestyle” that is making them poor. Fifteen to 30 percent decline? Wow, singles would love these percentages to also be used for them especially since 60 to 70% income of married or partnered persons is often used (i.e. MoneySense articles). If only true singles and early divorced persons could say they should have the same benefits as widowed persons, that is, 70 to 85% income of married or partnered persons.

Unfair to single seniors?  The  most unfairness is to true singles and divorced/separated persons, not widows.

Regarding the suggestions that are made:

  1. “Write your MP and demand that tax system be made more fair for single seniors”. The article refers only to married/coupled and divorced/separated seniors after the age of 65. It dis criminates by exclusion against true singles and early divorced/separated persons.
  • “Look at having permanent life insurance on both members of a couple to compensate for the gaps”. This is a great idea. The author of this blog has long thought this would be a solution to providing benefits to survivors once spouses have died and they would actually be paying for those benefits through premiums. At the present time, survivors are getting marital manna benefits, but then are asking for more as this article suggests. They are also getting survivors benefits from pension plans and paying very little for these benefits. An example is a pension plan where only $100 is deducted each month from living spouse for pension benefits in the thousand dollar range. Deduction of $100 per month or $1200 per year does not pay for survivor pension that is two-thirds of full pension of the spouse. Life insurance plans at present time do not extend to 90 years of age without excessive premiums. To stop all the marital manna benefits that survivors get, life insurance plans need to be extended to 90 years of age, and spouses need to pay premiums for entire life. Another critical thinking, outside the box idea is to eliminate marital manna benefits and make permanent term life insurance plans compulsory, just like house and car insurance, so that married/coupled persons would actually pay for the benefits they receive. This methodology would allow true singles and early divorced/separated persons to be on more level financial playing field to married/coupled persons since generally true singles do not need life insurance. A longer term for collecting premiums should help to offset the costs of the premiums that will be paid out. Permanent life insurance would ease burden that married/partnered benefits place on government programs. There also would then be more monies to bring government programs for true singles and early divorced/separated persons to have same standard of living as married/coupled and widowed persons.
  • Consider a common law relationship for tax purposes. He says he is only half kidding. Really? According to Canada Revenue Agency rules this is not legal. Ever singles and divorced/separated persons cannot just shack up with someone for tax purposes. More true singles and early divorced/separated persons would be doing this if they could.

Lessons learned

  1. Writers who wish to write about the financial affairs of singles should use correct definitions for singles. The persons in this article were not true singles. In other words, correctly identify who your audience is.
  2. Writers of financial institutions who wish to write about the financial affair of singles should include all singles in their discussions. To do anything less is discriminatory and disrespectful to singles who truly are single.
  3. By all means vote and contact your Members of Parliament, but insist that true singles and early divorced/separated persons (senior and otherwise) be included in financial discussions and formulas equal to and at the same level as widows and middle class families. (Seventy to 85% income of married/coupled persons would be wonderful).

The blog posted here is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

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